Independent Sugar Corporation Ltd v. Girish Sriram Juneja & Ors.
Case at a glance
Provisions considered
Key paragraphs
- Para 22. To ensure that entities operate with utmost confidence in the sanctity and fairness of India’s legal and regulatory system, the objectives of the IBC and the Competition Act must also necessarily be in harmony with one another. Within that context, while the IBC’s primary…
- Para 3030. A few paragraphs from the impugned NCLAT order being relevant are extracted herein below: ... ... 33. The question of obtaining approval from the CCI only arises when Resolution Plan submitted contains a combination and require approval from the CCI. After submission of Plan…
Judgment
(for himself and Sudhanshu Dhulia, J.)]
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 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) and 34(4)(a) of the IBC – It does ‘contravene provisions of the law for the time being in force’ – On the aspect of a possible disharmony between the stipulated timeline to be followed under the IBC and the Competition Act, the NCLAT in the impugned order has held the proviso to Section 31(4) IBC, to be directory in nature since mandatory prior approval of the CoC, would lead Independent Sugar Corporation Ltd. v.
Girish Sriram Juneja & Ors. 1784 [2025] 1 S.C.R. to disruption in the CIRP timeline, as stipulated under the IBC – However, the model timelines prescribed under any regulations, i.e., in the current case, Regulation 40A of CIRP Regulations, cannot by any stretch, supersede a statutory provision i.e., the proviso to Section 31(4) of the IBC – In fact, the subordinate legislation must be interpreted in a manner that conforms to the statute, and not the other way around, as was unacceptably rationalised by the NCLAT – As far as the two timelines stipulated under the IBC and the Competition Act are concerned, the same do not usually cause any disharmony or conflict – The only exception could be in the extremely rare circumstances, influenced by external factors – But such extreme and unlikely situations cannot and should not be allowed to influence interpretative exercise on the functioning of the legislative framework which will fit in with most cases. [Paras 32, 34, 53, 65, 79, 80, 86-89].
To ensure that entities operate with utmost confidence in the sanctity and fairness of India’s legal and regulatory system, the objectives of the IBC and the Competition Act must also necessarily be in harmony with one another. Within that context, while the IBC’s primary objective is the timely resolution of stressed assets with maximised value realisation for the stakeholders, the significant delay seen in the present case is both unfortunate and regrettable – Nevertheless, expeditious resolution cannot come at the cost of disregarding statutory provisions – Providing relief for stressed assets must necessarily align with the statutory framework, as adherence to legal principles is fundamental to a fair and just resolution process – In the present case, the statutory provision and legislative intent unequivocally affirm the mandatory nature of the proviso to Section 31(4) IBC – For a Resolution Plan containing a combination, the CCI’s approval to the Resolution Plan must be obtained before and consequently, the CoC’s examination and approval should be only after the CCI’s decision – This interpretation respects the original legislative intent, and deviation from the same would not only undermine the statute but would also erode the faith posed by the stakeholders in the integrity of our legal and regulatory framework – Where the provisions allow for dilution or departure from the intended scheme of the IBC or the Competition Act, it is the responsibility of the legislature to rectify such inconsistencies through appropriate legislative measures and the judiciary should not normally venture into the legislative domain – Further, indispensability of procedural safeguards as an integral component Supreme Court Reports [2025] 1 S.C.R. 1785 of a just legal order must be given its due weight, especially as procedural requirements are not mere formalities to be circumvented for expediency but substantive protections designed to ensure fairness and transparency – In that light, the procedural lapses with respect to objections to the proposed combination and the consequent divestiture modification proposed within the framework of the Competition Act, 2002, seriously vitiated the integrity of the process – Adherence to procedural propriety is non-negotiable and the ends cannot justify the means – By upholding the mandatory nature of the statutory provision and emphasising upon the critical importance of procedural safeguards, the principle of rule of law is upheld in alignment with global best practices which underscore fairness, predictability and transparency – Such an approach not only reinforces the integrity and credibility of the legal framework but also highlights India’s commitment to fostering a regulatory environment, which is conducive to both business and innovation – Additionally, it also ensures the protection and enforcement of rights in an equitable manner, free from bias or favouritism – Therefore, a balance between the need for expeditious relief and adherence to the statutory framework must necessarily be maintained, in order to ensure that the objectives of both, the IBC and the Competition Act are met in a manner that supports India’s long-term economic aspirations – The AGI Greenpac’s Resolution Plan is unsustainable as it failed to secure prior approval from the CCI, as mandated under the proviso to Section 31(4) IBC – Consequently, the approval granted by the CoC to the Resolution Plan dated 28.10.2022 without the requisite CCI approval, cannot be sustained and is hereby set aside and quashed – Any action taken pursuant to the Resolution Plan shall stand nullified, and the rights of all stakeholders shall be restored as per status quo ante, prior to the approval of the Resolution Plan by the CoC on 28.10.2022 – Consequently, the CoC shall reconsider the Appellant’s Resolution Plan and any other Resolution Plans which possessed the requisite CCI approval as on 28.10.2022 i.e., the date on which the CoC voted upon the submitted Resolution Plans. [Paras 148-154, 155.1, 155.2, 155.3]. Held: (per S.V.N. Bhatti, J.) The question as to whether a requirement under the statute is mandatory or directory depends upon the intent of the legislature and not upon the language in which the intent is clothed – Use of the word ‘shall’ raises a presumption that the particular provision is imperative – However, the prima facie inference about the provision being imperative Independent Sugar Corporation Ltd. v.
