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of <h1>NCLAT upholds Supreme Court ruling voiding resolution plan for lacking mandatory CCI approval under insolvency rules</h1> <h3>Soneko Marketing Private Limited Versus Girish Sriram Juneja, Resolution Professional of Hindusthan National Glass & Industries Limited, The Committee of Creditors of Hindusthan National Glass & Industries Limited</h3> The NCLAT upheld the Supreme Court's decision setting aside the CoC-approved resolution plan due to the absence of requisite CCI approval, rendering the ... Approval of Resolution Plan by CoC without requisite CCI approval - return of Performance Bank Guarantees submitted has not been adjudicated upon - HELD THAT:- There is no dispute between the parties that on 28.10.2022 the CoC approved the Resolution Plan of AGI Greenpc, which decision of the CoC also found favour with the Adjudicating Authority, who on 28.04.2023 has approved the Resolution Plan. This Tribunal also on 18.09.2023 upheld the order of Adjudicating Authority dated 28.04.2023, against which Civil Appeals were filed before the Hon’ble Supreme Court - The judgment of the Hon’ble Supreme Court was delivered in the case of INDEPENDENT SUGAR CORPORATION LTD. VERSUS GIRISH SRIRAM JUNEJA & ORS. AND INDEPENDENT SUGAR CORPORATION LIMITED VERSUS COMPETITION COMMISSION OF INDIA AND OTHERS [2025 (2) TMI 19 - SUPREME COURT]. The above judgment indicates that the Resolution Plan of AGI Greenpc, which was approved on 28.10.2022 was set aside and was held unsustainable, since the prior approval of the CCI was not obtained. It was further held that any action taken pursuant to the Resolution Plan approval dated 28.10.2022 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. The Hon’ble Supreme Court itself said “While we do not intend to embark on a fact-finding expedition afresh, the prima facie inconsistencies in the submitted data ought to have been examined with greater care by the NCLAT”. The Hon’ble Supreme Court ultimately having set aside the Resolution Plan, there was no further requirement of consideration with regard to return of the PBG as contended by the Appellant. It is satisfied that the return of the PBG to the AGI Greenpc, consequent to the order of Hon’ble Supreme Court dated 29.01.2025 was consequential and cannot be faulted. The present Appeals filed by the Appellant are misconceived and deserve to be dismissed. Appeal dismissed. ISSUES: Whether the Resolution Plan approved by the Committee of Creditors (CoC) without prior Competition Commission of India (CCI) approval is sustainable under the Insolvency and Bankruptcy Code, 2016 (IBC).Whether any action taken pursuant to an unsustainable Resolution Plan stands nullified and the rights of stakeholders restored to the status quo ante.Whether the Performance Bank Guarantee (PBG) submitted by the Resolution Applicant (AGI Greenpc) after approval of the Resolution Plan should be returned following the setting aside of the Resolution Plan.Whether the Operational Creditor is entitled to intervene to prevent the return of the PBG and challenge the CoC's decision post the Supreme Court judgment.Whether the Adjudicating Authority's orders on intervention and replacement of the Resolution Professional (RP) were sustainable and based on majority opinion. RULINGS / HOLDINGS: The Resolution Plan approved by the CoC on 28.10.2022 without prior approval of the CCI is 'unsustainable' and is set aside as per the proviso to Section 31(4) of the IBC.'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.'The PBG submitted by AGI Greenpc on 31.10.2022 consequent to the approval of the Resolution Plan is 'unsustainable' and the decision of the CoC to return the PBG is in accordance with the Supreme Court's directions dated 29.01.2025.The Operational Creditor's intervention to prevent return of the PBG and to set aside CoC decisions post-Supreme Court judgment was not justified; the CoC had duly discussed and recorded reasons for returning the PBG.The Adjudicating Authority's order directing replacement of the RP was not based on a majority opinion and is 'unsustainable.' RATIONALE: The Court applied the statutory framework of the Insolvency and Bankruptcy Code, 2016, particularly Section 31(4) and its proviso mandating prior CCI approval for Resolution Plans involving combinations.The Supreme Court's majority judgment emphasized a 'literal interpretation' of the proviso to Section 31(4), holding that Resolution Plans requiring CCI approval must secure it before CoC consideration, thereby invalidating subsequent approvals lacking such approval.The nullification of the Resolution Plan and restoration of rights to status quo ante logically required returning the PBG submitted pursuant to the invalidated plan.The CoC's minutes explicitly recorded discussions on the Supreme Court judgment and the rationale for returning the PBG, negating claims of non-consideration or arbitrariness.The Court rejected attempts by the Operational Creditor to obstruct the CIRP process post-Supreme Court judgment, noting the need to comply with the apex court's directions and the inadmissibility of interventions aimed at derailing resolution.The Adjudicating Authority's split opinion on RP replacement lacked majority support, rendering the direction unsustainable under the principles governing multi-member tribunals.
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