The story of Aircel Limited’s financial collapse is not unusual in the Indian telecom sector, which has been battered by price wars, mounting debt, and unpaid regulatory dues. What made the Aircel insolvency legally extraordinary was not the default itself, but what the company’s lenders attempted to do in the aftermath. When Aircel Limited, Aircel Cellular Limited, and Dishnet Wireless Limited filed for voluntary Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC) in March 2018, lenders led by State Bank of India had extended aggregate credit facilities of approximately ₹13,729 crore. The Department of Telecommunications (DoT) lodged claims of ₹9,894.13 crore in unpaid licence fees, spectrum usage charges, and Adjusted Gross Revenue (AGR) dues. As the insolvency machinery cranked into motion, a deceptively simple question was placed before the adjudicating authorities: could the spectrum — the very radio waves Aircel had licensed and used to run its network — be treated as an asset belonging to the corporate debtor, capable of being restructured, transferred, or monetised to repay creditors? [1]

On 13 February 2026, the Supreme Court of India answered that question emphatically in the negative. In State Bank of India v. Union of India & Ors. (Civil Appeal No. 1810 of 2021 and connected appeals), a bench of Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar held that spectrum allocated to telecom service providers cannot be subjected to proceedings under the Insolvency and Bankruptcy Code, 2016. The court declared: “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, 2016.” [2] The ruling fundamentally redraws the boundaries between the law of insolvency and the law governing natural resources, and its implications extend well beyond the fate of Aircel.

The Regulatory Architecture: How Spectrum Is Licensed in India

To understand why the Supreme Court reached the conclusion it did, one must first understand how spectrum is governed in India. The Indian Telegraph Act, 1885 — the colonial-era legislation that served as the foundational law for all forms of telecommunication in the country — vests the exclusive privilege of establishing, maintaining, and working telegraphs in the Central Government. Section 4(1) of the Act reads: “Within India, the Central Government shall have the exclusive privilege of establishing, maintaining and working telegraphs: Provided that the Central Government may grant a license, on such conditions and in consideration of such payments as it thinks fit, to any person to establish, maintain or work a telegraph within any part of India.” [3] The expression “exclusive privilege” is not merely rhetorical — it is constitutive of the entire licensing regime. The government does not sell spectrum. It does not transfer ownership. It grants a revocable permission to use a finite, scarce public resource under conditions it prescribes.

When the Aircel group entities were granted Unified Access Service Licences (UASL) in December 2006 for a twenty-year term, and when they subsequently acquired spectrum usage rights in multiple frequency bands through auctions held between 2010 and 2016, what they received was a conditional, revocable right to use spectrum — not proprietary title to it. Spectrum usage charges (SUC) and licence fees remained payable to the DoT as ongoing obligations. The Telecom Regulatory Authority of India (TRAI), established under the Telecom Regulatory Authority of India Act, 1997, regulates tariffs, quality of service standards, and advises the government on the terms under which licences are issued and renewed. The DoT, functioning under the Ministry of Communications, administers the licensing process and enforces payment of dues. Crucially, the Telegraph Act also empowers the Central Government to revoke any licence granted under Section 4 “on the breach of any of the conditions therein contained, or in default of payment of any consideration payable thereunder” — a revocation power that the court would later rely upon in reinforcing the conditional character of spectrum rights. [3]

This entire regulatory framework is grounded in a deeper constitutional principle. Article 39(b) of the Constitution of India, which forms part of the Directive Principles of State Policy, mandates that the State shall direct its policy towards ensuring that “the ownership and control of the material resources of the community are so distributed as best to subserve the common good.” Spectrum, being finite and exhaustible, has been consistently recognised by Indian courts as a material resource of the community within the meaning of this provision. [4]

The 2G Precedent: Spectrum as Public Trust

The constitutional characterisation of spectrum as a public resource was not a discovery made in the Aircel spectrum case. It was cemented in the landmark 2012 ruling of the Supreme Court in Centre for Public Interest Litigation v. Union of India, (2012) 3 SCC 1 — popularly known as the 2G Spectrum Case. [4] In that case, a bench of Justice G.S. Singhvi and Justice Asok Kumar Ganguly quashed 122 telecom licences that had been granted by the DoT in 2008 using a first-come, first-served policy, finding the process arbitrary and violative of Article 14 of the Constitution. More significantly for our purposes, the court articulated that the State, when dealing with natural resources like spectrum, acts as a trustee for the public. Natural resources cannot be disposed of or alienated at the discretion of the government without adherence to constitutional principles of fairness, transparency, and public interest.