Girish Sriram Juneja & Ors. 1786 [2025] 1 S.C.R. may be rebutted by other considerations, such as:– The object, scope of the enactment, and the consequences flowing from such construction – Interpretation of the word ‘shall’ as directory has been a purposive effort of the court – In determining whether the word ‘shall’ is mandatory or directory, the court examines noscitur a sociis, the operation, functions, duties, and consequences for non- performance – The rule of literal interpretation with its exceptions is noted, and the grammatical interpretation of sections 30 and 31 of IBC sets the stages of consideration of twin approvals, one by the CoC, and the other by the Adjudicating Authority, while approval or rejection is granted to the resolution plan – The combination approval as an enclosure to an applicable resolution plan at the stage of section 30(4) IBC is a form or procedure that does not have consequences – When adopting a consequentialist approach, it becomes clear that the insistence upon a combination approval at the stage of Section 30(4) does not place the stakeholders at an advantageous position – Proviso to sub-section (4) of section 31 is directory and would be compliant with IBC and the Competition Act – Hence, the combination approval of CCI at the stage of consideration of the resolution plan by the Adjudicating Authority under section 31(1) would be proper and legal – Such interpretation keeps the operations of the successful resolution applicant as a going concern, without deviating from the rigour of 63 the Competition Act, and simultaneously, a one-year window is granted to obtain licenses, permissions, consents and other regulatory approvals envisaged by a host of laws – Therefore, the proviso is to be interpreted purposively and it is held that approval of a combination of CCI at the stage of consideration by CoC is directory and not mandatory – By operation of section 31(2) of the IBC, to avoid rejection of a fully compliant and voted resolution plan, the Adjudicating Authority confirms that the approval of the combination is available before implementing the resolution plan – At best, the use of the words “prior to” is a temporal expression whose mandatory or directory nature is to be determined from the context surrounding section 31 – IBC and the Competition Act have timelines for the discharge of a duty and function – It is impermissible to interpret the provisions in one enactment by keeping in perspective the starting point of a timeline and the termination of a timeline in the other enactment – The enactments are allowed to work parallelly and without pressure for performance from the other in line with the duties and obligations cast through the enactments – NCLAT in ArcelorMittal, Vishal Vijay Kalantari Supreme Court Reports [2025] 1 S.C.R. 1787 and Makalu Trading Limited held that the requirement under proviso to sub-section (4) of section 31 is directory at the stage of CoC approval – View of NCLAT was confirmed by this Court while referring to the NCLAT judgment in ArcelorMittal - Argument against the view taken by this Court in Vishal Vijay Kalantari and Makalu Trading Limited is rejected – Idea of IBC is to let the financial markets work – Adjudicating Authority to dispose of the Application filed by the Resolution Professional. [Paras 75-82, 82.1 and 85 of first judgment] Rules of interpretation – Literal or Purposive – Whether rule of purposive interpretation should be adopted in order to interpret the proviso to s.31(4) of IBC and not the principles of literal interpretation – Insolvency and Bankruptcy Code, 2016: Held: [per Hrishikesh Roy, J. (for himself and Sudhanshu Dhulia, J.)] To understand the legislative intent, the Rule of Plain Reading or literal interpretation should find favour rather than the rule of purposive interpretation – When the language of the provision is clear and unambiguous, literal interpretation is the best way to understand the legislative intention behind enacting the particular provision – Statutory enactments like the IBC demand strict adherence to legislative intent, guarding against procedural overreach that may upset the framework envisioned by the Parliament – Where the language is clear, plain and unambiguous, the courts are duty-bound to give effect to the meaning that can be inferred from a statute, irrespective of the consequences – Mere inconvenience being caused to a party, by virtue of the plain and literal interpretation accorded to a statute, cannot be reason enough to forego such interpretation – When the language is unambiguous, as in the present matter, the courts must respect its ordinary and natural meaning instead of wandering into the realm of speculation and unintended overreach invoking the so-called ‘spirit of the law’ – Language of the proviso to Section 31(4) IBC appears to be clear with no ambiguity and in those situations, all words finding place in the provision must be given their due meaning – Efforts must be to construe any text, phrase and/or proviso in a reasonable manner without going beyond the limited range of permissibility within which the legislative meaning can be captured – Use of the word ‘prior’ in the proviso, must be given some meaning as by virtue of the same, the statute requires that the act of obtaining CoC approval for the Resolution Plan must Independent Sugar Corporation Ltd. v.
Girish Sriram Juneja & Ors. 1788 [2025] 1 S.C.R. be done in a particular manner i.e., the necessary CCI approval for Resolution Plans containing combination proposals must be obtained prior to such Plan, being granted the CoC’s approval. [Paras 35, 36, 38, 42, 45, 55, 56] Held: (per S.V.N. Bhatti, J.) To arrive at which one of the interpretations is applicable, the summary of the idea, roadmap, implementation, and conclusion of the IBC, as well as the extent needed, is considered – Literal interpretation satisfies the application of exact meaning to the words used in the proviso, but whether such application is consistent with other provisions in section 31 is to be determined – If literal interpretation leads to inconsistency with the text and tense used in section 31, then the Court attempts to resolve it to make the section consistent in text and tense – The IBC was enacted with the intention of improving the ease of doing business in India – In line with this thinking, one of the legislative measures is the amendment to the proviso to sub-section (4) of section 31 of the IBC – The Parliament has not incorporated the proviso to sub-section (4) of section 31 in the text of section 30 of the IBC – Section 30(2) of the IBC, read with Regulation 39(4) of CIRP Regulations, 2016, has provided for what is to be reported to the CoC by RP through Form H – The rules of grammar are to be applied unless those rules contradict the legislative intent or purpose – This statement is more so if it refers to legislative intent or purpose manifested in the only manner in which a legislature can authoritatively do so in the text of the enactment – Though not to find out violability in the text of the enactment, but to keep the content consistent throughout the enactment – The court gathers the meaning of all the expressions used in the same section – In this manner, the courts have applied grammatical construction to provisions of law – In sub-section (2) of section 31, the words “does not confirm to the requirements of sub-section (1) of section 31” grammatically interpreted throw light on the stage of satisfactory compliance of all the requirements of sub-section (2) of section 30 – The Parliament, in its wisdom, would have employed the expression “did not” in place of “does not” if the requirement is that the resolution plan is fully compliant at a stage before consideration of the resolution plans by the CoC – As part of the interpretative process, the Court ought not to lose sight of expressions which are in the present tense, such as “meets”, “does not”, and “satisfies” in section 31 of the IBC – To keep section 31 uniform in all perspectives, in the place of literal interpretation, purposive Supreme Court Reports [2025] 1 S.C.R. 1789 interpretation is apt; therefore, the word ‘shall’ in the proviso to section 31(4) of the IBC is interpreted and held as directory. [Paras 46, 52, 59, 67, 68, 78 of the first judgment]. Competition Act, 2002 – s.29 – Competition Commission of India (Procedure in Regard to Transaction of Business relating to Combination) Regulations, 2011 – Regulation 2(f) – Show cause notice to the Parties to combination – Term ‘Parties’ – Meaning of: Held: [per Hrishikesh Roy, J. (for himself and Sudhanshu Dhulia, J.)] Section 29(1) of the Competition Act and Regulation 2(f) of the Competition Regulations, 2011 mandate the issuance of a Show Cause Notice [‘SCN’] to the ‘parties to the combination’ if and when the CCI forms a prima facie opinion that a combination is likely to cause or has caused Appreciable Adverse Effect on Competition (AAEC), within the relevant market – The term ‘parties to the combination’ as explicitly defined under Regulation 2(f) includes both entities entering into the combination and the combined entity, if the combination has come into effect – The term ‘to the parties to the combination’ cannot be restricted to the proposed acquirer alone – The term ‘parties’ may appear broad and/or encompassing all related entities associated with the combination, such an interpretation cannot dilute the inherent plurality attached to the word ‘parties – The use of the plural form signifies a clear legislative intent to address not just one entity but multiple parties directly involved in the combination process, including but not limited to the acquirer, the target, and, where applicable, the combined entity, if the combination has come into effect – The term ‘parties’ must be understood to cover both entities participating in and directly affected by the combination, ensuring the integrity of competition assessment and compliance with statutory provisions under Sections 29(1) and 29(2) – To argue otherwise would not only mutilate the term ‘parties’ but would also result in procedural lapses and incomplete analysis, defeating the very purpose of the regulatory oversight. [Paras 124, 126, 133, 134]. Held: (per S.V.N. Bhatti, J.) The CCI must issue notice to the acquirer and also the target, i.e., the corporate debtor subjected to the resolution process represented by an RP – Irrespective of different statutory schemes in the sections relied on by CCI, it can be said that the words “it shall issue notice to the parties to Independent Sugar Corporation Ltd. v.
