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TMI Blog2025 (2) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... e the CIRP is initiated, the nature of proceedings are no longer in personam but rather become in rem. In light of the same, the expression 'any person aggrieved' in the context of the IBC has been held to be indicative of there being no rigid locus requirements to institute an appeal challenging an order of the NCLT before the NCLAT or an order of the NCLAT before this Court - In the present case, the Appellant as an unsuccessful resolution applicant whose Resolution Plan could have otherwise been approved by the CoC, satisfies the requirement of being aggrieved. This preliminary locus standi objection vis-à-vis the Appellant, therefore, does not merit acceptance. Proviso to Section 31(4) IBC - HELD THAT:- The introduction of a proviso, specifically addressing those Resolution Plans with provisions for combination, and the use of the term 'prior' therein, makes it starkly clear that the intent of the legislature was to create an exception. This ensures that in cases containing combination proposals, the approval of the CCI i.e., the regulatory body designated to ensure fair competition in markets and preventing anti-competitive practices, should first be obtained before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gement appears to be deliberate as the Competition Act contains both specific restrictions with respect to combinations that may lead to an Appreciable Adverse Effect on Competition (AAEC) in the relevant market as well as a detailed procedure of enquiry and scrutiny of such combinations, to prevent such AAEC. Based on the same, the CCI is empowered to either approve, reject or modify such a combination or to mould it in a manner that is in consonance with the scheme of the Competition Act. Harmony between Stipulated Timelines - HELD THAT:- In the present case, even though dilatory tactics are said to have been adopted in the submission of notice under the Combination Regulations, with Form II submitted on 03.11.2022, the combination was approved on 15.03.2023 i.e., within 132 days. The recent Competition (Amendment) Act, 2023 which reduced the timeline for approving combination proposal from 210 days to 150 days and requiring the CCI to give a prima facie opinion on the likelihood of a combination causing an Appreciable Adverse Effect on Competition (AAEC) from 30 days to 15 days, is indicative of the more realistic and shorter timelines that the CCI ordinarily requires for its a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Plans which possessed the requisite CCI approval as on 28.10.2022 i.e., the date on which the CoC voted upon the submitted Resolution Plans. As per S.V.N. Bhatti J. Since it is the commercial wisdom of the CoC that is to decide on whether or not to rehabilitate the corporate debtor by means of acceptance of a particular resolution plan, the provisions of the Code and the Regulations outline in detail the importance of setting-up of such Committee and leaving decisions to be made by the requisite majority of the members of the aforesaid Committee in its discretion. Thus, section 21(2) of the IBC mandates that the CoC shall comprise of financial creditors of the corporate debtor - The CoC consists of financial creditors who are in the business of money lending, and the commercial angle of CIRP is within the domain of the CoC. Thus, when the CoC exercises its commercial wisdom, the adjudicating authority cannot interfere on merits with the commercial decisions taken by the CoC. This Court also held that there is an intrinsic assumption that financial creditors are fully informed about the viability of the corporate debtor and the feasibility of the proposed resolution plan. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RISHIKESH ROY, SUDHANSHU DHULIA i) The AGI Greenpac's Resolution Plan is unsustainable as it failed to secure prior approval from the CCI, as mandated under the proviso to Section 31(4) of the IBC. Consequently, the approval granted by the CoC to the Resolution Plan dated 28.10.2022 without the requisite CCI approval, cannot be sustained and is hereby set aside and quashed. ii) the CoC shall reconsider the Appellant's Resolution Plan and any other Resolution Plans which possessed the requisite CCI approval as on 28.10.2022 i.e., the date on which the CoC voted upon the submitted Resolution Plans. As per S.V.N. BHATTI i) The object of IBC is to provide the institutional framework for theoretical resolution without considering liquidation