1. Corporate Insolvency Resolution Process — Resolution Plan containing combination — Dispute over timing of mandatory approval by Competition Commission of India under Section 31(4) of the Insolvency and Bankruptcy Code. (Para 1 , 2 , 3 , 4 , 5 , 8 , 9 , 11 , 12 , 13 )
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2025 Supreme(SC) 246
SUPREME COURT OF INDIA
HRISHIKESH ROY, SUDHANSHU DHULIA, S.V.N.BHATTI, JJ.
Independent Sugar Corporation Ltd. – Appellant
Versus
Girish Sriram Juneja & Ors. - Respondents
Civil Appeal No. 6071 of 2023 With Civil Appeal No. 4954 of 2023 Civil Appeal No. 4924 of 2023 Civil Appeal No. 4937 of 2023 Civil Appeal No. 5018 of 2023 Civil Appeal No. 5401 of 2023 Civil Appeal No. 6847 of 2023 Civil Appeal No. 6055 of 2023 Civil Appeal No. 6123 of 2023 Civil Appeal No. 6177 of 2023 Civil Appeal No. 7037 OF 2023 Civil Appeal No. 7038 of 2023 Civil Appeal No. 6771 of 2023 Civil Appeal No. 7428 OF 2023
Decided On : 29-01-2025
Important Points
The court ruled that the requirement for CCI approval under Section 31(4) of the IBC is directory, allowing for post-approval compliance to avoid stalling the CIRP.
Subject
Corporate Law - Insolvency and Bankruptcy
Act Referred
ARBITRATION AND CONCILIATION ACT: S.2(2)
COMPETITION ACT: S.5, S.29(1), S.53(b), S.6(2), S.30, S.20
Competition Commission of India Procedure in Regard to Transaction of Business relating to Combination Regulations: Reg.5
COMPETITION COMMISSION OF INDIA PROCEDURE IN REGARD TO TRANSACTION OF BUSINESS RELATING TO COMBINATIONS REGULATIONS: Reg.25(1)(a)
CONSTITUTION OF INDIA: Art.19(1)(g), Art.14
INCOME TAX ACT: S.10
INSOLVENCY AND BANKRUPTCY BOARD OF INDIA INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS REGULATIONS: Reg.36(a)(1)
INSOLVENCY AND BANKRUPTCY CODE: S.62, S.7, S.30(6), S.31(4), S.28(1), S.34(4)(a)
MAHARASHTRA CO-OPERATIVE SOCIETIES ACT: S.27(3)
PRESS COUNCIL ACT: S.6(7)
REPRESENTATION OF THE PEOPLE ACT: S.123(7)
COMPETITION ACT: S.5, S.29(1), S.53(b), S.6(2), S.30, S.20
Competition Commission of India Procedure in Regard to Transaction of Business relating to Combination Regulations: Reg.5
COMPETITION COMMISSION OF INDIA PROCEDURE IN REGARD TO TRANSACTION OF BUSINESS RELATING TO COMBINATIONS REGULATIONS: Reg.25(1)(a)
CONSTITUTION OF INDIA: Art.19(1)(g), Art.14
INCOME TAX ACT: S.10
INSOLVENCY AND BANKRUPTCY BOARD OF INDIA INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS REGULATIONS: Reg.36(a)(1)
INSOLVENCY AND BANKRUPTCY CODE: S.62, S.7, S.30(6), S.31(4), S.28(1), S.34(4)(a)
MAHARASHTRA CO-OPERATIVE SOCIETIES ACT: S.27(3)
PRESS COUNCIL ACT: S.6(7)
REPRESENTATION OF THE PEOPLE ACT: S.123(7)
Headnote
(A) Insolvency and Bankruptcy Code, 2016 - Section 31(4) - Competition Act, 2002 - Approval of combination - The NCLAT upheld the approval of AGI Greenpac's resolution plan for Hindustan National Glass and Industries Ltd. without prior CCI approval, interpreting the requirement as directory rather than mandatory. The court emphasized that the CCI's approval is essential for compliance with competition laws but can be obtained post CoC approval, ensuring the CIRP is not stalled. (Paras 155.1, 155.2, 155.3)
(B) Locus Standi - The court affirmed that the unsuccessful resolution applicant has the standing to challenge the approval of the resolution plan. (Paras 26, 27)
(C) Procedural Compliance - The court noted that the CCI's failure to issue a show cause notice to both parties to the combination was a significant procedural lapse, but did not invalidate the approval. (Paras 125, 126)
(B) Locus Standi - The court affirmed that the unsuccessful resolution applicant has the standing to challenge the approval of the resolution plan. (Paras 26, 27)
(C) Procedural Compliance - The court noted that the CCI's failure to issue a show cause notice to both parties to the combination was a significant procedural lapse, but did not invalidate the approval. (Paras 125, 126)
Legal Category Hierarchy
- insolvency and bankruptcy law
- competition law
- practice and procedure
Table of Contents
2. Whether the requirement for prior approval by the Competition Commission of India under the proviso to Section 31(4) of the Insolvency and Bankruptcy Code is mandatory or directory. (Para 18 , 19 , 20 , 21 , 22 )
3. Literal interpretation of unambiguous statutory language prevails — Prior approval ensures the Committee of Creditors exercises commercial wisdom on a legally viable plan — Procedural lapses in regulatory approval process. (Para 28 , 29 , 32 , 34 , 35 , 36 , 46 , 53 , 56 , 65 , 78 , 79 , 80 , 81 , 115 , 124 , 125 , 136 , 138 , 139 , 142 )
4. The proviso to Section 31(4) of the Insolvency and Bankruptcy Code mandatorily requires Competition Commission of India approval prior to the Committee of Creditors' approval of a combination. (Para 34 , 56 , 78 , 150 )