The public trust doctrine embedded in the 2G ruling means that spectrum is not the government’s to sell as it pleases, nor is it a private asset that a licensee can deal with as its own. The licensee is a conditional occupant — permitted to use the resource so long as it complies with licence conditions and pays its dues. The 2026 Aircel judgment drew directly upon this precedent, observing that spectrum is “a material resource of the community” and that the State holds it as a cestui que trust — a beneficiary-trustee — for the people of India. “Natural resources belong to the people but the State legally owns them on behalf of its people and from that point of view natural resources are considered as national assets… The State is bound to act in consonance with the principles of equality and public trust,” the court noted, echoing the 2G ruling. [1]

The IBC Framework and the Asset Pool Problem

The Insolvency and Bankruptcy Code, 2016 was enacted to consolidate and amend laws relating to reorganisation and insolvency resolution of companies, partnership firms, and individuals. When a company enters the CIRP — as Aircel did under Section 10 (which allows voluntary filing by the corporate debtor itself) — the National Company Law Tribunal (NCLT) passes a moratorium order under Section 14. This moratorium prohibits, among other things, the institution or continuation of suits against the corporate debtor, transfer or disposal of its assets, and enforcement of security interests. The moratorium is intended to create a “calm period” — a breathing space during which the business can continue as a going concern while a resolution plan is formulated. [5]

The resolution professional, appointed upon admission of the CIRP application, is responsible under Section 18 of the IBC for taking custody and control of all assets of the corporate debtor, including business records, intellectual property rights, financial assets, and tangible and intangible assets. It was under this provision that the SBI-led lenders argued that spectrum usage rights — reflected as intangible assets in Aircel’s balance sheets — must form part of the insolvency estate and be made available for distribution among creditors or transferred to a resolution applicant.

The NCLT, Mumbai admitted the insolvency applications in March 2018. A resolution plan submitted by UV Asset Reconstruction Company was approved by the Committee of Creditors (CoC) and sanctioned by the NCLT in June 2020. The DoT challenged this before the National Company Law Appellate Tribunal (NCLAT). The NCLAT, in its impugned order, took a nuanced but internally inconsistent position: it held that spectrum is indeed a natural resource owned by the nation, and that the right to use spectrum is an intangible asset of the licensee capable of being subjected to insolvency proceedings — yet it simultaneously ruled that spectrum could not be used without clearance of government dues. This created a logical tension: how can an asset be dealt with in insolvency if it cannot be transferred or utilised without satisfying obligations that insolvency is supposed to temporarily relieve? [2]

It was against this backdrop that cross-appeals were filed before the Supreme Court — by the financial creditors and resolution professionals seeking to preserve the NCLAT’s treatment of spectrum as an insolvency asset, and by the DoT seeking to remove spectrum from the insolvency estate entirely.

The Supreme Court’s Analysis: Conditional Licensing Cannot Yield Proprietary Rights

The court’s reasoning in the Aircel judgment is structured around three interlocking arguments, each reinforcing the others.

The first and most foundational argument concerns the legal character of a telecom licence. The court examined Section 4 of the Indian Telegraph Act, 1885 — now the Telecommunications Act, 2023 has replaced it, though the proceedings in question were governed by the 1885 Act — and held that what the government confers on a licensee is “a limited, conditional and revocable privilege” to use spectrum. [2] This language deliberately echoes the vocabulary of administrative law, not property law. A privilege is not a proprietary right. A licence is not a conveyance. The court was emphatic: “Recognition of spectrum licensing rights as an intangible asset in the balance sheet is not determinative of recognition or transfer of ownership of the spectrum to TSPs.” Accounting treatment does not change legal character. A telecom company may record spectrum usage rights as an intangible asset in its financial statements for purposes of amortisation and depreciation, but that accountancy practice cannot transform a conditional government licence into private property. [1]

The second argument concerns the specific exclusions built into the IBC itself. Section 36(4) of the Code expressly excludes from the liquidation estate assets owned by a third party in possession of the corporate debtor, as well as contractual arrangements that confer only a right of use rather than transfer of title. The court read the explanation to Section 18 and Section 36(4)(a)(iv) together, concluding that since the TSPs do not have ownership title over spectrum, it cannot form part of the asset pool in either the CIRP or liquidation. As the court observed: “Under the IBC framework, spectrum licensing rights is not a part of the pool of assets for insolvency or liquidation.” [2] The insolvency estate, in other words, is bounded by ownership — and Aircel simply did not own the spectrum.

