IBC Triumphs Over TRAI: RCom Case Verdict

The National Company Law Appellate Tribunal (NCLAT) has dismissed petitions from the Telecom Regulatory Authority of India (TRAI) challenging the application of the Insolvency & Bankruptcy Code (IBC) over its provisions in the RCom insolvency case. NCLAT ruled that IBC takes precedence over any conflicting laws.

The National Company Law Appellate Tribunal (NCLAT) has reaffirmed that the Insolvency & Bankruptcy Code (IBC) overrides other legislation, including the Telecom Service Regulatory Authority of India (TRAI) Act, in insolvency proceedings, setting a significant precedent in the case involving the defunct telecom company, RCom.

Rejecting two petitions by TRAI, the NCLAT emphasized that IBC should be prioritized in dealing with insolvency matters, as previously upheld by the Supreme Court. TRAI's attempt to categorize the balances of RCom's customers as non-operational debt was overruled, confirming their classification as operational debt.

The tribunal dismissed TRAI's demands for RCom's statutory dues clearance, including a sum of Rs 85.10 lakh. Pointing to the legislative intent, NCLAT stated that the IBC's Section 238 gives it overriding authority, negating TRAI's claims of jurisdiction as a special law in the telecom sector.

(With inputs from agencies.)