LexINDEPENDENT SUGAR CORPORATION LTD. versus GIRISH SRIRAM JUNEJA & ORS.
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[2025] 1 S.C.R. 1782 : 2025 INSC 124 Independent Sugar Corporation Ltd. v. Girish Sriram Juneja & Ors. (Civil Appeal No. 6071 of 2023) 29 January 2025 [Hrishikesh Roy,* Sudhanshu Dhulia and S.V.N. Bhatti,* JJ.] Issue for Consideration Whether the approval of a proposed combination by the Competition Commission of India (CCI) must mandatorily precede the approval of the Resolution Plan, by the Committee of Creditors (CoC), as stipulated under the proviso to Section 31(4) of The Insolvency and Bankruptcy Code, 2016. Headnotes† Insolvency and Bankruptcy Code, 2016 – s.31(4) proviso – If mandatory or directory – Corporate Insolvency Resolution Process of ‘HNGIL’, the Corporate Debtor/Target Company with a 60% market share of the glass packaging industry in India – Proposed combination between ‘HNGIL’ and ‘AGI Greenpac’, the Successful Resolution Applicant and second largest company in the field of glass packaging and manufacturing in India, after HNGIL – Entire process from submission of AGI Greenpac’s Resolution Plan to its approval by the CoC challenged to be riddled with irregularities – Whether approval of a proposed combination by the Competition Commission of India (CCI) must mandatorily precede the approval of the Resolution Plan, by the Committee of Creditors (CoC) – Competition Act, 2002 – Competition Commission of India (Procedure in Regard to Transaction of Business relating to Combination) Regulations, 2011: Held: [per Hrishikesh Roy, J. (for himself and Sudhanshu Dhulia, J.)] 1. Proviso to Section 31(4) IBC was inserted by the Insolvency and Bankruptcy Code (Amendment) Act, 2018 – * Author Ed. Note: One judgment was pronounced by Hon’ble Mr. Justice Hrishikesh Roy on behalf of himself and Hon’ble Mr. Justice Sudhanshu Dhulia. Hon’ble Mr. Justice S.V.N. Bhatti pronounced two separate judgments – one for each of the two sets of appeals. An order was also passed by Hon’ble Mr. Justice Hrishikesh Roy on behalf of the Bench. [2025] 1 S.C.R. 1783 Independent Sugar Corporation Ltd. v. Girish Sriram Juneja & Ors. Introduction of a proviso, specifically addressing those Resolution Plans with provisions for combination, and the use of the term ‘prior’ therein, makes it starkly clear that the intent of the legislature was to create an exception – This ensures that in cases containing combination proposals, the approval of the CCI i.e., the regulatory body designated to ensure fair competition in markets and preventing anti-competitive practices, should first be obtained before the same is approved by the CoC – Legislative intent behind inserting the proviso to Section 31(4) IBC would suggest that prior approval of the CCI was specifically mandated and it should not be seen as a flexible provision to be ignored in certain exigencies – Use of the word ‘prior’ at the appropriate place in the proviso besides being direct, clear and unambiguous also does not lead to any absurd consequences – Proviso to Section 31(4) IBC mentions that the approval to the Resolution Plan from CCI shall be obtained ‘prior’ to its approval by the CoC – Therefore, to interpret the specific word to mean that such an approval can be obtained even ‘after’ and not necessarily ‘prior’ to the approval by the CoC would amount to reconstructing a statutory provision, which is not permissible – ‘Commercial wisdom’ accorded to the CoC being paramount, the legislature intentionally provided for a prior approval of the CCI with respect to Resolution Plans, containing combination proposals – Otherwise, an illogical situation may arise since any modifications so directed by the CCI, would be kept out of the scrutiny of the CoC and the CoC would be forced to exercise its commercial wisdom without complete information – When a Resolution Plan containing a provision for a combination that leads to an Appreciable Adverse Effect on Competition (AAEC) is placed before the CoC for approval before securing prior approval from the CCI, the Plan is incapable of being enforced or implemented – Specific consequences in law are provided under the IBC and the Competition Act for the same – Such a major omission cannot be cured at a later stage – Therefore, approval by CoC to such a deficient Resolution Plan can have no legal implications – In the present case, the CCI- unapproved Resolution Plan does not pass the muster – The same cannot be approved as it is in violation of Sections 30(2)(e), 30(3), 30(4) an
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