Reliance Communications' resolution professional has filed a curative petition against the Supreme Court's February ruling that excluded telecom spectrum from insolvency assets. The move challenges the Department of Telecommunications' cancellation of licenses and invocation of bank guarantees, which lenders argue strips them of key collateral security.
Reliance Communications (RCom) has taken a new step to protect its remaining asset base by filing a curative petition against the Supreme Court’s February 13, 2026, judgment. That ruling previously established that telecom spectrum is not an asset that can be treated as property under the Insolvency and Bankruptcy Code (IBC). By challenging this, the company's resolution professional aims to reverse a legal position that has significantly hampered the recovery process for lenders.
The dispute intensified after the Department of Telecommunications (DoT) cancelled spectrum licenses previously held by RCom and its subsidiary, Reliance Telecom Limited. The DoT also invoked bank guarantees, which has direct financial consequences for the lenders involved. These actions have reduced the available assets for the insolvency process, effectively bypassing the priority claims usually afforded to creditors. With government claims reaching approximately ₹31,276 crore, the case is a significant indicator of how sovereign dues are treated during corporate insolvency.
The petition warns that the court’s current stance creates a broader systemic risk for the Indian economy. If government-granted rights like spectrum are exempt from the insolvency framework, it could affect other industries that depend on state concessions. Sectors such as mining, oil and gas, and hydropower often rely on similar government licenses. If these are removed from the insolvency process, the risk for lenders in these sectors increases, which could make it harder for infrastructure companies to secure funding.
Legal arguments in the petition also focus on Section 14(1) of the IBC. This rule is designed to prevent the cancellation of essential licenses during the insolvency moratorium period, provided that payments are kept up to date. RCom maintains that it met these obligations, making the government's license cancellations invalid. The company is also relying on the IBC Amendment Act of 2026 to argue that such unilateral actions by the government should be restricted.
For investors and banks, the outcome is critical. It will determine whether government-granted assets remain protected within the insolvency process or if they can be reclaimed by authorities at the expense of creditor recovery. The next step will be the court’s response to the curative petition, which will be watched closely for its impact on bank recovery values and the future of infrastructure project financing in India.