Girish Sriram Juneja & Ors. 1790 [2025] 1 S.C.R. show cause” cannot be restricted only to the proposed acquirer – If the plural expression on a case-to-case basis is understood as singular, then it would restrict the meaning of the language. [Para 33 of the second judgment] Words and Phrases – Term ‘any person aggrieved’ appearing in s.62 of IBC and s.53T of the Competition Act – Meaning of – Held: [per Hrishikesh Roy, J. (for himself and Sudhanshu Dhulia, J.)] Term ‘any person aggrieved’ appearing in s.62 of IBC and s.53T of the Competition Act must be understood widely and not in a restricted fashion – Appellant as an unsuccessful resolution applicant whose Resolution Plan could have otherwise been approved by the CoC, satisfies the requirement of being aggrieved. [Paras 26, 27] Interpretation of Statutes – Proviso – Purpose of – Held: [per Hrishikesh Roy, J. (for himself and Sudhanshu Dhulia, J.)] A proviso in a given statute may be introduced to serve various purposes, like qualifying or excepting certain provisions from the main enactment or insisting on certain mandatory conditions to be fulfilled in order to make the enactment workable or as an optional addenda to explain the real intendment of the statutory provision – Ordinarily, however, the function of a proviso is to except something out of the enactment or to qualify something enacted therein. [Para 33] Rules of interpretation – Whether permits courts to read a certain word, term or phrase in the statute differently from its plain meaning: Held: [per Hrishikesh Roy, J. (for himself and Sudhanshu Dhulia, J.)] Rules of interpretation permit courts to read a certain word, term or phrase in the statute differently from its plain meaning if it leads to absurdity but the courts must always remain conscious of the fine dividing line, separating adjudication and legislation, which must not be crossed. [Para 64] Rules of interpretation – Literal interpretation vis-a-vis legislative debates, committee reports and/or historical contexts – Held: [per Hrishikesh Roy, J.) (for himself and Sudhanshu Dhulia, J.)] While literal interpretation must remain the judiciary’s guiding light, insights gained from legislative debates, committee reports and/or historical contexts may be looked at with a degree of caution. [Para 67] Supreme Court Reports [2025] 1 S.C.R. 1791 Rules of interpretation – Notes on Clauses vis-à-vis Memorandum explaining particular clauses – Held: [per Hrishikesh Roy, J. (for himself and Sudhanshu Dhulia, J.)] Memorandum explaining a particular proviso stands at a lower footing when compared with Notes on Clauses, explaining the entire amendment, especially in cases where the language in the statute is definite and straightforward. [Para 76] Insolvency and Bankruptcy Code, 2016 – Corporate Insolvency Resolution Process (CIRP) – Locus standi of unsuccessful resolution applicant – Term ‘any person aggrieved’ appearing in Section 62 of the IBC and Section 53T of the Competition Act – Meaning of: Held: [per Hrishikesh Roy, J. (for himself and for Sudhanshu Dhulia, J.)] Once the CIRP is initiated, the nature of proceedings are no longer in personam but rather become in rem – Term ‘any person aggrieved’ appearing in Section 62 of the IBC and Section 53T of the Competition Act must be understood widely and not in a restricted fashion – Appellant as an unsuccessful resolution applicant whose Resolution Plan could have otherwise been approved by the CoC, satisfies the requirement of being aggrieved – Preliminary locus standi objection vis-à-vis the Appellant, therefore, does not merit acceptance. [Paras 26, 27] Case Law Cited In the judgement of Hrishikesh Roy, J. Committee of Creditors of Essar v.
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Independent Sugar Corporation Ltd. v. Girish Sriram Juneja & Ors. 1794 [2025] 1 S.C.R. Books and Periodicals Cited In the judgment of Hrishikesh Roy, J. Bennion on Statutory Interpretation, 5th Edn., Francis Bennion; Appraisal of the Principle of Plain Meaning, Chapter 1 – Basic Principles, Justice G.P. Singh’s Principle of Statutory Interpretation (15th Edition), 2016; Ried Macdonald and Fordham, Cases and other Materials on Legislation, 2nd Edn; Ryan Doerfler, The Scrivener’s Error, Northwestern University Law Review, Vol. 110 (2016); Justice Antonion Scalia, Common Law Courts in Civil Law System: The Role of United States Federal Courts in Interpreting the Constitution and Laws, A Matter of Interpretation: Federal Courts and the Law, 3 (Amy Gutmann, ed., 1997) – referred to. In the judgments of S.V.N. Bhatti, J. Earl T. Crawford, The Construction of Statutes (Thomas Law Book Company, 1940), p.
516 – referred to. List of Acts Insolvency and Bankruptcy Code, 2016 ; Competition Act, 2002; Competition Commission of India (Procedure in Regard to Transaction of Business relating to Combination) Regulations, 2011; CIRP Regulations, 2016. List of Keywords Corporate-debtor; Resolution Professional; Resolution Applicant; Appreciable Adverse Effect on Competition; Resolution Plan; CIRP; Committee of Creditors; Approval of resolution plan; Prior approval; Directory or mandatory; Rules of interpretation; Insolvency and Bankruptcy; Competition Commission of India; Literal interpretation; Purposive interpretation; Interplay between the IBC and the Competition Act. Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6071 of 2023 From the Judgment and Order dated 18.09.2023 of the National Company Law Appellate Tribunal in CAAT (I) Nos. 735, 807, 607 and 724 of 2023 With Civil Appeal No(s).
