INDEPENDENT SUGAR CORPORATION LIMITED vs GIRISH SRIRAM JUNEJA C.A. No. 6071/2023

-Sanskriti Verma In a landmark judgment delivered on January 29, 2025, the Supreme Court of India in Independent Sugar Corporation Ltd. v. Girish Sriram Juneja (Civil Appeal No. 6071 of 2023) decisively clarified the legal position concerning the interplay between insolvency resolution and competition law. The Court held that approval from the Competition Commission of India (CCI) must precede the approval of a resolution plan by the Committee of Creditors (CoC) under the Insolvency and Bankruptcy Code (IBC), where the resolution would result in a notifiable combination.

This ruling is not merely a matter of statutory interpretation—it reaffirms the primacy of regulatory harmony and safeguards the Indian market from hasty consolidations that may undermine competition.

The Dispute and the Legal Dilemma

The case arose from the corporate insolvency resolution process of Hindustan National Glass and Industries Ltd. (HNGIL), a market-dominant player in the glass packaging sector. AGI Greenpac, the successful resolution applicant, proposed a plan that would significantly enhance its market dominance. Though AGI filed Form I under the Competition Act, it proceeded to get CoC approval before securing a green light from the CCI. This sequence raised red flags—not just for the objecting party, Independent Sugar Corporation, but also for regulators and competition observers across India.

The National Company Law Appellate Tribunal (NCLAT) had earlier taken a lenient view, treating the requirement of CCI approval as “directory” rather than “mandatory.” The Supreme Court, however, rejected this interpretation and gave the phrase “prior approval” under Section 31(4) of the IBC its plain, purposive, and mandatory meaning.

CCI Approval: Not an Afterthought

The Court observed that allowing CoC to approve resolution plans before CCI clearance would effectively undermine the competition framework. It warned against creating a procedural loophole that could result in irreversible damage to market dynamics. The apex bench reaffirmed that every resolution plan involving a combination must first be vetted by the CCI, ensuring it does not cause an appreciable adverse effect on competition (AAEC).

In effect, the Court prioritized market integrity over creditor expediency—a bold but necessary stance in a fast-evolving economic landscape where insolvency proceedings can sometimes facilitate anti-competitive outcomes under the guise of revival.

Timeline Concerns Dismissed

Some arguments had warned that insisting on prior CCI clearance would delay the time-bound insolvency resolution process under the IBC. But the Court relied on empirical evidence, noting that CCI typically grants approval within 21 working days in Phase I, and even Phase II reviews are rarely inordinately long. Expediency cannot come at the cost of legality, the Court emphasized, especially when public interest and competition are at stake.

Wider Implications of the Ruling

The judgment marks a watershed moment for corporate law in India:

1. For Resolution Applicants: Compliance with competition norms is now non negotiable at the bidding stage itself.

2. For CoCs: This decision imposes a procedural discipline—ensuring market health is evaluated before any financial rescue is endorsed.

3. For the CCI: It empowers the commission to play a proactive role, ensuring resolution plans do not facilitate monopolistic consolidation.

4. For Policymakers: The ruling underscores the need for clearer procedural alignments between insolvency and competition frameworks, possibly even suggesting fast-track protocols where urgent resolution is needed but without compromising regulatory oversight.

A Blueprint for Future Harmony

What makes this judgment especially significant is its insistence on inter-regulatory respect and procedural order. The Supreme Court’s message is clear: revival of stressed assets must not come at the cost of consumer choice, market fairness, or long-term economic competition.

Moreover, by voiding the AGI Greenpac resolution plan and directing fresh consideration of competing plans (including Independent Sugar’s), the Court has shown it is not reluctant to unravel flawed decisions if they compromise statutory integrity.

Conclusion: Order Restored Between Revival and Regulation

The Supreme Court has delivered a principled verdict that aligns insolvency and competition law without sacrificing the core objectives of either. In doing so, it has not only preserved the health of India’s insolvency framework but has also safeguarded the competitive fabric of the marketplace. The judgment in Independent Sugar Corporation Ltd. v. Girish Sriram Juneja will serve as a guiding light for resolution applicants, insolvency professionals, and regulators alike—a landmark in harmonizing the twin goals of economic revival and market fairness.