The third argument is structural: IBC cannot be used to override the specific statutory regime that governs telecommunications. The court held that insolvency law must be reconciled with, not permitted to override, sector-specific statutes governing natural resources. “IBC cannot be the guiding principle for restructuring the ownership and control of spectrum,” the court declared. [1] To allow otherwise would be to permit a private insolvency process to rewrite sovereign obligations, extinguish public dues, and transfer a national resource to private creditors without government approval — outcomes that are directly contrary to the public trust doctrine and the constitutional mandate under Article 39(b).

The Moratorium Question and Government Dues

One of the most practically significant aspects of the ruling is its treatment of the Section 14 moratorium. Under the IBC, once a moratorium is declared, no suits can be instituted against the corporate debtor and no recovery proceedings can be initiated. The telecom companies and their lenders had argued that the moratorium should protect against DoT’s recovery of licence fees, spectrum usage charges, and AGR dues during the CIRP period. The Supreme Court categorically rejected this position. Telecom companies in insolvency cannot invoke the Section 14 moratorium to stall payment of licence fees, spectrum usage charges, or AGR dues. Resolution plans must comply with the applicable telecom statutes and obtain government approval before any transfer of spectrum usage rights can be contemplated. [1]

This is a significant clarification because it places government dues in a privileged position that the moratorium cannot touch — at least insofar as they relate to the use of a sovereign resource. The DoT is not merely an operational creditor in the ordinary commercial sense; it is the licensor of a public resource, and its dues arise from the terms on which the State permitted a private party to exploit a community asset. Allowing the moratorium to freeze those dues would, in the court’s view, amount to allowing the IBC to recast the entire architecture of sovereign resource governance.

Implications: Credit Assessment, Recovery, and the Sector’s Future

The practical consequences of the judgment are already visible. The ruling clears the path for DoT to initiate licence cancellation and spectrum recovery proceedings against Aircel, Reliance Communications, and Videocon — all of which are currently in or approaching insolvency. As sources close to the DoT indicated in the days following the judgment, the department would examine the order, take legal advice, and begin proceedings to take back the spectrum once grounds for termination are determined. [1]

For financial creditors — banks and other lenders who had extended large credit facilities to telecom companies on the assumption that spectrum usage rights would function as quasi-security — the judgment is a sharp setback. Spectrum cannot be pledged, transferred, or monetised through insolvency to repay private debts if licence conditions and government dues are not met. The senior banker quoted anonymously in the aftermath of the ruling put it bluntly: “Whatever the prospect of recovering something was there, that is gone now.” [1] Going forward, credit assessment frameworks for telecom lending will need fundamental revision. Lenders will need to recalibrate the value of spectrum-backed security and account for the elevated priority of government dues in any distress scenario.

For the broader jurisprudence of insolvency law, the judgment represents an important step in defining the limits of the IBC. Insolvency proceedings are designed to resolve private commercial distress — they are not instruments for reorganising the ownership and control of natural resources held in public trust. The court’s reliance on the principles articulated in Embassy Property Developments Pvt. Ltd. v. State of Karnataka — which established that NCLT, as a creature of statute, cannot exercise jurisdiction over matters governed by public law — reinforces this boundary between the domain of insolvency and the domain of sovereign resource management. [2]

Conclusion

The Aircel spectrum case is, at its core, a case about the limits of contract and the persistence of sovereignty. When Aircel received its Unified Access Service Licences in 2006 and acquired spectrum through auctions over the following decade, it entered a relationship with the State that was contractual in form but sovereign in substance. The government never intended to, and legally could not, divest itself of ownership over the airwaves. What it granted was access — conditional, temporary, and revocable. When Aircel’s financial position collapsed, its lenders discovered that the most valuable resource on the company’s balance sheet — its spectrum rights — belonged to someone else all along. The Supreme Court, in drawing this line with clarity, has done more than settle a dispute between SBI and the DoT. It has re-established the principle that some resources are held in trust for the public, that IBC is not a tool to privatise sovereign assets through the back door of insolvency, and that the accounting treatment of a right tells us nothing about its true legal character. [1][2][3][4]

References

[1] Business Standard, “Spectrum a public resource, not IBC asset, says Supreme Court”, 13 February 2026 — https://www.business-standard.com/industry/news/spectrum-public-resource-not-ibc-asset-supreme-court-126021301828_1.html

[2] Law Trend, “Spectrum Allocation Cannot Be Subjected to Insolvency Proceedings Under IBC: Supreme Court”, 13 February 2026 — https://lawtrend.in/spectrum-allocation-cannot-be-subjected-to-insolvency-proceedings-under-ibc-supreme-court/