4954, 4924, 4937, 5018, 5401, 6847, 6055, 6123, 6177, 7037, 7038, 6771 and 7428 of 2023 Supreme Court Reports [2025] 1 S.C.R. 1795 Appearances for Parties Advs. for the Appellant: Dhruv Mehta, Rajshekhar Rao, Abhijeet Sinha, Dr. Abhishek Manu Singhvi, Mahesh Jethmalani, Abhimanyu Bhandari, Dushyant Dave, Mukul Rohatgi, Parag Tripathi, Rana Mukherjee, Amit Sibal, Ms. Liz Mathew, Balbir Singh, Sr. Advs., Indranil Ghosh, Debabrata Das, Palzer Moktan, Ms. Aanchal Tikmani, Aditya Shukla, Saptarshi Mukherjee, Ms. Mehrunissa Anand Jaitley, Harshil Wason, Ms. Mrinal Choudhary, Ms. Mehr Bedi, Advait Ghosh, Utsav Trivedi, Avishkar Singhvi, Ms. Unnati Agrawal, Ms. Manini Roy, Piyush Tiwari, Ms. Nandini Acharya, Siddharth Seem, Ms. Mugdha Pande, Ajay Awasthi, Swapnil Singh, Ms. Dhanakshi Gandhi, Ms. Rooh-E-Hina Dua, Buddy Ranganadhan, Samar Bansal, Pawas Kulshrestha, Parv Garg, K.S.Rekhi, Ms. Nandini Tomar, Ms. Shefali Tripathi, Ms.
Divya Jain, Nikhil Jain, Yadunath Bhargavan, Neeraj Chaudhari, Raghav Agrawal, Udit Sidhra, Dhanya Krishnan, Akshay Chandra, Mohit D. Ram, Anubhav Sharma, Chirag Shah, Sanjeev Sharma, Vaibhav Gaggar, Akshay Nanda, Ms. Sanya Sud, Ms. Vaishali Goyal, Ms. Praniti Ganjoo, Aditye Arora, Keshav Sehgal, Ms. Monika Lakhanpal Gaggar, Ms. Kokila Kumar, Anirudh Krishan Gandhi, Debargha Roy, Mohit Rai, Ms. Divya Joshi, Ms. Somya Chaturvedi, Dhruv Mehta, Utkarsh Tiwari, Ms. Daisy Hannah, Ms. Oindrila Sen, Ms. Sneha Ahmed, Samarth Mohanty, Ms. Pratiksha Sharma, Ankit Acharya, Aditya Shukla, Darpan Sachdeva, Ms. Mallika Agarwal, Vinamra Koparhia, Saksham Dhingra, Ms. Bagavathy Vennimalai, Ms. Ritu Chaudhary, Rajnish Prasad, Udayan Jain, Ms. Monica Benjamin, Raj Surana, Ranjan Mishra, Ms. Ananya Singh. Advs. for the Respondents: Tushar Mehta, Solicitor General, Balbir Singh, Rana Mukherjee, Rajshekhar Rao, Mukul Rohatgi, Parag Tripathi, Dr.
Abhishek Manu Singhvi, Mahesh Jethmalani, Abhimanyu Bhandari, Shyam Divan, Sr. Advs., Rajnish Prasad, Udayan Jain, Ms. Monica Benjamin, Raj Surana, Ranjan Mishra, Ms. Daisy Hannah, Ms. Oindrila Sen, Ms. Sneha Ahmed, Samarth Mohanty, Indranil Ghosh, Debabrata Das, Palzer Moktan, Ms. Aanchal Tikmani, Ms. Misha, Soummo Biswas, Siddhant Kant, Ms. Moulshree Shukla, Ms. Gayathri Balasubramanian, Yugal Jain, S. S. Shroff, Indranil Ghosh, Debabrata Das, Palzer Moktan, Ms. Aanchal Tikmani, Sanjeev Sharma, Vaibhav Gaggar, Akshay Nanda, Ms. Sanya Sud, Ms. Vaishali Goyal, Ms. Praniti Ganjoo, Aditye Arora, Keshav Independent Sugar Corporation Ltd. v. Girish Sriram Juneja & Ors. 1796 [2025] 1 S.C.R. Sehgal, Ms. Monika Lakhanpal Gaggar, Ms. Kokila Kumar, Anirudh Krishan Gandhi, Debargha Roy, Mohit Rai, Ms. Divya Joshi, Ms. Somya Chaturvedi, Dhruv Mehta, Utkarsh Tiwari, Samar Bansal, Pawas Kulshrestha, Parv Garg, K. S. Rekhi, Ms.
Divya Jain, Nikhil Jain, Utsav Trivedi, Avishkar Singhvi, Ms. Unnati Agrawal, Ms. Manini Roy, Piyush Tiwari, Ms. Nandini Acharya, Siddharth Seem, Ms. Mugdha Pande, Ajay Awasthi, Swapnil Singh, Ms. Dhanakshi Gandhi, Ms. Rooh-e-hina Dua, Vikram Wadhera, Ms. Smriti Churiwal, Jaiveer Kant, Ms. Meher Thapar. Judgment / Order of the Supreme Court Table of Contents* Factual Matrix ........................................................................... SubMiSSionS................................................................................. DiScuSSion & analySiS.................................................................. Objections on Locus Standi.............................................. Proviso to Section 31(4) IBC.............................................. Undertaking Interpretation: Why Literal and not Purposive? 2 9 16 16 17 21 Principle of Plain Meaning..................................................... 24 Different Threshold for Combinations.................................. Notes on Clauses, Memorandum & Scrivener’s Error.......... 33 35 (Dis?) Harmony between Stipulated Timelines...................... 43 Distinguishing cases relied upon by the NCLAT................. Relevance of CCI & its scrutiny.......................................... Procedural Lapses under the Competition Act ................. Discrepancies in Data........................................................... 49 53 58 67 Practical Challenges with Conditional Approvals................ 69 concluSion.................................................................................. 71 * Ed. Note: Pagination as per the original Judgment. Supreme Court Reports [2025] 1 S.C.R. 1797 Hrishikesh Roy, J. Judgment# Factual Matrix
1. These are statutory appeals under Section 62 of the Insolvency and Bankruptcy Code, 2016 [hereinafter referred to as ‘IBC’] against the judgement dated 18.09.2023 (impugned order) passed by the National Company Law Appellate Tribunal [hereinafter referred to as ‘NCLAT’] in appeals, pertaining to the Corporate Insolvency Resolution Process of the Hindustan National Glass and Industries Ltd. [hereinafter referred to as ‘HNGIL’]. Additionally, there is a set of appeals arising out of the NCLAT Order dated 28.07.2023, pertaining to the approval accorded to the combination between HNGIL and AGI Greenpac. In this common judgment, the parties are identified from Civil Appeal No. 6071 of 2023.