as the first option. The buoyant economy needs absorption mechanisms to prevent collateral and cascading impact on the investors, depositors and financial creditors. Therefore, the idea of the IBC is to let the financial markets work. ii) The view taken by the NCLAT on the question of whether the requirement of proviso to sub-section (4) of section 31 of IBC is mandatory or directory is correct. Thus, the appeals fail. A common conclusion cound not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Adv. Mr. Parag Tripathi, Sr. Adv. Mr. Vaibhav Gaggar, Sr. Adv. Mr. Sanjeev Sharma, Adv. Mr. Akshay Nanda, Adv. Ms. Sanya Sud, AOR Ms. Vaishali Goyal, Adv. Ms. Praniti Ganjoo, Adv. Mr. Aditye Arora, Adv. Mr. Keshav Sehgal, Adv. Ms. Monika Lakhanpal Gaggar, Adv. Ms. Kokila Kumar, Adv. Mr. Anirudh Krishan Gandhi, Adv. Mr. Mohit Rai, Adv. Ms. Divya Joshi, Adv. Ms. Somya Chaturvedi, Adv. Mr. Dhruv Mehta, Adv. Mr. Utkarsh Tiwari, Adv. Ms. Anushree Poddar, Adv. Ms. Hunar Malik, Adv. For the Respondent : Mr. Balbir Singh, Sr. Adv. Mr. Rajnish Prasad, AOR Mr. Udayan Jain, Adv. Ms. Monica Benjamin, Adv. Mr. Raj Surana, Adv. Mr. Ranjan Mishra, Adv. Mr. Shyam Divan, Sr. Adv. Ms. Smriti Churiwal, AOR Mr. Vikram Wadehra, Adv. Mr. Jaiveer Kant, Adv. Ms. Meher Thapar, Adv. Mr. Mukul Rohatgi, Sr. Adv. Mr. Parag Tripathi, Sr. Adv. Mr. Vaibhav Gaggar, Sr. Adv. Mr. Sanjeev Sharma, Adv. Mr. Akshay Nanda, Adv. Ms. Sanya Sud, AOR Ms. Vaishali Goyal, Adv. Ms. Praniti Ganjoo, Adv. Mr. Aditye Arora, Adv. Mr. Keshav Sehgal, Adv. Ms. Monika Lakhanpal Gaggar, Adv. Ms. Kokila Kumar, Adv. Mr. Anirudh Krishan Gandhi, Adv. Mr. Mohit Rai, Adv. Ms. Divya Joshi, Adv. Ms. Somya Chaturvedi, Adv. Mr. Dhruv Mehta, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .................. 71 JUDGMENT Hrishikesh Roy, J. FACTUAL MATRIX 1. These are statutory appeals under Section 62 of the Insolvency and Bankruptcy Code, 2016 [hereinafter referred to as 'IBC'] against the judgement dated 18.09.2023 (impugned order) passed by the National Company Law Appellate Tribunal [hereinafter referred to as 'NCLAT'] in appeals, pertaining to the Corporate Insolvency Resolution Process of the Hindustan National Glass and Industries Ltd. [hereinafter referred to as 'HNGIL']. Additionally, there is a set of appeals arising out of the NCLAT Order dated 28.07.2023, pertaining to the approval accorded to the combination between HNGIL and AGI Greenpac. In this common judgment, the parties are identified from Civil Appeal No. 6071 of 2023. 2. One key party in this matter is HNGIL i.e., the Corporate Debtor/Target Company with a 60% market share of the glass packaging industry in India. The Resolution Professional represents them. Incorporated in 1946, HNGIL has manufacturing plants located in Bahadurgarh (Haryana), Rishra (West Bengal), Neemrana (Rajasthan), Naidupeta (Andhra Pradesh), Sinnar (Maharashtra), Puducherry and Rishikesh (Uttarakhand), catering to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Subsequently, in response to an e-mail by the Appellant seeking clarification with respect to the timeline for obtaining approval of CCI, the RP in an e-mail communication dated 25.08.2022, granted relaxation to Resolution Applicants, to procure CCI approval, after CoC's approval of the Resolution Plan but prior to filing the application before NCLT. 8. On 27.09.2022, AGI Greenpac submitted an application with the CCI under Form I under Regulation 5(ii) of the Competition Commission of India (Procedure in Regard to Transaction of Business relating to Combination) Regulations 2011 intimating that it proposed to enter into a combination with HNGIL, by acquiring 100% of HNGIL's shareholding and business. 9. On 22.10.2022, CCI declared the application filed by AGI Greenpac as 'not valid'. Thereafter, final Resolution Plans were submitted for consideration by the CoC. It must however be noted that at that stage, neither AGI Greenpac's Resolution Plan had the requisite CCI approval nor did they have any pending application, seeking such approval from the CCI. 10. Immediately thereafter, the Appellant objected to the approval accorded to AGI Greenpac's Resolution Plan stating that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AGI Greenpac's Resolution Plan, stating that although the requirement of approval by the CCI was mandatory in nature, its prior approval by the CoC, was only directory. This is because the timeline for CCI to decide upon a combination proposal is much longer and should not lead to a situation where the CIRP is frozen or halted because of a pending application before the CCI. 16. Meanwhile, the Appellant INSCO challenged the CCI approval dated 15.03.2023 vide Competition Appeal (AT) No. 7/2023 before the NCLAT, which upheld the approval vide judgement dated 28.07.2023. 