Independent Sugar Corporation Ltd. vs. Girish Sriram Juneja
Citation: 2025 INSC 124; Supreme Court of India
Bench: Justice Hrishikesh Roy (majority), Justice Sudhanshu Dhulia (concurring), Justice S.V. Bhatti (dissenting)
Background
This landmark case arose from the insolvency resolution process of Hindustan National Glass and Industries Ltd. (HNGIL), a major player in the glass packaging sector. AGI Greenpac Ltd., another dominant company in the industry, submitted a resolution plan that would result in a significant market combination. Independent Sugar Corporation Ltd. (INSCO), a competing resolution applicant, challenged the process after the Resolution Professional (RP) allowed AGI Greenpac’s plan to be considered by the Committee of Creditors (CoC) without first obtaining approval from the Competition Commission of India (CCI), as required for combinations under the Competition Act, 2002.
The National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) had previously held that CCI approval could be obtained after CoC approval, treating the requirement as directory rather than mandatory.
Key Legal Issues
Is prior approval from the CCI mandatory before the CoC considers a resolution plan involving a combination under the Insolvency and Bankruptcy Code, 2016 (IBC)?
Can unsuccessful resolution applicants challenge procedural irregularities in the insolvency process?
Supreme Court’s Ruling
Mandatory CCI Approval:
The Supreme Court, by a 2:1 majority, held that obtaining CCI approval before submitting a resolution plan to the CoC is a mandatory requirement under the proviso to Section 31(4) of the IBC. The Court reasoned that this interpretation upholds the integrity of both the insolvency process and competition law, ensuring that anti-competitive combinations do not receive creditor approval without regulatory scrutiny.
Strict Compliance and Transparency:
The judgment emphasized that procedural compliance and transparency are essential in insolvency proceedings. By requiring CCI approval at the pre-CoC stage, the Court sought to prevent market distortions and protect consumer interests.
Locus Standi of Unsuccessful Applicants:
The Court affirmed that unsuccessful resolution applicants have the standing to challenge violations of mandatory procedures, promoting fairness and accountability in the corporate insolvency framework.
Overruling NCLT/NCLAT:
The Court expressly overruled the NCLT and NCLAT’s view that CCI approval is merely directory, clarifying that the statutory language and legislative intent require strict adherence to the sequence of approvals.
Justice S.V. Bhatti dissented, favoring a more flexible, directory approach to the timing of CCI approval.
Significance
This decision resolves a long-standing interpretational conflict and sets a binding precedent that CCI clearance is a legal precondition for CoC approval of resolution plans involving combinations. The judgment reinforces procedural discipline, protects competition, and strengthens the rights of all stakeholders in insolvency processes. Review petitions against this decision are pending.
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