2. One key party in this matter is HNGIL i.e., the Corporate Debtor/Target Company with a 60% market share of the glass packaging industry in India. The Resolution Professional represents them. Incorporated in 1946, HNGIL has manufacturing plants located in Bahadurgarh (Haryana), Rishra (West Bengal), Neemrana (Rajasthan), Naidupeta (Andhra Pradesh), Sinnar (Maharashtra), Puducherry and Rishikesh (Uttarakhand), catering to a wide range of industries, including pharmaceutical and wellness, cosmetics, food & beverage, and alco-beverages, etc.
Combining with HNGIL is AGI Greenpac Ltd. [hereinafter referred to as ‘AGI Greenpac’] i.e., the Successful Resolution Applicant, which is the second largest company in the field of glass packaging and manufacturing in India, after HNGIL. With two manufacturing plants in Telangana, AGI Greenpac is the leading manufacturer of container glass. The combination between AGI Greenpac and HNGIL, with potential market share of 80-85% in F&B segment and 45-50% in alco-beverage segment, is generating a key issue for adjudication since the combination of the two major players in this sector is likely to result in an Appreciable Adverse Effect on Competition [hereinafter # Ed. Note: Judgment pronounced by Hon’ble Mr. Justice Hrishikesh Roy on behalf of himself and Hon’ble Mr. Justice Sudhanshu Dhulia. Independent Sugar Corporation Ltd. v. Girish Sriram Juneja & Ors. 1798 [2025] 1 S.C.R. referred to as ‘AAEC’] in the glass packaging industry generally and in particular, within the sub-segments of F&B and alco-beverages.
The main contesting party to the aforementioned proposed combination is the Bermuda-registered Appellant – Independent Sugar Corporation Ltd. [hereinafter referred to as ‘INSCO’], incorporated in 1984, which also submitted their Resolution Plan for HNGIL – the Corporate Debtor/Target Company in India.
After the CIRP was initiated against HNGIL by DBS Bank [hereinafter referred to as ‘Financial Creditor’] under Section 7 of the IBC, the Adjudicating Authority i.e., National Company Law Tribunal (Kolkata Bench), admitted the matter on 21.10.2021. An Expression of Interest [hereinafter referred to as ‘EOI’] was floated on 25.03.2022, by the Resolution Professional as per Form G under Regulation 36(A) (1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Within the EOI, Clauses 3.3 & 4.1.1(k) prescribed a mandatory requirement of approval from the Competition Commission of India [hereinafter referred to as ‘CCI’] prior to the approval of the Resolution Plan, by the Committee of Creditors [hereinafter referred to as CoC’].
In response to the above, both INSCO (Appellant) and AGI Greenpac submitted their respective Resolution Plans in April 2022, for consideration. On 19.05.2022, a provisional list of eligible Resolution Applicants was published with both the Resolution Applicants placed at Sl. No. 6 (INSCO/Appellant) and Sl. No. 5 (AGI Greenpac/ Respondent 2), respectively.
Subsequently, in response to an e-mail by the Appellant seeking clarification with respect to the timeline for obtaining approval of CCI, the RP in an e-mail communication dated 25.08.2022, granted relaxation to Resolution Applicants, to procure CCI approval, after CoC’s approval of the Resolution Plan but prior to filing the application before NCLT.
On 27.09.2022, AGI Greenpac submitted an application with the CCI under Form I under Regulation 5(ii) of the Competition Commission of India (Procedure in Regard to Transaction of Business relating to Combination) Regulations 2011 intimating that it proposed to enter into a combination with HNGIL, by acquiring 100% of HNGIL’s shareholding and business. Supreme Court Reports [2025] 1 S.C.R. 1799
On 22.10.2022, CCI declared the application filed by AGI Greenpac as ‘not valid’. Thereafter, final Resolution Plans were submitted for consideration by the CoC. It must however be noted that at that stage, neither AGI Greenpac’s Resolution Plan had the requisite CCI approval nor did they have any pending application, seeking such approval from the CCI.
Immediately thereafter, the Appellant objected to the approval accorded to AGI Greenpac’s Resolution Plan stating that they had not obtained the requisite CCI approval at the time, when their Resolution Plan had been put to vote, which had been the condition precedent. The Appellant also pointed out that Form I submitted by AGI Greenpac with the CCI had been rejected on 22.10.2022 and that a fresh Form II had been submitted which had not yet been approved till the date of the COC approval. Further, serious contradictions between the process undertaken and the process envisaged to be undertaken by the RP in an e-mail clarification dated 25.08.2022, were also highlighted to point out that preferential treatment had been granted to AGI Greenpac despite the rejection of their Form I, by the CCI.
However, on 28.10.2022, the CoC approved the AGI Greenpac’s Resolution Plan with 98% votes, while Appellant INSCO’s Resolution Plan, received 88% votes.
Thereafter, on 03.11.2022, AGI Greenpac submitted a detailed application (Combination Registration No. C-2022/11/983) under Form II seeking approval before CCI. At the same time, the Resolution Professional filed an IA under Section 30(6) of the IBC before NCLT Kolkata, seeking approval for AGI Greenpac’s Resolution Plan while INSCO filed an IA before NCLT Kolkata challenging the approval granted to AGI Greenpac’s Resolution Plan, by the COC.
On 10.03.2023, AGI Greenpac submitted a divestment plan to CCI in respect of one of the seven HNGIL plants (situated in Uttarakhand), as part of a voluntary modification, to comply with the requirements of Competition laws. On 15.03.2023, CCI granted an approval to AGI Greenpac’s combination proposal with HNGIL (Corporate Debtor/ Target Company), subject to the compliance of certain modifications including the divestment of one of the seven HNGIL plants (Rishikesh, Uttarakhand).
Challenging the approval to HNGIL and AGI Greenpac’s Resolution Plan and seeking reconsideration of INSCO’s Resolution Plan, INSCO Independent Sugar Corporation Ltd. v. Girish Sriram Juneja & Ors. 1800 [2025] 1 S.C.R. filed an application before NCLT Kolkata. On 28.04.2023, the NCLT rejected the application, thereby upholding the approval granted to AGI Greenpac’s Resolution Plan, stating that the required CCI approval under Section 31(4) IBC had been obtained in the meantime. While challenging the NCLT rejection dated 28.04.2023, the Appellant filed the Company Appeal (AT) (Insolvency) No. 735/2023 before the NCLAT.
