Competition Act Approval for Resolution Plans
For the exam, CCI approval comes before the CoC vote. From May 2026, before the NCLT filing.
When a resolution applicant buys a corporate debtor, the deal can be a "combination" under section 5 of the Competition Act, 2002: an acquisition, merger or amalgamation large enough to need the Competition Commission of India's approval. The Code deals with this in one proviso, to section 31(4), and that proviso decides when in the CIRP the CCI's approval must be in hand.
The Competition Act is not one of the Acts listed in IBBI's syllabus. It reaches the Limited Insolvency Examination through section 31(4) of the Code and the case law on it. The exam tests the law as at 4 February 2025, and the timing rule has changed since.
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The Timing Rule: Then and Now
Text of the proviso to section 31(4)
Exam version (law at 4 February 2025)
CCI approval "prior to the approval of such resolution plan by the committee of creditors"
Current law (from 26 May 2026)
CCI approval "before the resolution plan is submitted to the Adjudicating Authority under sub-section (6) of section 30"
Order of steps
Exam version (law at 4 February 2025)
CCI approves, then the CoC votes
Current law (from 26 May 2026)
CoC may vote first; CCI approval must come before the RP files the plan with the NCLT
Authority
Exam version (law at 4 February 2025)
Independent Sugar Corporation v. Girish Sriram Juneja (Supreme Court, 29 January 2025)
Current law (from 26 May 2026)
IBC (Amendment) Act, 2026, section 19(d)
| Exam version (law at 4 February 2025) | Current law (from 26 May 2026) | |
|---|---|---|
| Text of the proviso to section 31(4) | CCI approval "prior to the approval of such resolution plan by the committee of creditors" | CCI approval "before the resolution plan is submitted to the Adjudicating Authority under sub-section (6) of section 30" |
| Order of steps | CCI approves, then the CoC votes | CoC may vote first; CCI approval must come before the RP files the plan with the NCLT |
| Authority | Independent Sugar Corporation v. Girish Sriram Juneja (Supreme Court, 29 January 2025) | IBC (Amendment) Act, 2026, section 19(d) |
Independent Sugar Corporation (2025)
Hindustan National Glass and Industries, India's largest glass-packaging maker, went into CIRP in 2021. The RP's invitation for expressions of interest required CCI approval before CoC approval, but the RP later told applicants they could obtain it after the CoC vote and before the NCLT filing. When final plans went to the CoC, AGI Greenpac, the second-largest player in the same market, had neither CCI approval nor a pending valid application, and the CoC approved its plan. A rival applicant, Independent Sugar Corporation, challenged the approval.
By a 2:1 majority, the Supreme Court held the proviso mandatory, not directory: for a plan containing a combination, CCI approval must be obtained first, and the CoC may examine and approve the plan only after the CCI's decision. A relaxation granted by the RP could not override the statute.
Cut-off Trap: Which Answer the Exam Wants
The Supreme Court decided Independent Sugar on 29 January 2025, before the exam's cut-off, and the 2026 amendment came after it. For the exam, CCI approval comes before CoC approval and missing it is fatal. In live practice from 26 May 2026, the CoC may approve first, as long as CCI approval is in hand before the plan is filed with the NCLT.
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What the RP Checks When a Plan Contains a Combination
- 1
Flag it early
Ask applicants to state whether the plan is a combination under section 5 of the Competition Act. Regulation 38 of the CIRP Regulations already requires a plan to set out the approvals it needs and their timeline.
- 2
Track the CCI filing
Record whether a valid notice has been filed with the CCI and its status. In Independent Sugar, a notice the CCI had declared not valid did not count as a pending application.
- 3
Sequence the vote
On the exam's law, put the plan to the CoC vote only after CCI approval. Under current law, the vote may come first, but the section 30(6) filing must wait for the approval.
- 4
Other approvals
Any other approval needed under law must be obtained within one year of NCLT approval of the plan, or within the period that law provides, whichever is later (section 31(4)).
Competition Act Points Worth Knowing
- check_circleSection 5 sets the asset and turnover thresholds that make a deal a combination. The Competition (Amendment) Act, 2023 added a deal-value test: a transaction above ₹2,000 crore where the target has substantial business operations in India. This test, pre-consummation notice and the 150-day deemed approval below came into force on 10 September 2024 (S.O. 3846(E)), so they are part of the exam's law.
- check_circleAs amended in 2023, section 6(2) requires notice to the CCI before the combination is consummated.
- check_circleUnder the 2023 amendment, a combination is deemed approved if the CCI passes no order within 150 days of the notice.
- check_circleSection 31(4) of the Code covers every other regulatory approval, such as sectoral licences: one year from NCLT approval, or longer if the other law allows.
How the Limited Insolvency Examination Tests This
A CIRP case study might describe a steel company in CIRP, two applicants, and a winning applicant that already holds 40% of the same market. The questions ask at what stage CCI approval was needed, whether the CoC's 70% vote is valid if CCI approval came a week later, and what the NCLT should do. On the exam's law, the vote was premature.
The trap is section 31(4)'s one-year window. That window is for approvals in general, after NCLT approval. Competition approval is the exception the proviso pulls forward.
FAQs
Is CCI approval mandatory before CoC approval of a resolution plan?expand_more
On the law at the exam's cut-off, yes: the Supreme Court held the proviso to section 31(4) mandatory in Independent Sugar Corporation (2025). From 26 May 2026, the amended proviso requires CCI approval only before the plan is submitted to the NCLT under section 30(6).
What is the time limit for other approvals after a resolution plan is approved?expand_more
One year from the NCLT's approval of the plan, or the period provided in the law concerned, whichever is later, under section 31(4) of the Code.
Is the Competition Act in the IBBI exam syllabus?expand_more
Not as a listed Act. It is tested through the proviso to section 31(4) of the Code and the related judgments.
Next steps
- Resolution Planarrow_forward
- IBC Amendment 2026arrow_forward
- SEBI & FEMAarrow_forward
- Committee of Creditorsarrow_forward
65 questions, case-study format, negative marking.