5. Is the requirement for CCI approval prior to CoC approval under Section 31(4) IBC mandatory?
Yes. The court held that the proviso to Section 31(4) is mandatory. Literal interpretation of the word prior ensures that the Committee of Creditors' commercial wisdom is exercised on a plan already vetted for competitive fairness and legal viability. (Para 34 , 56 , 78 , 150 )
6. When should literal interpretation be preferred over purposive interpretation in statutory construction?
Literal interpretation is preferred when the language of the provision is clear and unambiguous. Courts should not use purposive interpretation to rewrite a statute or ignore plain meaning, even if compliance causes hardship or inconvenience to a party. (Para 36 , 37 , 39 , 40 , 42 , 45 )
7. Must the Competition Commission of India issue a show cause notice to both the acquirer and the target company?
Yes. The term parties to the combination in Section 29(1) of the Competition Act must be understood in the plural, requiring notice to both the acquirer and the target entity to ensure transparency and fairness. (Para 124 , 125 , 133 , 134 , 139 )
8. Does a voluntary modification to a combination proposal require the approval of the target company?
Yes. Under Regulation 25(1A) of the Combination Regulations, voluntary modifications must bear the imprimatur of both the acquirer and the target, especially when the modification involves the divestment of the target's assets. (Para 136 , 137 , 138 )
9. How do material discrepancies in operational data affect regulatory approvals for combinations?
Regulatory decisions must be anchored in verifiable and transparent information. Material discrepancies in operational capacity data undermine the basis of competitive assessments and can justify the revocation of conditional approvals. (Para 140 , 141 , 142 , 143 )
JUDGMENT :
Hrishikesh Roy, J.
| Table of Contents |
| FACTUAL MATRIX |
| SUBMISSIONS |
| DISCUSSION & ANALYSIS |
| Objections on Locus Standi |
| Proviso to Section 31(4) IBC |
| Undertaking Interpretation: Why Literal and not Purposive? |
| Principle of Plain Meaning |
| Different Threshold for Combinations |
| Notes on Clauses, Memorandum & Scrivener’s Error |
| (Dis?)Harmony between Stipulated Timelines |
| Distinguishing cases relied upon by the NCLAT |
| Relevance of CCI & its scrutiny |
| Procedural Lapses under the Competition Act |
| Discrepancies in Data |
| Practical Challenges with Conditional Approvals |
| CONCLUSION |
FACTUAL MATRIX
1. These are statutory appeals under Section 62 of the Insolvency and Bankruptcy Code, 2016 [hereinafter referred to as ‘IBC’] against the judgment dated 18.09.2023 (impugned order) passed by the National Company Law Appellate Tribunal [hereinafter referred to as ‘NCLAT’] in appeals, pertaining to the Corporate Insolvency Resolution Process of the Hindustan National Glass and Industries Ltd. [hereinafter referred to as ‘HNGIL’]. Additionally, there is a set of appeals arising out of the NCLAT Order dated 28.07.2023, pertaining to the approval accorded to the combination between HNGIL and AGI Greenpac. In this common judgment, the parties are identified from Civil Appeal No. 6071 of 2023.
2. One key party in this matter is HNGIL i.e., the Corporate Debtor/Target Company with a 60% market share of the glass packaging industry in India. The Resolution Professional represents them. Incorporated in 1946, HNGIL has manufacturing plants located in Bahadurgarh (Haryana), Rishra (West Bengal), Neemrana (Rajasthan), Naidupeta (Andhra Pradesh), Sinnar (Maharashtra), Puducherry and Rishikesh (Uttarakhand), catering to a wide range of industries, including pharmaceutical and wellness, cosmetics, food & beverage, and alco-beverages, etc.
3. Combining with HNGIL is AGI Greenpac Ltd. [hereinafter referred to as ‘AGI Greenpac’] i.e., the Successful Resolution Applicant, which is the second largest company in the field of glass packaging and manufacturing in India, after HNGIL. With two manufacturing plants in Telangana, AGI Greenpac is the leading manufacturer of container glass. The combination between AGI Greenpac and HNGIL, with potential market share of 80-85% in F&B segment and 45-50% in alco-beverage segment, is generating a key issue for adjudication since the combination of the two major players in this sector is likely to result in an Appreciable Adverse Effect on Competition [hereinafter referred to as ‘AAEC’] in the glass packaging industry generally and in particular, within the sub- segments of F&B and alco-beverages.
4. The main contesting party to the aforementioned proposed combination is the Bermuda-registered Appellant – Independent Sugar Corporation Ltd. [hereinafter referred to as ‘INSCO’], incorporated in 1984, which also submitted their Resolution Plan for HNGIL – the Corporate Debtor/Target Company in India.
5. After the CIRP was initiated against HNGIL by DBS Bank [hereinafter referred to as ‘Financial Creditor’] under Section 7 of the IBC, the Adjudicating Authority i.e., National Company Law Tribunal (Kolkata Bench), admitted the matter on 21.10.2021. An Expression of Interest [hereinafter referred to as ‘EOI’] was floated on 25.03.2022, by the Resolution Professional as per Form G under Regulation 36(A)(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Within the EOI, Clauses 3.3 & 4.1.1(k) prescribed a mandatory requirement of approval from the Competition Commission of India [hereinafter referred to as ‘CCI’] prior to the approval of the Resolution Plan, by the Committee of Creditors [hereinafter referred to as CoC’].
6. In response to the above, both INSCO (Appellant) and AGI Greenpac submitted their respective Resolution Plans in April 2022, f
