HNGIL’s bankruptcy failure: company bankruptcy resolution process

Short facts

The evolving interface between competition law and bankruptcy regulations has caused a complex series of issues regarding regulatory sequencing, statutory coordination and market supervision. Under the Bankruptcy and Bankruptcy Act (2016), the Creditors Commission (COC) is responsible for restructuring and resolving debt-ridden corporate institutions.

IBC follows the democratic process in its most ideal form, adopting resolution plans for its debtors. A particularly controversial issue is the approval of the Procedural Placement (CCI) approved by the Competition Commission of India (CCI).

Supreme Court’s ruling in Independence Sugar Corporation Ltd. v. Girish Sriram Juneja & Ors. (2025 INSC 124) resolved this explanatory deadlock decisively, believing that in the resolution plan involving the combination, necessary CCI approval must be carried out prior to COC approval under the provisions of Article 31 (4).

The following is a summary of key program events:

The question is whether the CCI must request a proposed combination before the COC approves the COC’s approved resolution plan.

Supreme Court Judgment

The Supreme Court (Coram: HMJ Hrishikesh Roy and HMJ Sudhanshu Dhulia) made a majority judgment, textual, contextual and purposeful interpretation of Proviso for the provisions of Article 31 (4). At the heart of court reasoning is the legal language of Proviso, which stipulates that if the resolution plan contains proposals for merger, it must be “required to obtain the necessary approval of the Competition Act 2002 before the COC approves the solution plan”.

The court ruled that the COC was allowed to approve a plan that later modified the competition issue, undermined the integrity of COC decision-making and eroded the “finality” of the IBC Framework Center (Ebix SingaporePvt. Ltd.v. Cocof Educomppomp Solutions of Educomp Solutions ltd., (2022) 2 SCC 401).

The Court also noted the procedural errors in the handling of the matter by CCI, in particular the performance reasons notice issued under Article 29, paragraph (1) of the Competition Act, which was only issued to the acquirer. The court interpreted the term “party” in the plural, ruling that the acquirer and the target are integral to the competition assessment of the combination and failed to issue notice to both diseases.

Finally, the court expressed systematic concern about the growing trend of conditional approvals granted by CCI. It marks the absence of a strong monitoring and execution mechanism to ensure meaningful implementation of such remedies. In a bankruptcy environment, finality and certainty are crucial, and the reliance on future compliance creates a regulatory vacuum that can achieve anti-competitive behavior.

AGI Greenpac then sought review of the judgment rejected by the Supreme Court in May 2025.

Post-SC judgment

Hngil’s CIRP has degenerated into a cautionary tale of procedural investigation and regulatory escapism, with RP and COC consistently betraying the principles of the regulation. Their behavior is amplified by systematic indifference and legal misunderstandings, and has turned what should have been a swift and fair process into a swamp of illegality and delay.

Shortly after the Supreme Court’s judgment, the COC clumsyly considered the INSCO’s plan, even serious issues, plagued the legality of INSCO’s green channel clearance, granted through a unilateral application, which blatantly violated the joint submission requirement under Section 5A. However, RP and COC stubbornly propose the process as if the law is optional.

Only after the Mandamus-class writ from Agi Greenpac did the Delhi High Court intervene to demand that the CCI resolve irregular behavior within a pressing time frame. Nevertheless, RP and COC seem content with confusion, showing neither urgency nor loyalty to the fair process.

One of the most serious allegations against RP is his preference for false certification. He issued a certificate for Form H twice: First, in favor of Agi Greenpac, and later on the release of Insco, misrepresenting that the solution plan was unconditional and compliant when in fact they were masked by the statutory prevalence.

What’s even more annoying is that Juneja continues to serve as RP despite IBBI’s suspension of his authorization (AFA) from January 28, 2025. Worse, he misled the country’s highest judicial forum by failing to disclose the suspension to the Supreme Court. This behavior not only erodes trust; it is a contempt for institutional integrity.

RP raises equally disturbing questions about Hngil’s financial handling. The 3 billion rupees from the company’s reserves are more than 3 billion rupees, idle in Indian national bank accounts without earning interest, spilling value directly from the company’s debtors. Five furnaces were shut down during the CIRP and, despite having a bank balance of Rs 6 billion, further investigation is needed.

INSCO is predicted as an applicant for HNGIL’s “successful” solution, which itself raises alerts against exclusive capital (a minority of COC members) accusing it of destructiveness. However, the larger scandal is not these internal quarrels, but in the actions of COC and RP. They were willing to push AGI GreenPac’s flawed plan first without CCI permission, and then hurried back to INSCO despite the obvious differences in program irregularities: COC and RP are not guardians of appropriate programs, but are willing to collaborators to bend the code.

The National Corporate Law Tribunal (NCLT) approved INSCO’s plan to resolve the HNGIL as the end of this long-awaited bruising CIRP. However, the approval itself depends on the shaky ground. Section 30(2)(e) of the Bankruptcy and Insolvency Act expressly prohibits the approval of any plan that violates the provisions of the law. INSCO’s so-called “green channel” license (a breach of mandatory joint requirements under the Competition Act) was not in line with the plan from the outset. Rather than enforcing the code, RP facilitated this violation, and COC blessed it, proving once again that stopgap and collusion outweighed legitimacy. NCLT’s rubber stamp can provide closed optics, but it cannot directly violate the plan in Section 30(2).