HNGIL’s Insolvency Fiasco: Collectors and determination skilled dysfunction in company insolvency decision course of

Temporary Information

The evolving interface between competitors regulation and insolvency regulation has given rise to a fancy set of questions relating to regulatory sequencing, statutory harmonisation, and market oversight. The Committee of Collectors (CoC), below the Insolvency and Chapter Code, 2016, is entrusted with the accountability of reorganisation and determination of a debt-ridden company physique. 

The IBC, in its most ultimate kind, follows the democratic course of to undertake a decision plan for its debtor. A very contested problem has been the procedural placement of Competitors Fee of India (CCI) approval in relation to the Committee of Collectors’ (CoC) vote below the Insolvency and Chapter Code, 2016 (IBC).

The Supreme Courtroom’s determination in Unbiased Sugar Company Ltd. v. Girish Sriram Juneja & Ors. (2025 INSC 124) decisively settles this interpretive deadlock, holding that in decision plans involving mixtures, the requisite CCI approval should mandatorily precede CoC approval, as per the proviso to Part 31(4) of the IBC. 

A abstract of key procedural occasions is offered under:

The problem was whether or not CCI’s approval for a proposed mixture below a decision plan should mandatorily precede the approval of the decision plan by CoC, as envisaged below the proviso to Part 31(4) of the IBC.

Supreme Courtroom Judgement

Delivering the bulk judgment, the Supreme Courtroom (coram: HMJ Hrishikesh Roy and HMJ Sudhanshu Dhulia) undertook a textual, contextual, and purposive interpretation of the proviso to Part 31(4) the Code. On the coronary heart of the Courtroom’s reasoning was the statutory language of the proviso, which mandates that the place a decision plan incorporates a proposal for a mix, the requisite approval below the Competitors Act, 2002 have to be obtained “previous to the approval of such decision plan by the CoC”.

The Courtroom held that allowing CoC approval over a plan that was later amended to deal with competitors issues undermined the integrity of the CoC’s decision-making and eroded the “finality” central to the IBC framework (Ebix Singapore Pvt. Ltd. v. CoC of Educomp Options Ltd., (2022) 2 SCC 401).

The Courtroom additionally took notice of procedural lapses within the CCI’s dealing with of the matter, particularly the issuance of a Present Trigger Discover below Part 29(1) of the Competitors Act to the acquirer alone. Decoding the time period “events” within the plural, the Courtroom held that each the acquirer and the goal are integral to the aggressive evaluation of a mix, and failure to problem notices to each vitiates due course of.

Lastly, the Courtroom voiced systemic issues over the rising pattern of conditional approvals granted by the CCI. It flagged the absence of strong monitoring and enforcement mechanisms to make sure that such treatments, like divestitures, are meaningfully applied. Within the insolvency context, the place finality and certainty are paramount, reliance on future compliance creates a regulatory vacuum which will allow anti-competitive conduct.

Following which, the AGI Greenpac sought a assessment of the judgement which was dismissed by the Hon’ble Supreme Courtroom in Could 2025.

Submit-SC Judgment

The CIRP of HNGIL has degenerated right into a cautionary story of procedural sleights and regulatory escapism, with RP and CoC having constantly betrayed the very tenets of the Code. Their conduct, amplified by systemic apathy and authorized subterfuge, has turned what ought to have been a swift and equitable course of right into a morass of illegality and delay.

Quickly after the highest court docket’s judgement, the CoC clumsily pivoted to contemplate INSCO’s plan—at the same time as critical questions haunted the legality of INSCO’s inexperienced channel clearance, granted through a unilateral submitting that flagrantly violated Regulation 5A’s joint-filing requirement. But, the RP and CoC stubbornly superior the method as if the regulation had been elective.

Solely following a mandamus-level writ from AGI Greenpac did the Delhi Excessive Courtroom step in, demanding that the CCI resolve the irregularities inside a good timeframe. Nonetheless, the RP and CoC seem content material to trip the disarray, exhibiting neither urgency nor constancy to truthful course of. 

One of many gravest costs in opposition to the RP is his penchant for false certifications. Twice over, he issued Kind-H certificates: first, in favour of AGI Greenpac and later, for INSCO, misrepresenting that the decision plans had been unconditional and compliant, when in actual fact they had been riddled with statutory infirmities. 

Much more damning is the truth that Juneja continued to behave as RP regardless of the suspension of his Authorisation for Task (AFA) by the IBBI from 28 January 2025. Each step he took thereafter—whether or not in court docket filings or CoC proceedings—was with out authorized authority. Worse nonetheless, he did not disclose this suspension to the Supreme Courtroom, thereby deceptive the very best judicial discussion board within the nation. Such conduct doesn’t merely erode belief; it quantities to contempt for institutional integrity.

The RP’s dealing with of HNGIL’s funds raises equally disturbing questions. Over ₹300 crore from firm reserves was idled in a State Financial institution of India account with out incomes curiosity, instantly bleeding worth from the company debtor. Closure of 5 furnaces throughout the CIRP interval, and that too regardless of having a Rs 600 crore financial institution steadiness is a matter that wants additional investigation. 

INSCO, projected because the ‘profitable’ decision applicant for HNGIL, has itself raised the alarm in opposition to Unique Capital (a minority CoC member), accusing it of sabotage. However the bigger scandal lies not in these internecine squabbles however within the CoC’s and RP’s conduct. Their willingness to first push by AGI Greenpac’s faulty plan with out CCI clearance after which to hurriedly again INSCO regardless of obtrusive procedural irregularities exposes a sample: the CoC and RP usually are not guardians of due course of however keen collaborators in bending the Code. 

The Nationwide Firm Regulation Tribunal (NCLT) has permitted INSCO’s decision plan for HNGIL, presenting it because the long-awaited finish to this bruising CIRP. But, the approval itself rests on shaky floor. Part 30(2)(e) of the Insolvency and Chapter Code explicitly bars approval of any plan that contravenes provisions of regulation. INSCO’s so-called ‘inexperienced channel’ clearance—a unilateral submitting that violated the obligatory joint-filing requirement below the Competitors Act—renders its plan non-compliant from the outset. As a substitute of implementing the Code, the RP facilitated this breach, and the CoC blessed it, proving as soon as once more that expediency and collusion trumped legality. The NCLT’s rubber stamp could present the optics of closure, however it can’t launder a plan that stands in direct contravention of Part 30(2).