17. It is these above decisions of the NCLAT (dated 28.07.2023 and 18.09.2023) that have been challenged by INSCO in the lead Civil Appeal. Arguments in support of INSCO's stand have been advanced by learned Senior Advocates Dr. A. M. Singhvi and Mr. Mahesh Jethmalani. On the other side, the Successful Resolution Applicant i.e., AGI Greenpac is represented by learned Senior Advocates Mr. Mukul Rohatgi and Mr. Parag Tripathi. The learned Solicitor General Mr. Tushar Mehta, appears for the CoC. The learned Senior Advocate Mr. P. Chidambaram appears for the Resolution Professional while the CCI is represented by learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in deserving cases. 18.7. The appellants argue that the entire framework as envisaged under Section 29(1) of the Competition Act was bypassed, as no mandatory SCN was issued to the Corporate Debtor/Target Company. Also, neither details were published nor were public objections invited by the CCI, before approving AGI Greenpac's Combination proposal on 15.03.2023. 18.8. The Competition Act, according to the appellants, allows only the CCI to propose modifications to combinations post-SCN under Section 29(1) IBC, whereas the modifications in this case were done on the basis of suggestions by AGI Greenpac, contrary to the legal provisions. 18.9. The appellant argues that without the permission of CoC as per Section 28(1) of the IBC, the RP lacked authority to divest or sell Corporate Debtor/Target Company's assets. No such permission was sought or granted. In fact, CoC had already approved the Resolution Plan on 28.10.2022, i.e., much before AGI Greenpac proposed modifications on 10.03.2023. Consequently, the CCI granted approval based on factually incorrect and misleading data, provided by AGI Greenpac. 18.10. It is then pointed out that AGI Greenpac's Resolution Plan pending appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered to legal position as was in force at the relevant time. 20.1. It was argued that the RP adhered to the law and followed NCLAT judgments correctly treating the proviso to Section 31(4) of the IBC, as directory. 20.2. According to Mr. Chidambaram, RP's role is procedural, with no substantive involvement in Resolution Plans. Therefore, there is no scope for controversy regarding the RP's role. 21. For the Successful Resolution Applicant i.e., AGI Greenpac Ltd., Mr. Mukul Rohatgi, learned Senior Advocate, inter alia, made the following submissions: 21.1. The counsel argued that it is already settled that the proviso to Section 31(4) of the IBC is directory in nature. The NCLAT judgments holding such a view have not been interfered by the Supreme Court, and this should be understood as the correct view, which is not upset by this Court. He further emphasised that a purposive interpretation is necessary to align the proviso with the legislative intent. 21.2. Citing the amendment's explanatory Memorandum, Mr. Rohatgi contended that the term 'CoC' in the proviso was a drafting error, and the intended reference was to the 'Adjudicating Authority'. A literal interpretation, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny order of the CCI to the Appellate Tribunal i.e., the NCLAT. Section 53T further extends this right of appeal to the Supreme Court against any decision or order of the NCLAT. 26. Once the CIRP is initiated, the nature of proceedings are no longer in personam but rather become in rem. In light of the same, the expression 'any person aggrieved' in the context of the IBC has been held to be indicative of there being no rigid locus requirements to institute an appeal challenging an order of the NCLT before the NCLAT or an order of the NCLAT before this Court. GLAS Trust Company LLC v. BYJU Raveendran & Ors., 2024 SCC OnLine SC 3032 Similarly, in the context of the Competition Act, even those persons that bring to CCI information of practices that are contrary to the provisions of the Competition Act, could be said to be 'aggrieved'. Samir Agrawal v. CCI & Ors., (2021) 3 SCC 136 Therefore, the term 'any person aggrieved' appearing in Section 62 of the IBC and Section 53T of the Competition Act must be understood widely and not in a restricted fashion. 27. In the present case, the Appellant as an unsuccessful resolution applicant whose Resolution Plan could have otherwise been approv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atory', the approval by the CCI prior to approval of CoC is 'directory'... ..." 