CCI Approval Must Come Before the CoC Votes: What Lenders and Resolution Applicants Need to Know

A Question That Had Divided Tribunals

When a resolution applicant submits a plan to acquire a distressed company through the IBC process, that acquisition: if it meets the prescribed thresholds: requires approval from the Competition Commission of India under the Competition Act. The question that had bedevilled practitioners for years was a simple one of sequence: does the CCI approval need to come before the Committee of Creditors votes on the plan, or can the CoC vote first on a plan that is conditional upon subsequent CCI clearance?

The practical stakes were significant. CCI approval processes can take months. Requiring approval before the CoC vote would extend timelines and add uncertainty to what is already a compressed CIRP process. Allowing a conditional vote seemed more pragmatic. But it also raised a real concern: what if the CoC endorsed a plan, the NCLT approved it, the corporate debtor was essentially handed over to the resolution applicant: and the CCI then refused approval, or approved it only with conditions that materially altered the commercial basis of the plan?

NCLAT had taken the view that CCI approval could come after the CoC's vote but before the NCLT's final order. The Supreme Court, in a 2:1 majority in Independent Sugar Corporation Ltd. v. Girish Sriram Juneja (2025 INSC 124, January 29, 2025), disagreed: and did so emphatically.

What the Majority Held

The majority opinion held that CCI approval is a mandatory pre-condition that must be obtained before the Committee of Creditors votes on a resolution plan. The reasoning operates on two levels: textual and purposive.

On the text, the court looked at Section 31 of the IBC, which requires a resolution plan to comply with all applicable laws before the NCLT can approve it. The Competition Act and the combination regulations under it are applicable laws. A resolution plan that involves an acquisition triggering CCI approval thresholds is, until CCI clearance is obtained, a plan that does not comply with all applicable laws. The CoC cannot meaningfully vote on a plan that is legally incomplete.

On purpose, the majority noted that the CoC's role is to assess the commercial viability and merit of a resolution plan. That assessment is necessarily incomplete if the plan is subject to material conditions: including conditions that a regulator has not yet had the opportunity to impose. CCI approval may come with structural remedies: divestitures, behavioural undertakings, access commitments. These remedies can fundamentally change the economics of the plan. A CoC voting on a plan without knowing whether or what conditions the CCI will impose is voting on an incomplete picture.

"A resolution plan that has not obtained mandatory statutory approvals cannot be placed before the Committee of Creditors for voting. The CoC must evaluate a plan that is complete in law, not one that remains conditional on regulatory clearances whose terms are unknown."

The Dissent: Pragmatism Over Sequence

The dissenting judge took a more pragmatic view. IBC proceedings operate under strict timelines: 180 days, extendable to 270 days, with judicial extensions in exceptional cases. Mandatory pre-vote CCI approval adds a layer of time that the Code's framers may not have contemplated. The CIRP process could become unworkable for large transactions if resolution applicants must obtain CCI clearance before even knowing whether the CoC will accept their plan: a clearance process that itself requires significant time and resources.

The dissent argued for a middle path: CCI approval should be sought as early as possible in the process, and the NCLT should ensure it is obtained before final approval, but the CoC vote should not be blocked pending that approval. This view, while not the law, reflects concerns that will continue to shape how practitioners advise clients navigating large CIRP transactions.

Why This Matters: The Practical Consequences

For Resolution Applicants

If you are bidding for a distressed asset through the IBC process and your proposed acquisition meets or approaches CCI notification thresholds, you must now factor CCI approval timelines into your plan submission timeline. Submitting a resolution plan without CCI approval: or without a clear plan for obtaining it before the CoC vote: risks your plan being disqualified as non-compliant.

This means earlier engagement with competition counsel, earlier preparation of the notification filing, and an honest assessment of whether the transaction is likely to face CCI scrutiny. It also means that resolution applicants should, where possible, complete the CCI filing concurrently with plan preparation: not as an afterthought after the plan is submitted.

For Lenders and the Committee of Creditors

For lenders sitting on a CoC, this decision changes the compliance checklist that must be satisfied before any plan is put to a vote. Resolution professionals and their legal advisers will need to build CCI approval status into the timeline management of every CIRP process involving a potential change of control. A vote conducted without CCI approval where approval was required would likely be vulnerable to challenge at the NCLT approval stage.

For the CIRP Timeline

The most significant practical consequence is time. The CCI's standard timeline for combination approvals is 30 working days (Phase I), with the possibility of extension to 210 working days (Phase II) for more complex matters. In a CIRP process already under time pressure, adding a mandatory Phase I (and potentially Phase II) review before the CoC can vote will require NCLT to grant extensions more readily in large transactions. The NCLT and NCLAT will need to develop a coherent approach to timeline management in this new environment.

The Interaction With the CIRP Timeline: What Needs to Change

The judgment implicitly requires a rethinking of how CIRP processes are conducted in large transactions. The invitation for expression of interest, the request for resolution plans, and the evaluation process must now build in a CCI notification and approval window. This may mean that the period for submission of resolution plans needs to be set earlier in the CIRP timeline, to allow sufficient time for CCI review before the CoC meeting is convened for voting.

Resolution professionals will need to assess CCI implications at the expression of interest stage: identifying whether the combination regulations are likely to apply based on the asset's turnover and value, and communicating this clearly to prospective resolution applicants so they can plan their CCI filing accordingly.