The NCLAT vide judgment dated 18.09.2023 upheld the approval accorded to AGI Greenpac’s Resolution Plan, stating that although the requirement of approval by the CCI was mandatory in nature, its prior approval by the CoC, was only directory. This is because the timeline for CCI to decide upon a combination proposal is much longer and should not lead to a situation where the CIRP is frozen or halted because of a pending application before the CCI.
Meanwhile, the Appellant INSCO challenged the CCI approval dated 15.03.2023 vide Competition Appeal (AT) No. 7/2023 before the NCLAT, which upheld the approval vide judgement dated 28.07.2023.
It is these above decisions of the NCLAT (dated 28.07.2023 and 18.09.2023) that have been challenged by INSCO in the lead Civil Appeal. Arguments in support of INSCO’s stand have been advanced by learned Senior Advocates Dr. A. M. Singhvi and Mr. Mahesh Jethmalani. On the other side, the Successful Resolution Applicant i.e., AGI Greenpac is represented by learned Senior Advocates Mr. Mukul Rohatgi and Mr. Parag Tripathi. The learned Solicitor General Mr. Tushar Mehta, appears for the CoC. The learned Senior Advocate Mr. P. Chidambaram appears for the Resolution Professional while the CCI is represented by learned Senior Advocate Mr. Balbir Singh. For the other parties, submissions were advanced by learned Senior Advocates Mr. Rana Mukherjee, Mr. Dushyant Dave, Mr. Amit Sibal, Mr. Dhruv Mehta, Mr. Neeraj Kishan Kaul and Mr. Rajshekhar Rao. SubMiSSionS
Dr. Abhishek Manu Singhvi, learned senior counsel for INSCO i.e., the unsuccessful Resolution Applicant. (Appellant in Civil Appeal No. 6071/2023), inter alia, made the following submissions:
18.1. According to the Appellant’s counsel, the entire process from submission of AGI Greenpac’s Resolution Plan to its approval by the CoC was riddled with irregularities and should have been nullified. Supreme Court Reports [2025] 1 S.C.R. 1801
18.2. The appellant’s counsel contends that the RP violated Section 31(4) of the IBC & its proviso, the RFRP and the RP’s own e-mail dated 25.08.2022, by submitting AGI Greenpac’s Resolution Plan to the NCLT for approval, without the required statutory approval from the CCI. This contradicts AGI Greenpac’s undertaking before the NCLT (Clause 5.5), which stated that CCI approval would be secured prior to CoC approval and submission of the plan to the NCLT.
18.3. While Section 31(4) of the IBC permits statutory approvals within one year of NCLT approval, the proviso excludes combinations under Section 5 of the Competition Act, 2002, requiring stricter compliance. This, according to Dr. Singhvi, underscores legislative intent for stringent adherence to the proviso.
18.4. It is contended that in case of non-compliance, both the CoC and RP are empowered to re-evaluate and approve any other compliant Resolution Plans. However, despite such circumstances existing here, neither the RP nor the CoC acted as needed, rendering the process invalid.
18.5. Relying on judicial precedents, the counsel emphasises that Section 31(4) of the Insolvency & Bankruptcy Code, 2016 (IBC), mandates statutory compliance before the Resolution Plan is approved by the CoC. However, the RP disregarding the law granted unwarranted relaxation to AGI Greenpac, from procuring the necessary approvals.
18.6. It is then contended that the NCLAT judgment (dated 18.09.2023) failed to observe that there is no inconsistency between the timelines given under the IBC and Competition Act, as the CCI is mandated to form a prima facie opinion on adverse effects within 30 days. In the context, it was pointed out that the IBC’s 330 days’ CIRP timeline can be extended in deserving cases.
18.7. The appellants argue that the entire framework as envisaged under Section 29(1) of the Competition Act was bypassed, as no mandatory SCN was issued to the Corporate Debtor/Target Company. Also, neither details were published nor were public objections invited by the CCI, before approving AGI Greenpac’s Combination proposal on 15.03.2023. Independent Sugar Corporation Ltd. v. Girish Sriram Juneja & Ors. 1802 [2025] 1 S.C.R.
18.8. The Competition Act, according to the appellants, allows only the CCI to propose modifications to combinations post-SCN under Section 29(1) IBC, whereas the modifications in this case were done on the basis of suggestions by AGI Greenpac, contrary to the legal provisions.
18.9. The appellant argues that without the permission of CoC as per Section 28(1) of the IBC, the RP lacked authority to divest or sell Corporate Debtor/Target Company’s assets. No such permission was sought or granted. In fact, CoC had already approved the Resolution Plan on 28.10.2022, i.e., much before AGI Greenpac proposed modifications on 10.03.2023. Consequently, the CCI granted approval based on factually incorrect and misleading data, provided by AGI Greenpac.
18.10. It is then pointed out that AGI Greenpac’s Resolution Plan pending approval before NCLT, is conditional, violating the IBC framework. The CCI’s approval on 15.03.2023 also acknowledged that even after divestment, it must be demonstrated that the same is aligned with its approval. The plan creates an unfeasible sequence, as the divestment depends on the Resolution Plan’s implementation, which itself requires prior CCI approval, leading to unfeasible complications, which should have been avoided by the NCLAT.
Appearing for the CoC, Mr. Tushar Mehta, the learned Solicitor General, inter alia, made the following submissions:
19.1. The IBC was introduced as an experiment to facilitate debt- ridden companies, to be taken over as going concerns, by avoiding liquidation. The Statement of Objects & Reasons of the IBC emphasises upon the need for a time-bound resolution process aimed at maximizing asset value. The CoC plays a pivotal role in assessing the feasibility and viability of a Resolution Plan from a commercial perspective.
19.2. According to Mr. Mehta, adherence to the IBC’s timelines is sacrosanct and must be followed. Further, it was argued that the timelines under the IBC and the Competition Act are incompatible and must be harmonised, with Section 31(4) and its proviso being interpreted appropriately. Supreme Court Reports [2025] 1 S.C.R. 1803
19.3. The interpretation suggested by INSCO, treating the proviso as ‘mandatory’ rather than ‘directory’ would undermine the IBC’s scheme. It is therefore argued that the proviso is directory, as upheld by various NCLAT judgments which have not been upset by the Supreme Court.
