CCI Approval Sequencing in IBC Resolution Plans: Supreme Court Ruling and the 2026 Amendment That Reversed It

The intersection of competition law and insolvency law in India has been a source of persistent uncertainty for resolution applicants, creditors, and regulators. At the heart of the debate lies a deceptively simple question: when must the Competition Commission of India (CCI) approve a resolution plan that involves a combination, such as a merger or acquisition? The Supreme Court answered this question with a strict interpretation, only for Parliament to legislate a different answer months later.

The Statutory Framework: Section 31(4) of the IBC

Section 31(4) of the Insolvency and Bankruptcy Code, 2016 (IBC) contains a proviso addressing resolution plans that involve combinations within the meaning of Section 5 of the Competition Act, 2002. In its pre-amendment form, the proviso required that such combinations obtain CCI approval "prior to" the approval of the resolution plan by the Committee of Creditors (CoC). The legislative intent, according to the Supreme Court, was to ensure that antitrust scrutiny occurs before creditors cast their commercial vote on a plan.

The Supreme Court's Interpretation

In a landmark judgment delivered by a bench comprising Justices Hrishikesh Roy and Sudhanshu Dhulia (with a 2:1 majority), the Supreme Court held that the words "prior to" in the proviso to Section 31(4) must be read literally. CCI approval for any resolution plan involving a combination must be secured before the CoC votes on the plan.

In practice, this ruling created a sequential compliance requirement: a resolution applicant submitting a plan involving a merger or acquisition had to first approach the CCI, obtain clearance (which itself can take 150 to 210 days under the green channel or Phase I/Phase II review), and only then place the approved plan before the CoC for its vote under Section 30(4) of the IBC.

The Court also clarified that a resolution applicant may file a CCI application as early as the Expression of Interest (EoI) stage, providing some flexibility in timing without compromising the sequential requirement.

Rationale Behind the Ruling

The majority opinion reasoned that requiring ex-ante CCI clearance serves a protective function. If the CoC were to approve a plan first, stakeholders would develop commercial expectations and commitments around the plan. A subsequent CCI rejection would then unravel those commitments, causing delay and uncertainty in the Corporate Insolvency Resolution Process (CIRP). The Court held that the legislative design favoured front-loading the antitrust review to avoid this outcome.

The IBC Amendment Act, 2026: A Legislative Override

Parliament responded to the practical difficulties created by the sequential requirement through the Insolvency and Bankruptcy Code (Amendment) Act, 2026, which received Presidential assent and came into force on May 26, 2026. The Amendment directly altered the proviso that the Supreme Court had interpreted.

Under the amended proviso, CCI approval for a resolution plan involving a combination may now be obtained after the CoC approves the plan, provided that such approval is secured before the resolution plan is filed before the Adjudicating Authority (the National Company Law Tribunal) for approval under Section 30(6).

Key Changes Introduced

• Revised sequencing: CCI approval is no longer required before the CoC vote. It must be obtained after CoC approval but before the plan reaches the NCLT for final adjudication.

• Phased approval mechanism: The Amendment restructured Section 31 to allow the Adjudicating Authority to first approve the resolution plan and subsequently approve the manner of distribution of assets within 30 days, on application by the Resolution Professional with CoC approval (66% voting share).

• Timeline discipline: The Adjudicating Authority must approve or reject the resolution plan within 30 days from receipt of the application. If no order is passed within this period, the Authority must record reasons for delay.

• Retrospective application: Sections 31(5) and 31(6) are deemed to apply to resolution plans approved from May 28, 2016 (the date of commencement of the Code), except for matters that have attained finality.

Practical Implications for Stakeholders

For Resolution Applicants

The amended framework provides greater flexibility. A resolution applicant no longer needs to incur the time and cost of obtaining CCI clearance before submitting a plan to the CoC. This is particularly significant for time-bound CIRP proceedings where the 330-day outer limit under Section 12 creates acute pressure on all participants.

For the Committee of Creditors

The CoC can now evaluate and vote on plans without waiting for CCI clearance, accelerating the commercial assessment phase. However, the CoC must remain aware that a CCI rejection after its approval could still derail the plan before it reaches the NCLT.

For Legal Advisors

In practice, legal advisors structuring resolution plans involving combinations should consider parallel-tracking the CCI filing alongside the CoC approval process. While the law no longer mandates sequential compliance, obtaining CCI clearance early reduces the risk of last-minute obstacles between CoC approval and NCLT filing.

Case Citations

• Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta, (2020) 8 SCC 531 (Supreme Court, on the commercial wisdom of the CoC and judicial review standards under IBC)

• CCI v. Steel Authority of India Ltd., (2010) 10 SCC 744 (Supreme Court, on the scope of CCI's jurisdiction and the concept of 'combination' under the Competition Act)

Sources and References

• Insolvency and Bankruptcy Code, 2016 - Section 31(4)

• Competition Act, 2002 - Sections 5 and 6

• IBC Amendment Act, 2026 - Gazette Notification

• Trilegal Analysis - Implications for Merger Control

• AZB Partners - IBC 2.0 Major Reforms

Conclusion

The journey of CCI approval sequencing in IBC resolution plans illustrates the tension between strict statutory interpretation and practical commercial reality. The Supreme Court's ruling prioritised legal certainty and antitrust protection by mandating ex-ante CCI clearance. The IBC Amendment Act, 2026, by contrast, prioritised efficiency and speed in insolvency resolution by permitting post-CoC CCI approval. For practitioners, the current position is clear: CCI approval must be in hand before the resolution plan is placed before the NCLT, but it need not precede the CoC vote. Whether this recalibration achieves the intended balance between competition oversight and insolvency resolution efficiency will depend on how the amended framework operates in practice.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Readers should consult qualified legal professionals for advice specific to their circumstances.