[3] Indian Kanoon, Indian Telegraph Act, 1885, Section 4 — https://indiankanoon.org/doc/1927191/

[4] Law Article, “Case Analysis: 2G Spectrum Scam – Centre for Public Interest Litigation & Ors. v. Union of India & Ors., (2012) 3 SCC 1” — https://lawarticle.in/case-analysis-2g-spectrum-scam-centre-for-public-interest-litigation-ors-v-union-of-india-ors/

[5] Bar and Bench, “Scope of Moratorium under Section 14 and 33(5) of the Insolvency and Bankruptcy Code, 2016” — https://www.barandbench.com/view-point/scope-of-moratorium-under-section-14-and-33-5-of-the-insolvency-and-bankruptcy-code-2016

[6] IBC Laws, Section 14 – Moratorium, Insolvency and Bankruptcy Code, 2016 — https://ibclaw.in/section-14-moratorium-chapter-ii-corporate-insolvency-resolution-processcirp-part-ii-insolvency-resolution-and-liquidation-for-corporate-persons-the-insolvency-and-bankruptcy-code-2016-ibc-sec/

[7] IBC Laws, Section 36 – Liquidation Estate, Insolvency and Bankruptcy Code, 2016 — https://ibclaw.in/section-36-liquidation-estate/

[8] Bar and Bench, “Telecom spectrum not restructurable asset under IBC: Supreme Court in Aircel AGR insolvency dispute”, 13 February 2026 — https://www.barandbench.com/amp/story/news/litigation/telecom-spectrum-not-restructurable-asset-under-ibc-supreme-court-in-aircel-agr-insolvency-dispute

[9] The Indian Lawyer, “Supreme Court Holds Insolvency and Bankruptcy Code Cannot Be Guiding Principle for Restructuring Ownership and Control of Telecom Spectrum”, February 2026 — https://theindianlawyer.in/supreme-court-holds-insolvency-and-bankruptcy-code-cannot-be-guiding-principle-for-restructuring-ownership-and-control-of-telecom-spectrum/

The post Aircel Spectrum Case: Supreme Court Rules Spectrum Cannot Enter the IBC Estate Due to Conditional Licensing appeared first on Bhatt & Joshi Associates.

Introduction

Radio chip technology, encompassing Radio Frequency Identification chips and semiconductor components used in wireless communications, has emerged as a critical area of intersection between intellectual property rights and competition law in India. The regulation of radio chip technology involves complex considerations of market dominance, patent licensing, and anti-competitive practices. This article examines the regulatory framework governing radio chip technology under the Competition Act 2002, the interplay with the Patents Act 1970, and the evolving jurisprudence that shapes how competition authorities address technology-related markets in India.

The semiconductor industry, which includes radio chip manufacturing and licensing, represents a sector where innovation, standardization, and competition concerns converge. Radio chips, particularly those incorporating standard essential patents for telecommunications and wireless technologies, have been at the center of significant legal disputes regarding fair licensing practices, royalty determination, and market dominance. Understanding how competition law applies to this sector requires examining the statutory framework, regulatory mechanisms, and judicial pronouncements that have shaped the current landscape.

The Competition Act 2002: Framework and Objectives

The Competition Act 2002 was enacted by Parliament to replace the Monopolies and Restrictive Trade Practices Act 1969, marking a fundamental shift in India’s approach to competition regulation [1]. The Act received Presidential assent in January 2003 and was subsequently amended by the Competition Amendment Act 2007 and the Competition Amendment Act 2009. The primary objective of the Act, as stated in its preamble, is to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets in India.

The Act established the Competition Commission of India as the principal regulatory body responsible for enforcing competition law. The Commission is a body corporate with perpetual succession and common seal, having the power to acquire, hold and dispose of property, both movable and immovable, and to contract and sue or be sued in its own name. The Commission consists of a Chairperson and not less than two and not more than six other Members appointed by the Central Government. Under the Act, the Commission has the duty to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in markets in India.

The Competition Act addresses three primary areas of concern. First, it prohibits anti-competitive agreements under Section 3, which includes agreements that cause or are likely to cause an appreciable adverse effect on competition in India. Second, it prohibits abuse of dominant position under Section 4, where enterprises holding positions of strength in relevant markets engage in conduct that adversely affects competition. Third, it regulates combinations under Sections 5 and 6, requiring notification of mergers, acquisitions and amalgamations that exceed specified thresholds and may cause adverse effects on competition.