19.4. Mr. Mehta further contended that the Green Channel approval mechanism gave INSCO an unfair head start, disadvantaging established industry players. This, it is argued, goes against providing a level-playing field and undermining legislative intent while diminishing the competitive nature of the CIRP.
19.5. According to Mr. Mehta, after deliberating on feasibility, statutory approvals, and respective timelines, the CoC fully complied with the IBC, Competition Act, and relevant regulations, as per applicable jurisprudence.
19.6. It was further contended that the terms of CCI’s approval did not modify AGI Greenpac’s Resolution Plan, and thus, specific CoC approval was not necessary.
Mr. P. Chidambaram, learned senior counsel appearing for the Resolution Professional, argued that the RP did not contravene any provisions of law and adhered to legal position as was in force at the relevant time.
20.1. It was argued that the RP adhered to the law and followed NCLAT judgments correctly treating the proviso to Section 31(4) of the IBC, as directory.
20.2. According to Mr. Chidambaram, RP’s role is procedural, with no substantive involvement in Resolution Plans. Therefore, there is no scope for controversy regarding the RP’s role.
For the Successful Resolution Applicant i.e., AGI Greenpac Ltd., Mr. Mukul Rohatgi, learned Senior Advocate, inter alia, made the following submissions:
21.1. The counsel argued that it is already settled that the proviso to Section 31(4) of the IBC is directory in nature. The NCLAT judgments holding such a view have not been interfered by the Supreme Court, and this should be understood as the correct view, which is not upset by this Court. He further emphasised that a purposive interpretation is necessary to align the proviso with the legislative intent. Independent Sugar Corporation Ltd. v. Girish Sriram Juneja & Ors. 1804 [2025] 1 S.C.R.
21.2. Citing the amendment’s explanatory Memorandum, Mr. Rohatgi contended that the term ‘CoC’ in the proviso was a drafting error, and the intended reference was to the ‘Adjudicating Authority’. A literal interpretation, he argued, would defeat the IBC’s purpose and should be treated as a drafting oversight.
21.3. According to Mr. Rohatgi, if the proviso is interpreted as mandatory, the timelines in IBC would be unworkable and the objective of the IBC of ensuring that the stressed businesses survive as a going concern would be compromised. It was argued that the resolution applicants and stressed business cannot afford any delay and must remain bound by the timeline.
21.4. Since the legislature prescribed no consequences for non- compliance with the proviso, Mr. Rohatgi argues that the proviso should be deemed as directory.
21.5. Moreover, since there was no change in AGI Greenpac’s Resolution Plan, it was argued that Plan is not conditional. In any case, these issues should not be entertained by the Supreme Court at this premature stage, as these are pending for consideration before the NCLT.
21.6. The locus standi for Appellants as the unsuccessful resolution applicant is questioned, as they lack vested rights in the CIRP. It is also argued that the workmen and operational creditors have no standing to challenge a Resolution Plan.
21.7. Highlighting the RP’s lack of expertise in managing a glass furnace factory, Mr. Rohatgi emphasised upon the importance of concluding the CIRP swiftly to avoid jeopardising its survival.
Mr. Parag Tripathi, supplementing for AGI Greenpac, invoked the Principle of Scrivener’s Error, highlighting an inadvertent drafting error in the proviso to Section 31(4) of the IBC that rendered unclear the original legislative intent. It is therefore argued that courts can pierce through the alleged obvious error and discern the true purpose behind the enactment. DiScuSSion & analySiS Objections on Locus Standi
At the outset, the preliminary objection regarding the locus standi of the Appellant(s) to prefer the present Appeal(s) must be dealt with. Supreme Court Reports [2025] 1 S.C.R. 1805
Section 61 of the IBC provides the statutory framework for appeals against orders of the Adjudicating Authority i.e., the NCLT, stipulating that ‘any person aggrieved’ by such an order may prefer an appeal to the Appellate Authority i.e., the NCLAT in this case. Further, Section 62 extends this right of appeal to the Supreme Court.
Similarly, Section 53B of the Competition Act provides that ‘any enterprise or any person aggrieved’ within the statutory framework may file an appeal against any order of the CCI to the Appellate Tribunal i.e., the NCLAT. Section 53T further extends this right of appeal to the Supreme Court against any decision or order of the NCLAT.
Once the CIRP is initiated, the nature of proceedings are no longer in personam but rather become in rem. In light of the same, the expression ‘any person aggrieved’ in the context of the IBC has been held to be indicative of there being no rigid locus requirements to institute an appeal challenging an order of the NCLT before the NCLAT or an order of the NCLAT before this Court.1 Similarly, in the context of the Competition Act, even those persons that bring to CCI information of practices that are contrary to the provisions of the Competition Act, could be said to be ‘aggrieved’.2 Therefore, the term ‘any person aggrieved’ appearing in Section 62 of the IBC and Section 53T of the Competition Act must be understood widely and not in a restricted fashion.
In the present case, the Appellant as an unsuccessful resolution applicant whose Resolution Plan could have otherwise been approved by the CoC, satisfies the requirement of being aggrieved. This preliminary locus standi objection vis-à-vis the Appellant, therefore, does not merit acceptance. Proviso to Section 31(4) IBC
In these matters, the principal issue is whether the approval of a proposed combination by the CCI must mandatorily precede the approval of the Resolution Plan, by the CoC, as stipulated under the proviso to Section 31 (4) of IBC.
1. GLAS Trust Company LLC v. BYJU Raveendran & Ors., 2024 SCC OnLine SC 3032.
2. Samir Agrawal v. CCI & Ors., (2021) 3 SCC 136. Independent Sugar Corporation Ltd. v. Girish Sriram Juneja & Ors. 1806 [2025] 1 S.C.R.
In its impugned order dated 18.09.2023, the NCLAT concluded that while the approval of the CCI for the combination is mandatorily required in consonance with the proviso to Section 31 (4) of the IBC, the timing of such approval i.e., that it must be obtained prior to the approval of the Resolution Plan by the COC, should be construed as being ‘directory’ in nature, rather than ‘mandatory’.