31. The NCLAT, as can be seen from the above, concluded that though CCI's approval is mandatory, obtaining 'prior approval', is directory. Such a conclusion was reached on the understanding that the Resolution Applicant does not have control over the timeline within which the CCI may render its approval or disapproval, towards the combination application. This may in turn, lead to a situation wherein the insolvency proceeding is unduly delayed because of a pending application seeking approval from the CCI. That might undermine the very objective of the Corporate Insolvency Resolution Process [hereinafter referred to as 'CIRP'] itself. The absence of any explicit statutory consequences for non-compliance with the proviso to Section 31(4) IBC was therefore interpreted by the NCLAT as an indication that the requirement for prior approval was meant to be only directory. 32. The proviso to Section 31(4) of the IBC was inserted by the Insolvency and Bankruptcy Code (Amendment) Act, 2018. Postamendment, the provision reads thus: "(4) The resolution applicant shall, pursuant to the resolution plan approved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rohatgi, the learned counsel for AGI Greenpac, that the rule of purposive interpretation should be adopted in order to interpret the proviso to Section 31(4) of the IBC. He, in fact, suggests a departure from the principles of literal interpretation. However, the proposition of law is well-settled that when the language of the provision is clear and unambiguous, literal interpretation is the best way to understand the legislative intention behind enacting the particular provision. 37. On the need for literal interpretation of a statue, when the words are clear and unambiguous, Mr. Francis Bennion in his oft-quoted treatise Bennion on Statutory Interpretation stated: "Where the enactment is grammatically ambiguous, the opposing constructions put forward are likely to be alternative meanings, each of which is grammatically possible. Where on the other hand, the enactment is grammatically capable of one meaning only, the opposing constructions are likely to contrast an emphasised version of the literal meaning with a strained construction. In the latter case, court will tend to prefer the literal meaning, wishing to reject the idea that there is any doubt." Bennion on Statutory Int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is clear, plain and unambiguous, the courts are duty-bound to give effect to the meaning that can be inferred from a statute, irrespective of the consequences. Mere inconvenience being caused to a party, by virtue of the plain and literal interpretation accorded to a statute, cannot be reason enough to forego such interpretation. 43. Emphasising on construing the meaning from the plain language of Section 123(7) of the Representation of the People Act, 1951, as it then stood, Justice S. R. Das pertinently observed Rananjaya Singh v. Baijnath Singh, (1954) 2 SCC 314: "The spirit of the law may well be an elusive and unsafe guide and the supposed spirit can certainly not be given effect to in opposition to the plain language of the sections of the Act." 44. In other words, the so-called 'spirit of the law' is an indeterminate construct, whose nature renders it subjective and susceptible to varied interpretations depending on the personal predilections of those tasked with interpreting it. Therefore, it is almost unattainable as a definitive guide, especially in the face of or when put in opposition to the unambiguous, clear and plain language used in a particular provision, as i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny different meaning by comparison, strained, or far-fetched, or unusual or unlikely." Pgs. 1013, 1014, Ried Macdonald and Fordham, Cases and other Materials on Legislation, 2nd Edn; Hutton v. Phillips, (1949) 45 Delh 156, 70A 2d 15. 47. Similarly, a provision would not be considered ambiguous merely because it contains a word which in different contexts, is capable of a different meanings, but instead if it contains a word or phrase which is capable of having more than one meaning in that particular context 48. When the statute is clear and straightforward, the Supreme Court in Bhavnagar University v. Palitana Sugar Mill Private Limited (2003) 2 SCC 111 held as follows: "25. Scope of the legislation on the intention of the legislature cannot be enlarged when the language of the provision is plain and unambiguous. In other words, statutory enactment must ordinarily be construed according to its plain meaning and no words shall be added, altered or modified, unless it is plainly necessary to do so to prevent a provision from being unintelligible, absurd, unreasonable, unworkable, or totally irreconcilable with the rest of the statute." 