The Act defines dominant position as a position of strength enjoyed by an enterprise in the relevant market in India which enables it to operate independently of competitive forces prevailing in the relevant market or affect its competitors or consumers in its favor. Neither the Act nor its implementing regulations provide specific market share levels above which market dominance can be presumed. Instead, Section 19 of the Act lays down factors such as market share of the enterprise, size and resources of the enterprise, size and importance of competitors, economic power of the enterprise, vertical integration, dependence of consumers, monopoly or dominant position, entry barriers, countervailing buying power, market structure and size of market, social obligations and social costs, and relative advantage by way of contribution to economic development, which the Commission shall consider while determining whether an enterprise enjoys a dominant position.

Prohibition of Anti-Competitive Agreements and Abuse of Dominant Position

Section 3 of the Competition Act 2002 prohibits enterprises from entering into agreements in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services which cause or are likely to cause an appreciable adverse effect on competition in India. Such agreements are consequently void. The provision distinguishes between horizontal agreements, which are agreements between enterprises engaged in similar trade of goods or provision of services, and vertical agreements, which are agreements between enterprises at different stages or levels of the production chain in different markets.

The Act presumes that certain horizontal agreements have an appreciable adverse effect on competition. These include agreements determining purchase or sale prices, limiting or controlling production, supply, markets, technical development, investment or provision of services, sharing the market by way of allocation of geographical area of market or type of goods or services or number of customers, and directly or indirectly resulting in bid rigging or collusive bidding. Such agreements are commonly referred to as cartels and are subject to stringent enforcement action by the Competition Commission.

Section 4 of the Competition Act prohibits abuse of dominant position. An enterprise or group shall not abuse its dominant position. The provision specifically identifies conduct that may constitute abuse, including directly or indirectly imposing unfair or discriminatory conditions in purchase or sale of goods or services, directly or indirectly imposing unfair or discriminatory prices in purchase or sale of goods or services, limiting or restricting production of goods or provision of services or market therefor or technical or scientific development relating to goods or services to the prejudice of consumers, indulging in practice or practices resulting in denial of market access, making conclusion of contracts subject to acceptance by other parties of supplementary obligations which have no connection with the subject of such contracts, and using dominant position in one relevant market to enter into or protect other relevant market.

The determination of abuse requires first establishing the existence of a dominant position in the relevant market, and second, demonstrating that the enterprise has engaged in conduct that constitutes abuse of that position. The Commission has discretion in applying these provisions, considering the overall competitive dynamics and effects on consumers and markets. The Act explicitly provides under Section 3(5) that nothing contained in Section 3 shall restrict the right of any person to restrain any infringement of, or to impose reasonable conditions as may be necessary for protecting any of his rights which have been or may be conferred upon him under the Copyright Act 1957, the Patents Act 1970, the Trade Marks Act 1999, the Geographical Indications of Goods (Registration and Protection) Act 1999, the Designs Act 2000, the Semi-conductor Integrated Circuits Layout-Design Act 2000. This provision recognizes the intersection between intellectual property rights and competition law.

Radio Chip Technology and Standard Essential Patents

Radio chip technology often incorporates standard essential patents, which are patents that are essential to implement technical standards adopted by industry bodies. In the telecommunications and wireless communications sectors, standards such as GSM, CDMA, LTE and other cellular standards require implementation of numerous patented technologies. Manufacturers of mobile devices, including radio chips that enable wireless connectivity, must obtain licenses to these standard essential patents to produce standards-compliant products.

The licensing of standard essential patents has been a contentious area in radio chip technology competition law in India, as well as globally. Patent holders who contribute their technologies to technical standards typically commit to licensing their patents on fair, reasonable and non-discriminatory terms, commonly known as FRAND commitments. These commitments are made to standard-setting organizations to ensure that the adoption of a particular technology as a standard does not confer excessive market power on patent holders or result in hold-up of implementers who have invested in the standard.

In India, the Competition Commission initially took cognizance of several cases involving allegations that holders of standard essential patents were abusing their dominant positions by imposing unfair licensing terms, charging excessive royalties, or imposing discriminatory conditions on different licensees. The cases primarily concerned patents essential to telecommunications standards, including those implemented in radio chips and baseband processors used in mobile devices.

The Competition Commission in cases involving Telefonaktiebolaget LM Ericsson raised concerns about royalty rates calculated as a percentage of the net selling price of devices rather than based on the value of the component implementing the patented technology. The Commission’s preliminary assessment suggested that such percentage-based pricing could constitute abuse of dominant position, particularly where the patented technology represented only a small component of the overall device value. The Commission also expressed concerns about potential patent hold-up and royalty stacking, where multiple patent holders each demanding royalties could collectively impose excessive costs on implementers.