A few paragraphs from the impugned NCLAT order being relevant are extracted herein below:
... ... 33. The question of obtaining approval from the CCI only arises when Resolution Plan submitted contains a combination and require approval from the CCI. After submission of Plan, the Resolution Applicant applies for approval of combination from the CCI. It is not in his hand that as to when CCI will grant the approval. The CCI has to act as per statutory provisions of the Competition Act and it has been given 210 days to take a decision. If, we hold that prior approval of the CCI is mandatory prior to the approval of Plan by the CoC, it will lead to incongruous result, the CIRP cannot be frozen or cannot be put at halt because an application is submitted before the CCI. Looking to the timeline provided in the Code and that of the Competition Act and to hold that prior approval of CCI is required prior to approval of Plan by the CoC, mandatorily will lead to adverse effect on the CIRP... ... ... ... 34. In the present case, we have noticed that RFRP provided that CCI’s approval has to be obtained prior to approval of Plan by the CoC, which RFRP was in accordance with Section 31(4). Although the RP subsequently clarified that approval can be obtained even after the approval by the CoC, which was in accordance with the prevalent legal position as settled by this Tribunal in Arcelor Mittal and other cases. We thus are of the view that Section 31, sub-section (4) proviso has to be read to mean that though the approval by the CCI is ‘mandatory’, the approval by the CCI prior to approval of CoC is ‘directory’... ...
The NCLAT, as can be seen from the above, concluded that though CCI’s approval is mandatory, obtaining ‘prior approval’, is directory. Such a conclusion was reached on the understanding that the Supreme Court Reports [2025] 1 S.C.R. 1807 Resolution Applicant does not have control over the timeline within which the CCI may render its approval or disapproval, towards the combination application. This may in turn, lead to a situation wherein the insolvency proceeding is unduly delayed because of a pending application seeking approval from the CCI. That might undermine the very objective of the Corporate Insolvency Resolution Process [hereinafter referred to as ‘CIRP’] itself. The absence of any explicit statutory consequences for non-compliance with the proviso to Section 31(4) IBC was therefore interpreted by the NCLAT as an indication that the requirement for prior approval was meant to be only directory.
The proviso to Section 31(4) of the IBC was inserted by the Insolvency and Bankruptcy Code (Amendment) Act, 2018. Post-amendment, the provision reads thus:
(4) The resolution applicant shall, pursuant to the resolution plan approved under sub-section (1), obtain the necessary approval required under any law for the time being in force within a period of one year from the date of approval of the resolution plan by the Adjudicating Authority under sub-section (1) or within such period as provided for in such law, whichever is later. Provided that where the resolution plan contains a provision for combination, as referred to in section 5 of the Competition Act, 2002, the resolution applicant shall obtain the approval of the Competition Commission of India under that Act prior to the approval of such resolution plan by the committee of creditors.
A proviso in a given statute may be introduced to serve various purposes, like qualifying or excepting certain provisions from the main enactment or insisting on certain mandatory conditions to be fulfilled in order to make the enactment workable or as an optional addenda to explain the real intendment of the statutory provision.3 Ordinarily, however, the function of a proviso is to except something out of the enactment or to qualify something enacted therein.
3. Sundaram Pillai v. V.R. Pattabiraman, (1985) 1 SCC 591. Independent Sugar Corporation Ltd. v. Girish Sriram Juneja & Ors. 1808 [2025] 1 S.C.R.
The 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. No other provision of the IBC has been pointed out that might suggest otherwise or cause disharmony between the scheme and intent of the IBC or the said proviso to Section 31(4) of the IBC.
The above provision makes it abundantly clear that the proviso herein creates an exception for those Resolution Plans that contain provisions for combination. The language used therein appears to be clear, precise & straightforward. As such, to understand the legislative intent, the Rule of Plain Reading or literal interpretation should find favour rather than the rule of purposive interpretation as is suggested by the other side. Undertaking Interpretation: Why Literal and not Purposive?
It has been strongly argued by Mr. Mukul Rohatgi, the learned counsel for AGI Greenpac, that the rule of purposive interpretation should be adopted in order to interpret the proviso to Section 31(4) of the IBC. He, in fact, suggests a departure from the principles of literal interpretation. However, the proposition of law is well-settled that when the language of the provision is clear and unambiguous, literal interpretation is the best way to understand the legislative intention behind enacting the particular provision.
On the need for literal interpretation of a statue, when the words are clear and unambiguous, Mr. Francis Bennion in his oft-quoted treatise Bennion on Statutory Interpretation stated:
Where the enactment is grammatically ambiguous, the opposing constructions put forward are likely to be alternative meanings, each of which is grammatically possible. Where on the other hand, the enactment is grammatically capable of one meaning only, the opposing constructions are likely to contrast an emphasised version of the literal meaning with a strained construction. In the Supreme Court Reports [2025] 1 S.C.R. 1809 latter case, court will tend to prefer the literal meaning, wishing to reject the idea that there is any doubt.
4
The principle of casus omissus, as articulated by this Court in Ebix Singapore (P) Ltd. v. Educomp Solutions Ltd. (CoC)5, underscoring boundaries of judicial interpretation, cautions the courts against transgressing into the legislative domain. The courts should not arrogate the legislature’s role by filling gaps in statutory text. Statutory enactments like the IBC demand strict adherence to legislative intent, guarding against procedural overreach that may upset the framework envisioned by the Parliament.
Likewise, the Supreme Court in multiple cases had underscored the rule that when the language of a statute is plain and unambiguous and reasonably susceptible to only one meaning, there cannot be a question of construction of the statute, as the provision would speak for itself.6
In an oft-quoted case on literal interpretation Kanailal Sur v. Paramnidhi Sadhu Khan, this Court stated as follows7:
If the words used are capable of one construction only then it would not be open to the courts to adopt any other hypothetical construction on the ground that such hypothetical construction is more consistent with the alleged object and policy of the act.
In fact, if the statute is plain and unambiguously-worded, the consequences of such construction no longer remain a matter for the court to decide on8, even if they appear to be strange, surprising, unreasonable, unjust or oppressive.9 Further, even hardship, inconvenience or penalty10 being the consequence of compliance with such construction cannot be deemed sufficient to alter the meaning
8. Bennion on Statutory Interpretation, 5th Edn., Francis Bennion. (2022) 2 SCC 401.
Questions this judgment answers
Which statutory provisions did this judgment involve?
Amendment Act, 2018; IBC and the Competition Act; Competition Act, 2002 — s. 5; Constitution of India; IBC and Competition Act; Representation of the People Act, 1951 — s. 123(7).
Which court decided this case, and when?
Supreme Court of India, on 29 Jan 2025. The bench was HRISHIKESH ROY, SUDHANSHU DHULIA, S V N BHATTI.
Precedent status how later indexed judgments have treated this case
No known negative treatment found in the Courts & Cases corpus.
This is a result about the indexed corpus, not a finding that the judgment remains good law. Coverage may be incomplete.