49. Lord Atkinson in Corp. of the City ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain thing in a certain manner, it must be done in that particular manner or not done at all. For this proposition, it would be relevant to extract the following from the judgment in A. R. Antulay v. Ramdas Sriniwas Nayak (1984) 2 SCC 500 : "22…….. It is unnecessary to refer to the long line of decisions commencing from Taylor v. Taylor [(1876) 1 Ch D 426]; Nazir Ahmad v. King-Emperor [AIR 1936 PC 253 (2) : 63 IA 372 : (1936) 37 Cri LJ 897] and ending with Chettiam Veettil Ammadv. Taluk Land Board [(1980) 1 SCC 499 : AIR 1979 SC 1573 : (1979) 3 SCR 839], laying down hitherto uncontroverted legal principle that where a statute requires to do a certain thing in a certain way, the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden." 55. The language of the proviso to Section 31(4) of the IBC appears to be clear with no ambiguity and in those situations, all words finding place in the provision must be given their due meaning. 56. The efforts must therefore be to construe any text, phrase and/or proviso in a reasonable manner without going beyond the limited range of permissibility within which the legislative meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court to avoid a construction, if reasonably permissible on the language, which will render a part of the statute devoid of any meaning or application. The courts always presume that the legislature inserted every part thereof for a purpose and the legislative intent is that every part of the statute should have effect. The legislature is deemed not to waste its words or to say anything in vain and a construction which attributes redundancy to the legislature will not be accepted except for compelling reasons. It is not a sound principle of construction to brush aside words in a statute as being inapposite surplusage, if they can have appropriate application in circumstances conceivably within the contemplation of the statute..." 61. The intent of the legislature must therefore be gathered from the words it has used in the statute. Naturally, the Court should proceed with the assumption that no word has been used in vain or in an inapposite manner, by the legislature. Quebec Railway, Light, Heat & Power Co. v. Vandry, SCC OnLine PC 10; ESI Corpn. v. KEY DEE Cold Storage Pvt. Ltd., (2022) 17 SCC 379; UOI v. Hansoli Devi, (2010) 15 SCC 483 Courts, when confronted with clear statuto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim that they are playing the role of a law-maker merely for an exhibition of judicial valour. They have to remember that there is a line, though thin, which separates adjudication from legislation. That line should not be crossed or erased... ... .. .. 16. Rules of interpretation do not permit courts to do so, unless the provision as it stands is meaningless or of doubtful meaning. Courts are not entitled to read words into an Act of Parliament unless clear reason for it is to be found within the four corners of the Act itself... ... ..." 65. In the present case, the use of the word 'prior' at the appropriate place in the proviso besides being direct, clear and unambiguous also does not lead to any absurd consequences. The proviso to Section 31(4) of IBC mentions that the approval to the Resolution Plan from CCI shall be obtained 'prior' to its approval by the CoC. Therefore, to interpret the specific word to mean that such an approval can be obtained even 'after' and not necessarily 'prior' to the approval by the CoC would amount to reconstructing a statutory provision, which is not permissible. Different Threshold for Combinations 66. To further fortify that the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... combination notice to the CCI. Further, this timeline of 30 days may be extended by another 30 days, only in exceptional cases. In the event that no approval or rejection is provided by the CCI within the aforementioned timelines, the said combination would be deemed to have been approved. Details forms and relevant regulations in this regard may be provided by CCI in due course of time." 69. As can be appreciated from above, a timeline was incorporated to plug a loophole and provide for a schedule to obtain the necessary approvals, which