HNGIL’s Insolvency Fiasco: The Dysfunction of the CoC and the RP in the HNGILCIRP

Brief Facts

The evolving interface between competition law and insolvency regulation has given rise to a complex set of questions regarding regulatory sequencing, statutory harmonisation, and market oversight.  The Committee of Creditors (CoC), under the Insolvency and Bankruptcy Code, 2016 (“IBC”/ “the Code”), are entrusted with the responsibility of reorganisation and resolution of a debt-ridden corporate body.  The IBC, in its most ideal form, follows the democratic process to adopt a resolution plan for its debtor. A particularly contested issue has been the procedural placement of Competition Commission of India (CCI) approval in relation to the Committee of Creditors’ (CoC) vote under the Insolvency and Bankruptcy Code, 2016 (IBC). The Supreme Court’s decision in Independent Sugar Corporation Ltd. v. Girish Sriram Juneja & Ors. (2025 INSC 124) decisively settles this interpretive impasse, holding that in resolution plans involving combinations, the requisite CCI approval must mandatorily precede CoC approval, as per the proviso to Section 31(4) of the IBC. 

A summary of key procedural events is presented below:

The issue was whether CCI’s approval for a proposed combination under a resolution plan must mandatorily precede the approval of the resolution plan by CoC, as envisaged under the proviso to Section 31(4) of the IBC?

SC Judgment

Delivering the majority judgment, the Supreme Court (coram: HMJ Hrishikesh Roy and HMJ Sudhanshu Dhulia) undertook a textual, contextual, and purposive interpretation of the proviso to Section 31(4) the Code. At the heart of the Court’s reasoning was the statutory language of the proviso, which mandates that where a resolution plan contains a proposal for a combination, the requisite approval under the Competition Act, 2002 must be obtained “prior to the approval of such resolution plan by the CoC.”

The Court held that permitting CoC approval over a plan that was later amended to address competition concerns 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 Solutions Ltd., (2022) 2 SCC 401).

The Court also took note of procedural lapses in the CCI’s handling of the matter, especially the issuance of a Show Cause Notice under Section 29(1) of the Competition Act to the acquirer alone. Interpreting the term “parties” in the plural, the Court held that both the acquirer and the target are integral to the competitive assessment of a combination, and failure to issue notices to both vitiates due process.

Finally, the Court voiced systemic concerns over the growing trend of conditional approvals granted by the CCI. It flagged the absence of robust monitoring and enforcement mechanisms to ensure that such remedies, like divestitures, are meaningfully implemented. In the insolvency context, where finality and certainty are paramount, reliance on future compliance creates a regulatory vacuum that may enable anti-competitive conduct.

Following which, the AGI Greenpac sought Review of the judgment which was dismissed by the Hon’ble Supreme Court in May, 2025.

Post-SC Judgment

The CIRP of HNGIL has degenerated into a cautionary tale of procedural sleights and regulatory escapism -RP and CoC who have consistently betrayed the very tenets of the Code. Their conduct, amplified by systemic apathy and legal subterfuge, has turned what should have been a swift and equitable process into a morass of illegality and delay.

Soon after the SC judgment, the CoC clumsily pivoted to consider INSCO’s plan—even as serious questions haunted the legality of INSCO’s green channel clearance, granted via a unilateral filing that flagrantly violated Regulation 5A’s joint-filing requirement. Yet, the RP and CoC stubbornly advanced the process as though the law were optional.

Only following a mandamus-level writ from AGI Greenpac did the Delhi High Court step in, demanding that the CCI resolve the irregularities within a tight time frame. Still, the RP and CoC appear content to ride the disarray, exhibiting neither urgency nor fidelity to fair process. 

One of the gravest charges against the RP is his penchant for false certifications. Twice over, he issued Form-H certificates: first, in favour of AGI Greenpac and later, for INSCO, misrepresenting that the resolution plans were unconditional and compliant, when in fact they were riddled with statutory infirmities. 

Even more damning is the fact that Juneja continued to act as RP despite the suspension of his Authorisation for Assignment (AFA) by the IBBI from 28 January 2025. Every step he took thereafter—whether in court filings or CoC proceedings—was without legal authority. Worse still, he failed to disclose this suspension to the Supreme Court, thereby misleading the highest judicial forum in the country. Such conduct does not merely erode trust; it amounts to contempt for institutional integrity.

The RP’s handling of HNGIL’s finances raises equally disturbing questions. Over ₹300 crore from company reserves was idled in a State Bank of India account without earning interest, directly bleeding value from the corporate debtor. Closure of 5 furnacesduring CIRP period and that too inspite of having 600crore Bank balance is an issue that need further investigation. 

INSCO, projected as the ‘successful’ resolution applicant for HNGIL, has itself raised the alarm against Exclusive Capital (a minority CoC member), accusing it of sabotage. But the larger scandal lies not in these internecine squabbles, but in the CoC’s and RP’s conduct. Their willingness to first push through AGI Greenpac’s defective plan without CCI clearance, and then to hurriedly back INSCO despite glaring procedural irregularities, exposes a pattern: the CoC and RP are not guardians of due process, but willing collaborators in bending the Code. 

National Company Law Tribunal (NCLT) has approved INSCO’s resolution plan for HNGIL, presenting it as the long-awaited end to this bruising CIRP. Yet, the approval itself rests on shaky ground. Section 30(2)(e) of the Insolvency and Bankruptcy Code explicitly bars approval of any plan that contravenes provisions of law. INSCO’s so-called ‘green channel’ clearance—a unilateral filing that violated the mandatory joint-filing requirement under the Competition Act—renders its plan non-compliant from the outset. Instead of enforcing the Code, the RP facilitated this breach and the CoC blessed it, proving once again that expediency and collusion trumped legality. The NCLT’s rubber stamp may provide the optics of closure, but it cannot launder a plan that stands in direct contravention of Section 30(2).