The Patents Act 1970 and Competition Concerns

The Patents Act 1970 contains provisions specifically addressing competition concerns related to patent rights. Chapter XVI of the Patents Act deals with working of patents, compulsory licenses and revocation. Section 83 sets out general principles applicable to the working of patented inventions and specifies that patents are not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article. The provision further states that patents are granted to make the invention available at reasonably affordable prices to the public, that patents are not granted to enable the patentee to enjoy a monopoly or to adopt practices which unreasonably restrain trade or adversely affect the international transfer of technology, and that patents are granted in a manner so as to prevent abuse of patent rights by the patentee.

Section 84 of the Patents Act provides for compulsory licensing where the reasonable requirements of the public with respect to the patented invention have not been satisfied, or the patented invention is not available to the public at a reasonably affordable price, or the patented invention is not worked in the territory of India. Section 84(6)(iv) as amended specifies that in considering applications for compulsory licenses, the Controller shall take into account whether the applicant has made efforts to obtain a license from the patentee on reasonable terms and conditions and such efforts have not been successful. The proviso states that this requirement shall not be applicable in case of national emergency or other circumstances of extreme urgency or in case of public non-commercial use or on establishment of a ground of anti-competitive practices adopted by the patentee.

Section 84(7) provides that for the purposes of Chapter XVI, the reasonable requirements of the public shall be deemed not to have been satisfied if by reason of the refusal of the patentee to grant a license or licenses on reasonable terms the existing trade or industry or the development thereof or the establishment of any new trade or industry in India or the trade or industry of any other person or persons trading or manufacturing in India is prejudiced, and it is in the public interest that a license or licenses should be granted. This provision specifically addresses anti-competitive conduct by stating that reasonable requirements shall be deemed unsatisfied if by reason of conditions imposed by the patentee upon the grant of licenses or upon the purchase, hire or use of the patented article or process, the trade or industry of any person or persons trading or manufacturing in India in the article or process is prejudiced.

Section 90 of the Patents Act empowers the Controller to make orders for licensing of related patents in public interest. Section 140 provides for revocation of patents by the Appellate Board on various grounds, including that the invention has not been worked in the territory of India on a commercial scale or that the patentee has failed to satisfy the reasonable requirements of the public. The Act thus provides a framework within which competition-related concerns arising from patent rights can be addressed by the Controller of Patents or the Appellate Board.

Jurisdictional Conflict: Delhi High Court Judgment

The question of whether the Competition Commission has jurisdiction to investigate alleged anti-competitive conduct by patentees exercising their rights under the Patents Act came before the Delhi High Court in a series of consolidated cases. The Division Bench of the Delhi High Court in Telefonaktiebolaget LM Ericsson PUBL v Competition Commission of India and in related matters involving Monsanto Holdings delivered a significant judgment addressing this jurisdictional issue [2].

The Delhi High Court held that when a patent is issued in India and the patentee asserts rights under the Patents Act, the Competition Commission does not have jurisdiction to inquire into the actions of such patentee in exercise of its powers under the Competition Act. The Court observed that both the Competition Act and the Patents Act are specific legislations with regard to their respective fields. However, based on analysis of the provisions and remedies provided, the Court determined that the Patents Act provides powers to the Controller of Patents to deal with anti-competitive concerns and due to its character as lex specialis, its own criteria should prevail over considerations under the Competition Act.

The Court applied the principles of statutory interpretation, particularly the maxims generalia specialibus non derogant, meaning the general does not derogate from the specific, and lex posterior derogat priori, meaning later laws abrogate earlier laws. The Court noted that Chapter XVI of the Patents Act was introduced by amendment after the enactment of the Competition Act, and this Chapter comprehensively addresses issues related to unreasonable conditions in patent licensing agreements, abuse of patentee status, inquiries and relief provisions. The legislative intent was therefore apparent that matters relating to patents, unreasonable conditions in licensing agreements, abuse of status as patentee, inquiry in respect thereof and relief to be granted therefore are all to be governed by the Patents Act.

The Court distinguished the Competition Act as general legislation pertaining to anti-competitive agreements and abuse of dominant position generally, whereas the Patents Act specifically addresses these matters within the context of patents. The inclusion of Section 84(6)(iv) in the Patents Act by way of amendment after the Competition Act was passed, specifically referencing anti-competitive practices adopted by patentees, was particularly instructive of the legislative intent. The Court emphasized that in reconciling the two statutes, the subject matter in focus is not merely anti-competitive agreements and abuse of dominant position generally, but specifically the exercise of rights granted under the Patents Act.