was hitherto not provided. At the same time, a distinction was drawn between necessary approvals required to be received from different statutory bodies and regulatory authorities vis-à-vis the CCI's approval. In case of other statutory bodies, a timeline of one year subsequent to the CoC's approval of the Resolution Plan was deemed to be sufficient, whereas the timeline for procuring the CCI's approval was brought ahead in the sense that the same was required to be obtained prior to the approval of the Resolution Plan, by the COC. 70. The statute, as can be observed, provided a different threshold for the CCI's approval as compared to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prior to the approval of resolution plan by the Adjudicating Authority." 73. Both the Notes on Clauses and the Memorandum clearly mention that the approval from the CCI for the combination must be obtained prior to, the approval of the Resolution Plan by the CoC. However, the last line in the Memorandum states that the same is to clarify that the approval from CCI for the combination, shall be obtained prior to the approval of the Resolution Plan, by the Adjudicating Authority, instead of CoC, as mentioned in the preceding line and also the inserted proviso. A question might therefore arise - whether it was an inadvertent legislative error? As can be appreciated, the erstwhile Ordinance provided for a 'post- Adjudicating Authority' approval stage. The Memorandum clarified that a new step had been added at a 'pre-Adjudicating Authority' approval stage. It would therefore be logical to hold that obtaining prior approval of the CCI before the CoC approval, would seamlessly cover the 'pre-Adjudicating Authority' approval stage without any possible disruption. 74. The error as noticed above, appears to have been inadvertently made while drafting the Memorandum but this is not the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers cannot draw support from this heading in the explanatory memorandum. Moreover, an explanatory memorandum is usually 'not an accurate guide of the final Act'. [See Francis Bennion's Statutory Interpretation, 1984 edn. at p. 529]." 76. Additionally, it is not necessary to refer to Memorandum explaining particular clauses of a Bill when the language of the provision is clear and unambiguous, as has been held in ACG Associated Capsules v. Commissioner of Income Tax (2012) 3 SCC 321. In any case, a Memorandum explaining a particular proviso stands at a lower footing when compared with Notes on Clauses, explaining the entire amendment, especially in cases where the language in the statute is definite and straightforward. In fact, the Memorandum does not even feature in the Hindi version of the Bill whereas the Notes on Clauses elaborately explaining the intent behind introducing each amendment, features prominently in both the English and Hindi versions. This would also indicate that the Memorandum can never play the decisive role. 77. More importantly, such external aids of interpretation could have a limited role only when repugnancy within the statute fall for consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibes that a particular act is to be done in a particular manner and also lays down that failure to comply with the said requirement leads to a specific consequence, it would be difficult to hold that the requirement is not mandatory and the specified consequence should not follow." 84. The long-standing principle of the consequence of non-compliance being the determinative factor, was later reaffirmed in several judgments, such as Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd. (2022) 10 SCC 1, Mackinnon Mackenzie & Co. Ltd. v. Mackinnon Employees Union (2015) 4 SCC 544, as well as Indore Development Authority v. Manoharlal. (2020) 8 SCC 129 85. Earlier, emphasising on the consequence theory to understand the binding nature of the statute, Justice K. Subba Rao in his majority opinion in State of U.P. v. Babu Ram Upadhyaya 1960 SCC OnLine SC 5, held as follows: "29. The relevant rules of interpretation may be briefly stated thus : When a statute uses the word "shall", prima facie, it is mandatory, but the Court may ascertain the real intention of the legislature by carefully attending to the whole scope of the statute. For ascertaining the real intention of the Legisl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause any disharmony or conflict. The only exception could be in the extremely rare circumstances discussed below, influenced by external factors. But such extreme and unlikely situations cannot and should not be allowed to influence our interpretative exercise on the functioning of the legislative framework which will fit in with most cases. 