Telcos spectrum can t be treated as security interest by lenders: NCLAT
Telecom companies have the right to use spectrum under the licence granted to them. However, they cannot be said to be the owners in possession.
BusinessToday.In | April 14, 2021 | Updated 22:40 IST
The tribunal made it clear that spectrum cannot be treated as a security interest by the lenders .
Debt-ridden telecom companies undergoing insolvency proceedings cannot claim rights to their spectrum, a natural resource, if payments for spectrum usage have not been made to the government, the National Company Law Appellate Tribunal has said.
In what could be a landmark judgement amid multiple telecom players undergoing proceedings under the insolvency law, a three-member bench of the tribunal also made it clear that spectrum cannot be treated as a security interest by the lenders .
NCLAT says lenders cannot treat telcos spectrum as security interest under insolvency proceedings
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Last Updated: Apr 13, 2021, 10:59 PM IST
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Synopsis
NCLAT on Tuesday ruled that debt-ridden telecom companies undergoing insolvency proceedings cannot claim rights to their spectrum, which is a natural resource unless requisite spectrum usage payments have been made to the government.
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The National Company Law Appellate Tribunal (NCLAT) on Tuesday ruled that debt-ridden telecom companies undergoing insolvency proceedings cannot claim rights to their spectrum, which is a natural resource unless requisite spectrum usage payments have been made to the government. In what could be a landmark judgement amid multiple telecom players undergoing proceedings under the insolvency law, a three-member bench of the tribunal also made it clear that spectrum cannot be treated as a security interest by the lenders .