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Informist, Tuesday, May 20, 2025

 

NEW DELHI – The government aims to do away with the need for Competition Commission of India's approval for corporate insolvency resolution plans through amendments to the Insolvency and Bankruptcy Code, 2016, a senior official at the Ministry of Corporate Affairs said Tuesday. The government plans to introduce an amendment during the Monsoon Session of Parliament, the official added. The amendment will be made to Section 31(4) of the Insolvency and Bankruptcy Code, 2016.

 

Currently, under the 2016 Code, it is mandatory for a resolution applicant to get CCI's nod before the committee of creditors of debt-ridden companies can give a green signal to the plans. "Resolution is not a regular acquisition. There is no point in involving CCI in this," the official said, adding that doing away with the provision will lower the burden on India's competition watchdog. 

 

In January, the Supreme Court had rejected AGI Greenpac Ltd.'s resolution plan for Hindustan National Glass & Industries Ltd, which was admitted for insolvency in 2021. The apex court called the resolution plan "unsustainable" and ordered for reconsideration as it had not taken the requisite approval of the CCI. On Oct. 28, 2022, the committee of creditors had approved AGI Greenpac's resolution plan with 98% votes in its favour despite no prior approval from the competition watchdog.

 

Following Supreme Court's January order, AGI Greenpac and others filed a review petition in February for which the apex court is currently hearing arguments. 

 

Earlier, the top court had allowed an appeal by resolution applicant Independent Sugar Corp. Ltd., which had secured the necessary approval from the competition watchdog. Independent Sugar's resolution plan had received only 88?vourable votes from the committee of creditors.  End

 

Reported by Priyasmita Dutta

With Inputs from Surya Tripathi

Edited by Subhojit Sarkar

 

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