NCLAT rules that telecom spectrum can be subjected to IBC proceedings


Status as on- 28/04/21


The National Company Law Appellate Tribunal (NCLAT) delivered a landmark ruling recently, that clarified many controversial legal issues surrounding telecom spectrum, including whether it could be subjected to insolvency/liquidation proceedings and whether the bankrupt telcos could sell spectrum rights allotted to them (under a license) as part of the Insolvency and Bankruptcy Code’s resolution process.


Spectrum, as an intangible asset of the licensee/Telecom Service Providers/Telcos/corporate debtor, may be subjected to insolvency/liquidation proceedings, according to the Appellate Tribunal’s 107-page decision. The NCLAT has answered the numerous questions posed to it by the Supreme Court in its September 1 order last year in its most recent decision.

While a license may be transferred as an intangible asset of the Licensee/Corporate Debtor in Insolvency Proceedings in ordinary circumstances, the NCLAT has stated that because trading is subject to dues clearance by the seller or buyer, as the case may be, the Transferor/Seller or Transferee/Buyer being in default does not qualify for transfer of license under the insolvency proceedings.

According to the NCLAT, the Interim Resolution Professional (IRP) is obligated under Section 18 of the IBC, to track the Corporate Debtor’s properties and administer its activities, as well as take possession and custody of assets over which the Corporate Debtor has ownership rights, such as intangible assets as the right to use spectrum.


Disclaimer – The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinion before relying upon the article. For more information, please contact us at


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