Supreme Court Position and Current Status

The Competition Commission filed special leave petitions before the Supreme Court of India challenging the Delhi High Court’s decision [3]. The Supreme Court in September 2025 delivered its judgment confirming that the Competition Commission does not have jurisdiction to review conduct covered by the Patents Act. The Supreme Court ruled in favor of Monsanto Holdings and Telefonaktiebolaget LM Ericsson, holding that the Patents Act being a special statute prevails over the Competition Act which is a general statute in matters concerning the exercise of patent rights.

The Supreme Court emphasized that the original informants in the matters before the Competition Commission had already reached settlements and therefore there was no justification to interfere with the Delhi High Court’s order. The Supreme Court however clarified that any questions of law regarding the interplay between the Patents Act and the Competition Act remain open and may be addressed in future cases where actual disputes exist. The Court did not foreclose the possibility of revisiting these questions in appropriate circumstances.

This judgment reinforces the primacy of the Patents Act over the Competition Act in matters concerning the exercise of patent rights, particularly where remedies for anti-competitive conduct are already provided under the Patents Act. The Supreme Court’s decision upholds the principle that special legislation prevails over general legislation in case of conflict, and that sector-specific regulators have exclusive jurisdiction over issues arising from the exercise of rights conferred by such special statutes. The decision has significant implications for how competition law concerns related to patents, including the licensing of patents embodied in radio chips and other semiconductor technologies, will be addressed going forward.

Regulatory Framework for Radio Frequency Technologies

Radio chip technology utilizing radio frequency transmission is also subject to regulatory oversight concerning spectrum allocation and technical standards. In the United States, the Federal Communications Commission regulates radio frequency devices under FCC Part 15 [4]. Devices operating at frequencies of at least 9 kHz that generate radio frequency energy are subject to technical standards to minimize interference. Radio frequency identification systems and radio chips used in wireless communications must comply with applicable frequency allocation and technical specifications.

While India has not enacted specific legislation mirroring the CHIPS and Science Act adopted in the United States to promote domestic semiconductor manufacturing, there has been increasing recognition of the strategic importance of the semiconductor industry. The government has introduced initiatives to strengthen domestic semiconductor manufacturing capabilities and reduce dependence on imports. These policy initiatives complement the competition law framework by addressing supply chain resilience and technological self-sufficiency objectives.

Implications for Radio Chip Markets

The judicial clarification that the Patents Act takes precedence over the Competition Act in matters relating to patent rights has important implications for Radio Chip technology markets under Competition Law. Manufacturers of radio chips incorporating standard essential patents and other patented technologies can exercise their patent rights, including determining licensing terms, without direct intervention by the Competition Commission. However, such rights remain subject to the provisions of the Patents Act, particularly Chapter XVI, which addresses the working of patents, reasonable requirements of the public, and anti-competitive practices by patentees.

Licensees who believe that patent holders are imposing unreasonable licensing terms or engaging in anti-competitive practices can seek remedies under the Patents Act by approaching the Controller of Patents. The Controller has authority to grant compulsory licenses where anti-competitive practices have been established, to examine whether reasonable requirements of the public are being satisfied, and to ensure that patent rights are not abused to unreasonably restrain trade. This framework provides a mechanism to balance the legitimate interests of patent holders in obtaining returns on their innovations with the public interest in access to technology at reasonable terms.

The semiconductor industry, including radio chip manufacturing, is characterized by rapid technological advancement, high capital intensity, and complex value chains involving design, fabrication, assembly and testing. Competition in these markets depends on access to manufacturing capacity, intellectual property, and technological capabilities. The regulatory framework must therefore balance incentives for innovation and investment with ensuring competitive markets and preventing abuse of market power.

Digital Competition and Future Regulatory Developments

The Committee on Digital Competition Law constituted by the Ministry of Corporate Affairs released its report in March 2024 recommending enactment of a Digital Competition Act to enable ex-ante regulation of large digital enterprises [5]. The Committee noted that the current ex-post framework under the Competition Act 2002 does not facilitate timely redressal of anti-competitive conduct by digital enterprises. The Committee observed that present framework may not be effective to address irreversible tipping of markets in favor of large digital enterprises.

The proposed Digital Competition Act would empower the Competition Commission to designate certain large digital enterprises as Systemically Significant Digital Enterprises and Associate Digital Enterprises and to impose specific obligations on such entities. These obligations would include prohibitions on favoring their own products and services, using non-public data of business users to compete with those users, restricting users from using third-party applications, and requiring or incentivizing users to use other products or services offered by the designated enterprise. The draft legislation would enable ex-ante regulation, meaning intervention before harm occurs, rather than ex-post enforcement after anti-competitive conduct has taken place.

