Historical Evolution Of CCI Approval Requirements Under The IBC: From Legislative Silence To Statutory Mandate

Full Text Link

Risha Yadav, Amity Law School, Noida

ABSTRACT

This chapter traces the regulatory evolution of Competition Commission of India (CCI) prior approval requirements within India's Corporate Insolvency Resolution Process (CIRP), spanning the enactment of the Insolvency and Bankruptcy Code, 2016 through the Supreme Court's judgment in Independent Sugar Corporation Ltd. v. Girish Sriram Juneja in January 2025. The IBC's initial silence on the sequencing of CCI approval created substantial uncertainty for resolution applicants and insolvency professionals working within the Code's compressed timelines. The Insolvency and Bankruptcy Code (Second Amendment) Act, 2018 addressed this gap by inserting a proviso to Section 31(4) of the Code, mandating that CCI clearance be obtained before the Committee of Creditors votes on any resolution plan involving a qualifying combination. Despite the apparent clarity of that text, the NCLT and NCLAT consistently treated the requirement as directory rather than mandatory, permitting post-CoC but pre-NCLT approval in the interest of CIRP expediency. The chapter examines tribunal-level reasoning in ArcelorMittal India Pvt. Ltd. v. Abhijeet Guhathakurta and Makalu Trading v. Rajiv Chakraborty, assesses how the Competition (Amendment) Act, 2023 altered the regulatory landscape, and analyses the Supreme Court's majority and dissenting opinions in Independent Sugar. The Court ultimately settled the controversy by affirming the proviso's mandatory character, relying in part on the CCI's empirical record of processing combination applications within sixteen to thirty working days. The chapter situates this jurisprudential history within the broader structural challenge of coordinating India's insolvency and competition law regimes and reflects on the systemic costs of legislative silence at the intersection of two major economic regulatory frameworks.

Keywords: Insolvency and Bankruptcy Code; Competition Commission of India; Section 31(4); mandatory versus directory; CIRP; combinations; Independent Sugar

524. HISTORICAL EVOLUTION OF CCI APPROVAL REQUIREMENTS UNDER THE IBC- FROM LEGISLATIVE SIL

Download HISTORICAL EVOLUTION OF CCI APPROVAL REQUIREMENTS UNDER THE IBC- FROM LEGISLATIVE SIL • 315KB