INDEPENDENT SUGAR CORPORATION LTD. versus GIRISH SRIRAM JUNEJA & ORS.

INDEPENDENT SUGAR CORPORATION LTD. versus GIRISH SRIRAM JUNEJA & ORS.

By a majority (Hon'ble Mr. Justice Hrishikesh Roy for himself and Hon'ble Mr. Justice Sudhanshu Dhulia) the proviso to section 31(4) IBC is mandatory in effect: where a resolution plan contains a provision for a combination as referred to in section 5 of the Competition Act, the resolution applicant must obtain CCI approval under the Competition Act prior to the approval of such resolution plan by the Committee of Creditors; approval of a resolution plan by the CoC in the absence of prior CCI approval in such cases is ineffective and the CoC approval to AGI Greenpac's plan dated 28.10.2022 was set aside, actions pursuant to that plan were nullified and the CoC directed to reconsider plans...

Parties
Appellant (unsuccessful Resolution Applicant): Independent Sugar Corporation Ltd.; Respondent (successful Resolution Applicant): AGI Greenpac Ltd.; Respondent (resolution Professional): Girish Sriram Juneja
Jurisdiction
India
Judgment Date
29 January 2025
Procedural Posture
Statutory Appeals Under Section 62 of the Insolvency and Bankruptcy Code, 2016 (civil Appeals) / Final Disposal by the Supreme Court on Appeal From NCLAT and NCLT Orders
Legal Topics
Proviso to Section 31(4) IBC (prior CCI Approval), Mandatory Vs Directory Interpretation of Statutory Provisos, Procedure for Combinations Under the Competition Act (s.29), Locus Standi of Unsuccessful Resolution Applicant, Interplay of IBC Timelines With Competition Act Timelines
Insolvency and Bankruptcy Competition Law Statutory Interpretation Proviso to Section 31(4) IBC (prior CCI Approval) Mandatory Vs Directory Interpretation of Statutory Provisos Procedure for Combinations Under the Competition Act (s.29) Locus Standi of Unsuccessful Resolution Applicant Interplay of IBC Timelines With Competition Act Timelines

Case Brief

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Parties

Independent Sugar Corporation Ltd.

Appellant (unsuccessful Resolution Applicant)

AGI Greenpac Ltd.

Respondent (successful Resolution Applicant)

Girish Sriram Juneja

Respondent (resolution Professional)

Procedural Posture

Statutory Appeals Under Section 62 of the Insolvency and Bankruptcy Code, 2016 (civil Appeals) / Final Disposal by the Supreme Court on Appeal From NCLAT and NCLT Orders

Legal Issues

  1. 1 Whether where a resolution plan contains a provision for a combination as referred to in section 5 of the Competition Act, 2002, the approval of the Competition Commission of India must be obtained prior to approval of the resolution plan by the Committee of Creditors under the proviso to section 31(4) IBC
  2. 2 Whether the proviso to section 31(4) IBC is mandatory or directory in nature
  3. 3 Whether CCI must issue a show cause notice to all 'parties to the combination' including the target/corporate debtor in a CIRP combination matter

Ratio Decidendi

By a majority (Hon'ble Mr. Justice Hrishikesh Roy for himself and Hon'ble Mr. Justice Sudhanshu Dhulia) the proviso to section 31(4) IBC is mandatory in effect: where a resolution plan contains a provision for a combination as referred to in section 5 of the Competition Act, the resolution applicant must obtain CCI approval under the Competition Act prior to the approval of such resolution plan by the Committee of Creditors; approval of a resolution plan by the CoC in the absence of prior CCI approval in such cases is ineffective and the CoC approval to AGI Greenpac's plan dated 28.10.2022 was set aside, actions pursuant to that plan were nullified and the CoC directed to reconsider plans...