90. In that context, the timeline of 210 days as stipulated under the Competition Act would be attracted only in cases which involve an extremely high degree of AAEC, mostly indicative of a complicated super-monopolistic behemoth. In fact, it must be borne in mind that CCI itself in its Annual General Report for the year 2022-2023 stated that the average time required to dispose of combination applications, is usually 21 working days. There has been no recorded instance till date where, more than 120 days were taken by the CCI to approve a combination proposal. Additionally, of the 99 combination proposals approved by the CCI, an overwhelming 85 of those were approved within 30 days and the rest 14 approvals took less than 120 days in toto. Therefore, the extreme and rare examples projected by the counsel for AGI Greenpac and CoC need not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the application to obtain approval from the CCI can only be submitted at the stage when the Resolution Plan is submitted i.e., T + 135 days, in the timeline would be erroneous and unacceptable. The application under the statutory scheme, can be submitted at various stages, including but not limited to, at the time of Expression of Interest i.e.., T + 60 days, or issuance of RFRP i.e., T + 105 days, or even when the list of provisional Resolution Applicants is published i.e., T + 85 days. Taking this into account, submitting the combination proposal before the CCI at either of these stages, would have still resulted in the culmination of the entire process, within the stipulated time limit of 330 days, under the IBC. 95. On the upper limit of 330 days within the CIRP timeline, it has been pertinently this Court in Committee of Creditors of Essar vs. Satish Kumar Gupta observed the following (2020) 8 SCC 531: "124. Given the fact that timely resolution of stressed assets is a key factor in the successful working of the Code, the only real argument against the amendment is that the time taken in legal proceedings cannot ever be put against the parties before NCLT and NCLAT based up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or parties involved but the tardy process of the Tribunal or the Adjudicating Authority. 97. However, if notice for the proposed combination under Section 6(2) of the Competition Act has been given within the stipulated time and no dilatory tactics have been employed, the parties should not be held responsible for any delay on the part of the CCI, in examining the combination. The CCI, as their counsel Mr. Balbir Singh points out, has been able to approve bulk of the proposed combinations, in a time-bound and reasonable manner, as can be gleaned from the Annual General Reports and material placed on record, by Mr. Singh. 98. In the present case, even though dilatory tactics are said to have been adopted in the submission of notice under the Combination Regulations, with Form II submitted on 03.11.2022, the combination was approved on 15.03.2023 i.e., within 132 days. The recent Competition (Amendment) Act, 2023 which reduced the timeline for approving combination proposal from 210 days to 150 days and requiring the CCI to give a prima facie opinion on the likelihood of a combination causing an Appreciable Adverse Effect on Competition (AAEC) from 30 days to 15 days, is indicativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsequently, its precedential value in the present context is limited, and it cannot be relied upon to determine the issues arising in this appeal. 105. The reliance on the decision in Makalu Trading Ltd. v. Rajiv Chakraborty 2020 SCC OnLine NCLAT 643, is equally misplaced, as the judgment merely reiterates the findings in Arcelor Mittal, without any independent analysis or discussion on the merits of the relevant legal propositions. Pertinently, Makalu does not address the applicability of the proviso to Section 31(4) of the IBC, or engage with the legal or factual nuances, that may distinguish the cases. 106. Further, it does not also discuss the object behind the IBC or the introduction of the proviso. In fact, the CCI approval in Makalu does not pertain to a situation where a prima facie opinion regarding the existence of an AAEC was formed. The absence of such consideration underscores the limited relevance of the decision to the present matter where, significant issues pertaining to both the IBC and Competition law have been raised, requiring a thorough examination of the CCI's observations and the implications of its approval. 