State Bank of India (SBI), acting on behalf of lenders to the now-insolvent Aircel group, has approached the Supreme Court of India seeking a review of its February 13 judgment, which held that telecom spectrum cannot be treated as an asset under insolvency proceedings. The lender consortium has cautioned that the ruling could have wide-ranging consequences for banking stability and infrastructure financing, according to multiple media reports, including CNBC-TV18, The Economic Times, and The Hindu, dated April 22, 2026.
Also Read: Telecom Spectrum Not an Asset That Can Be Restructured Under IBC: Supreme Court
Key Legal Concerns Raised in Review Petition
In its review petition filed on March 30, SBI has contended that the verdict contains apparent errors and does not adequately address key legal questions previously placed before the court. According to the petition, the judgment failed to consider critical aspects such as the treatment of spectrum usage rights and the classification of statutory dues under the Insolvency and Bankruptcy Code (IBC).
“The Impugned Judgment suffers from patent errors on the face of the record which go to the root of the issue,” the petition reportedly said.
SBI, however, contended that the court’s narrow focus on whether telecom companies invoked insolvency to avoid licence dues resulted in incomplete adjudication. The lender has further maintained that the ruling did not determine whether banks possess a valid security interest over spectrum usage rights or whether such rights can be monetised during insolvency resolution.
“The impugned judgment has not rendered findings on several material questions, which have a direct bearing on the status of lenders and treatment of government dues,” the petition said.
Aircel Insolvency and Rs 13,000 Crore Debt Dispute
The dispute originates from the 2018 insolvency proceedings of Aircel and its group companies, which defaulted on loans exceeding Rs 13,000 crore owed to a consortium led by SBI. During the resolution process, lenders sought recognition of spectrum usage rights as monetisable assets, while the Department of Telecommunications maintained that outstanding government dues must be settled prior to any transfer of such rights.
Supreme Court’s Stand on Spectrum Ownership and IBC
In its February ruling, the Supreme Court had affirmed the government’s position that spectrum, being a sovereign and public resource, cannot be treated as a tradable asset for debt restructuring under the IBC framework.
The February 13 judgment concluded that telecom service providers (TSPs) did not own spectrum. Accordingly, a Bench of Justices held that the Insolvency and Bankruptcy Code (IBC) excludes any assets over which a corporate debtor has no ownership rights. The court stated that spectrum is a scarce natural resource owned by the people of India, with legal title vesting exclusively in the Union of India, which holds it in trust for the public.
“Mere recognition of spectrum licensing rights as an intangible asset by TSPs in the financial statements is not conclusive of their ownership, as it only represents control over future economic benefits… Licensees acquire no proprietary interest in spectrum,” Justice Narasimha, who authored the judgment, had observed.
The court had held that the mere grant of spectrum under a licence did not mean a complete transfer of a finite natural resource from the Union government to a TSP. “It confers only a limited, conditional and revocable privilege to use spectrum, subject to statutory requirements, licence conditions and overriding public interest,” Justice Narasimha had clarified.
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SBI Warns of Impact on Banking and Credit Markets
However, SBI has warned that the judgment could significantly alter credit risk assessment in regulated sectors. It argued that if left unreviewed, the decision may compel financial institutions to overhaul lending practices, particularly in sectors such as telecom, mining, power, and infrastructure, where operations depend heavily on government-conferred rights.
“The Impugned Judgment is likely to compel banks and financial institutions to undertake a fundamental overhaul of their credit appraisal and risk evaluation frameworks. Banks and financial institutions may grow increasingly reluctant to finance such commercial ventures,” SBI said in the petition, according to the reports.
SBI has reportedly urged the apex court to revisit its findings, stating that the verdict, if left unreviewed, could have “cascading implications” on insolvency cases and the investment climate.
