Supreme Court: Telecom Spectrum Not Insolvency Asset Despite ‘Intangible Asset’ Accounting

The Supreme Court of India has held that mere accounting treatment of telecom spectrum as an “intangible asset” does not bring it within the Insolvency and Bankruptcy Code, 2016 (IBC).

A Bench of Justices Pamidighantam Sri Narasimha and Atul S. Chandurkar ruled that spectrum remains a natural resource held by the Union in public trust. Recognition in financial statements reflects only control over future economic benefits, not ownership.

The Court clarified that under Section 4 of the Indian Telegraph Act, 1885, ownership of spectrum vests exclusively with the Union.

Hence, spectrum rights cannot form part of the asset pool in insolvency or liquidation proceedings.

[State Bank of India v. UOI & Ors.]