CCI Approval and Resolution Plans under the IBC

Many resolution plans involve one company acquiring another, often a competitor. If the acquisition is large enough to be a combination under the Competition Act, it needs the approval of the Competition Commission of India. The question of when that approval must be obtained, before the creditors vote or later, has been the subject of a significant Supreme Court judgment and an amendment in 2026. This note explains the interface between insolvency and competition law.

1. Combinations under the Competition Act

• Section 5. An acquisition of control, shares, voting rights or assets, or a merger or amalgamation, is a combination if the parties cross specified thresholds of assets or turnover in India or worldwide, or, since the Competition (Amendment) Act, 2023, if the deal value exceeds 2,000 crore rupees and the target has substantial business operations in India.
• Section 6. No person may enter into a combination that causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India; notifiable combinations must be approved by the Commission before they take effect.
• Relevance to plans. A resolution plan under which a competitor or a large group acquires the corporate debtor will often be a notifiable combination.

2. The Proviso to Section 31(4)

• Text from 2018. Where the resolution plan contains a provision for combination under section 5 of the Competition Act, the resolution applicant shall obtain the approval of the Competition Commission of India prior to the approval of the plan by the committee of creditors.
• Purpose. To ensure that the committee chooses a plan that can actually be implemented, and that competition concerns are addressed before the creditors commit to a bidder.
• Practice. Bidders filed notices with the Commission, often through the green channel, under which a combination with no horizontal, vertical or complementary overlaps is deemed approved on filing; combinations with overlaps went through regular, longer review.
• The debate. Tribunals had differed on whether the word prior was mandatory or directory, since strict compliance could delay the process and force every bidder to seek approval before knowing whether it would win.

3. Independent Sugar Corporation v Girish Sriram Juneja, 2025

• Facts. In the CIRP of Hindustan National Glass and Industries, Independent Sugar Corporation and AGI Greenpac submitted plans; INSCO's combination was cleared through the green channel, while AGI's faced detailed review because of high market shares; the committee approved AGI's plan before the Commission's approval, which came later on condition that AGI divest certain assets.
• Holding. Decided on 29 January 2025 by a 2:1 majority, the Supreme Court held that the proviso to section 31(4) is mandatory: where a plan requires CCI approval, it must be obtained before the committee approves the plan.
• Standing. Unsuccessful resolution applicants and others affected may challenge the Commission's approval; the right is not confined to the parties to the combination.
• Notice to the target. The Commission must issue its show cause notice to all relevant parties, including the target corporate debtor, and its failure to notify Hindustan National Glass vitiated the approval.
• Outcome. The approval of AGI's plan was set aside, and the committee was directed to reconsider the plans that had CCI approval when it voted.

Figure 1: Holdings in Independent Sugar Corporation

4. The 2026 Amendment

Figure 2: Timing of CCI approval before and after 2026

• Change. According to published summaries of the IBC (Amendment) Act, 2026, which came into force on 26 May 2026, the proviso now requires CCI approval to be obtained before the plan is filed with the NCLT for approval, rather than before the committee's vote.
• Reason. To spare unsuccessful bidders the cost and delay of seeking approval, and to avoid the committee being unable to choose the best plan merely because its approval was pending, a difficulty highlighted by the Hindustan National Glass case.
• Remaining safeguards. The NCLT still cannot approve a plan involving a combination without the Commission's approval, and the Commission's procedure, including notice to the target, continues to apply.

5. The Approval Process

Figure 3: Steps for a plan involving a combination

• Timelines. The Competition (Amendment) Act, 2023 requires the Commission to form a prima facie opinion within thirty days and to decide within an overall period of 150 days, which is relevant to the timelines of the CIRP.
• Modifications. The Commission may approve a combination subject to modifications, such as divestment of overlapping plants, and the resolution plan must then accommodate them.
• Other approvals. Approvals under other laws, such as sectoral licences, may be obtained within one year of plan approval or the period stated in the plan (section 31(4); Topic 42)

6. Frequently Asked Questions

Must every bidder obtain CCI approval before the creditors vote?

Not after the 2026 Amendment. CCI approval must be obtained before the plan approved by the committee is filed with the NCLT, so in practice only the successful bidder needs it. Under the earlier proviso, as read in Independent Sugar Corporation (2025), it had to precede the committee's vote.

Can a losing bidder challenge the CCI's approval of the winner's combination?

Yes. The Supreme Court in Independent Sugar Corporation (2025) held that persons affected, including unsuccessful resolution applicants, have standing to challenge such approvals.

What is the green channel?

A route under the CCI's regulations for combinations with no overlaps between the parties, under which the combination is deemed approved on filing the notice, making it especially useful in insolvency where time is short.

7. Related Topics

• Topic 40: Section 30. Contents of a resolution plan.
• Topic 42: Section 31. Approval and the clean slate.
• Topic 77: Section 238. The Code and other laws.