Prior CCI Approval Mandatory For Resolution Plans Involving Combinations: Supreme Court

Introduction

In a recent decision¹, the Supreme Court of India (Court), interpreted the proviso to Section 31(4) of the Insolvency and Bankruptcy Code, 2016 (IBC) and held that, where a resolution plan provides for a combination under the Competition Act, 2002 (Competition Act), prior approval from the Competition Commission of India (CCI) is mandatory, before the Committee of Creditors (CoC) considers the plan.

Facts

Corporate Insolvency Resolution Process (CIRP) was initiated against Hindustan National Glass and Industries Ltd. (HNGIL/Corporate Debtor) before the National Law Company Tribunal, Kolkata (NCLT). HNGIL has a 60% market share of the glass packaging industry in India. Resolution plans were submitted by AGI Greenpac Ltd. (AGI) and Independent Sugar Corporation Ltd. (INSCO). AGI is the second largest company in the same filed as HNGIL.