Reliance Communications Ltd (RCom) is once again before the courts:  this time over the Department of Telecommunications’ invocation of nearly ₹802 crore of bank guarantees. But the latest litigation raises a much larger and increasingly uncomfortable question: how long can one of India’s biggest corporate insolvencies remain unresolved?

RCom entered the corporate insolvency resolution process in 2019. Seven years later, in 2026, the company continues to be operated as a going concern by its Resolution Professional, while litigation surrounding its assets, spectrum and creditors continues.

Seven years under the Insolvency and Bankruptcy Code:  and still no final resolution in sight.

That delay deserves scrutiny not merely from the insolvency ecosystem but also from the consortium of lenders, particularly State Bank of India, the lead lender, which has enormous financial exposure to the process.

₹802 Crore Bank Guarantee Battle Reaches Supreme Court

The immediate controversy concerns the Department of Telecommunications’ invocation of bank guarantees totalling approximately ₹801.91 crore over unpaid spectrum instalments.

On August 20, the Supreme Court Bench of Justice P.S. Narasimha and Justice Alok Aradhe declined to entertain RCom’s petition and granted it liberty to approach the appropriate High Court. Significantly, the Court also refused RCom’s request for one week’s status quo protection.

The batch included petitions involving State Bank of India, Yes Bank and Punjab National Bank, which had issued guarantees on RCom’s behalf for its deferred spectrum-payment obligations.

The guarantees invoked include:

• Yes Bank: ₹281.45 crore
• State Bank of India: ₹249.29 crore
• Punjab National Bank: ₹114.09 crore
• Canara Bank: ₹157.08 crore

These guarantees relate to spectrum acquired by RCom in auctions between 2013 and 2016.

The Bigger Question: Seven Years Of IBC:  Where Is The Resolution?

The bank-guarantee litigation cannot be viewed in isolation. RCom has remained trapped in the insolvency process for approximately seven years. The entire philosophy of the IBC was built around time-bound resolution, preservation of enterprise value and maximisation of recoveries for creditors.

RCom today presents almost the opposite picture: a prolonged insolvency, repeated litigation and continuing uncertainty over assets crucial to the resolution process. Indeed, counsel for RCom’s Resolution Professional told the Supreme Court that RCom continues to be operated as a going concern and warned that action affecting its spectrum could cripple operations. That makes the absence of a final resolution even more striking.

Review Petitions Pending:  Litigation Keeps Resolution In Limbo

Adding another layer is the continuing challenge to the Supreme Court’s February 2026 spectrum judgment.

The Supreme Court held that spectrum is a public resource and cannot be treated as an asset belonging to a telecom service provider for insolvency purposes. RCom’s case, however, is that the judgment did not determine whether guarantees securing spectrum dues could be invoked during the corporate insolvency resolution process.

RCom specifically told the Court that a review petition remains pending and argued that permitting invocation of the guarantees before the review is decided could render that challenge infructuous. Six review petitions concerning the spectrum judgment have now remained pending for more than six months.

Their fate has potentially enormous implications not merely for RCom but for the interaction between India’s insolvency framework, government spectrum rights and lenders’ recoveries.

Is SBI, The Lead Bank, Fast Asleep?

This brings the focus squarely onto the lenders. Where is State Bank of India,  the lead lender, in pushing for closure of an insolvency that has dragged on for seven years?

Banks cannot control the speed at which courts decide litigation. Nor can a lead lender unilaterally resolve complicated disputes involving spectrum and government claims.

But after seven years, creditors are entitled to ask harder questions. What concrete steps are being taken to bring the insolvency to closure? What value has been lost during the prolonged process? What is the present resolution roadmap? And what is the strategy of the Committee of Creditors and its lead lender for preventing RCom from remaining indefinitely suspended between insolvency and resolution?

The latest ₹802 crore controversy demonstrates precisely what is at stake. RCom argued that approximately ₹801 crore would otherwise form part of the insolvency estate and be distributed among creditors according to the IBC waterfall; invocation of the guarantees would instead give the Department priority over that amount.

Seven years after the insolvency process began, therefore, the battle is no longer merely about resolving RCom. It is increasingly about what will ultimately remain available to resolve.