While the proposed Digital Competition Act primarily addresses online platforms and digital services, its principles may also have relevance under Competition Law for Radio Chip markets, to the extent these markets exhibit network effects, data advantages, or other characteristics typically associated with digital markets. The evolution of radio chip technology increasingly involves integration with software, cloud connectivity, and data processing capabilities, potentially bringing such technologies within the expanding scope of digital market regulation. The growing intersection between hardware technologies such as radio chips and software-driven platforms will therefore require careful consideration in the application of competition principles.

Conclusion

Radio chip technology and semiconductor markets in India are governed by a complex interplay of competition law, patent law, and sectoral regulations. The Competition Act 2002 provides the general framework for preventing anti-competitive agreements, prohibiting abuse of dominant position, and regulating combinations. The Patents Act 1970, particularly Chapter XVI, provides specific mechanisms for addressing competition concerns arising from the exercise of patent rights. The judicial pronouncements from the Delhi High Court and Supreme Court have clarified that the Patents Act, being a special statute, takes precedence over the Competition Act in matters relating to the exercise of patent rights.

This framework requires entities operating in radio chip markets to navigate carefully between the legitimate exercise of intellectual property rights and conduct that may constitute abuse under the Patents Act. In the context of radio chip technology and competition law, patent holders must ensure that their licensing practices satisfy statutory requirements, including working the patent in India, meeting the reasonable requirements of the public, and avoiding practices that unreasonably restrain trade. Licensees facing unreasonable licensing terms have recourse to the Controller of Patents for the grant of compulsory licenses or other appropriate relief.

Looking forward, the evolution of competition law enforcement in India will likely involve continued refinement of how traditional competition principles apply to technology markets characterized by rapid innovation, standardization, and network effects. The proposed Digital Competition Act represents a significant shift toward ex-ante regulation for certain digital markets. The semiconductor industry, including radio chip technologies, will need to adapt to this evolving regulatory landscape while maintaining incentives for innovation and investment that drive technological progress.

The regulatory framework must ultimately balance multiple objectives including promoting innovation, ensuring competitive markets, protecting consumer interests, and advancing strategic national objectives related to technology self-sufficiency. Achieving this balance requires coordination between competition authorities, patent authorities, and sectoral regulators, along with continued development of jurisprudence that addresses the unique characteristics of technology markets.

References

[1] Competition Commission of India. (2003). The Competition Act, 2002. Retrieved from https://www.cci.gov.in/images/legalframeworkact/en/the-competition-act-20021652103427.pdf 

[2] SCConline. (2023). Delhi High Court: Patent Act prevail over Competition Act. Retrieved from https://www.scconline.com/blog/post/2023/07/15/delhi-high-court-patent-act-prevail-competition-act-legal-updates-patent-act-special-statute/ 

[3] Shardul Amarchand Mangaldas. (2025). Indian competition law roundup: September 2025. Retrieved from https://www.amsshardul.com/insight/indian-competition-law-roundup-september-2025/ 

[4] Compliance Gate. (2023). RFID Product Regulations in the United States: An Overview. Retrieved from https://www.compliancegate.com/rfid-products-regulations-united-states/ 

[5] PRS India. (2024). Digital Competition Law. Retrieved from https://prsindia.org/policy/report-summaries/digital-competition-law 

[6] Oxford Academic. (2017). Patents and competition law in India: CCI’s reductionist approach in evaluating competitive harm. Journal of Antitrust Enforcement, 5(2), 299. Retrieved from https://academic.oup.com/antitrust/article/5/2/299/3788021 

[7] India Code. (2003). The Competition Act, 2002. Retrieved from https://www.indiacode.nic.in/handle/123456789/2010?view_type=browse 

[8] Norton Rose Fulbright. (n.d.). Competition law fact sheet: India. Retrieved from https://www.nortonrosefulbright.com/en/knowledge/publications/ba1b31d2/competition-law-fact-sheet-india 

[9] Kluwer Competition Law Blog. (n.d.). The Tussle over Jurisdiction: The Controller General of Patents v. Competition Commission of India. Retrieved from https://legalblogs.wolterskluwer.com/competition-blog/the-tussle-over-jurisdiction-the-controller-general-of-patents-v-competition-commission-of-india/ 

Published and Authorized by: Vishal Davda

The post Radio Chip Technology and Competition Law in India: Regulatory Framework, Legal Provisions and Judicial Interpretation appeared first on Bhatt & Joshi Associates.