New Delhi, Feb. 13 -- The Supreme Court on Friday dashed banks' hopes of recovering money lent to bankrupt telecom operators such as Reliance Communications (RCom) and Aircel by ruling that airwaves cannot be sold under an insolvency process. Therefore, the future of the two operators and how UV Asset Reconstruction Co Ltd (UVARCL), the asset reconstruction company that had won the bids for them, will monetize them without selling the precious spectrum is now a gnawing question.

"We hold that spectrum allocated to TSPs and shown in their books of account as an 'asset' cannot be subjected to proceedings under Insolvency and Bankruptcy Code (IBC), 2016," the judgment said. TSPs are telecom service providers, and in this case, Aircel and Rc...