107. As such, the precedential value of Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... force. In this context, the relevant extracts from the IBC are reproduced below : S. 30 of the Code states: "30. Submission of resolution plan. -- (1) A resolution applicant may submit a resolution plan along with an affidavit stating that he is eligible under Section 29-A to the resolution professional prepared on the basis of the information memorandum. (2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan-- … (e) does not contravene any of the provisions of the law for the time being in force … (3) The resolution professional shall present to the committee of creditors for its approval such resolution plans which confirm the conditions referred to in subsection (2). … (6) The resolution professional shall submit the resolution plan as approved by the committee of creditors to the Adjudicating Authority." S. 31 of the Code states: "31. Approval of resolution plan.--(1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub- section (4) of Section 30 meets the requirements as referred to in subsection ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the opinion that the combination has, or is likely to have, an appreciable adverse effect on competition, it shall direct that the combination shall not take effect. (3) Where the Commission is of the opinion that the combination has, or is likely to have, an appreciable adverse effect on competition but such adverse effect can be eliminated by suitable modification to such combination, it may propose appropriate modification to the combination, to the parties to such combination. … (11) If the commission does not, on the expiry of a period of two hundred and ten days from the date of notice given to the commission under sub-section (2) of Section 6, pass an order or issue direction in accordance with provisions of sub-section (1) or sub-section (2) or sub-section (7), the combination shall be deemed to have been approved by the Commission. … (13) Where the Commission has ordered a combination to be void, the acquisition or acquiring of control or merger or amalgamation referred to in Section 5, shall be dealt with by the authorities under any other law for the time being in force as if such acquisition or acquiring of control or merger or amalgamati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating authority, could not have mandated that the requirement of obtaining prior approval of the CCI before placing the Resolution Plan before the NCLT, can be relaxed. Granting such relaxation on a whim, oddly enough through an e-mail in the present case, was in our opinion beyond the scope of the Resolution Professional's powers. 117. In the current case, a prima facie opinion under Section 29(1) of the Competition Act was found to the effect that AGI's Resolution Plan, as approved by the CoC, was in contravention of Section 6 of the Competition Act. Only after the proposed divestment proposed by AGI Greenpac, did the CCI approve the proposed combination. Importantly, much before the proposed divestment and the approval to such combination was given by the CCI, the Resolution Plan was placed, voted upon and approved by the CoC. Therefore, it is apparent that AGI Greenpac's Resolution Plan as approved by the CoC was without the requisite approval of the CCI on that date. Therefore this would be in contravention of Section 6(1) of the Competition Act for the combination in question. 118. What is also of great relevance is that after the COC's approval, the Resolution Plan c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is likely to cause or has caused Appreciable Adverse Effect on Competition (AAEC), within the relevant market. The term 'parties to the combination' as explicitly defined under Regulation 2(f) includes both entities entering into the combination and the combined entity, if the combination has come into effect. 125. In the present case, it is evident that the CCI, while exercising its powers under Section 29(1), failed to issue the mandatory SCN to all relevant parties, most notably, the target company itself i.e., the HNGIL. The SCN dated 10.02.2023 was issued only to the acquirer company i.e., in the present case, AGI Greenpac, although the involvement of both parties is integral, to the assessment of potential AAEC, in the relevant market. This omission constitutes a major procedural lapse, as the law clearly requires all parties to the combination to be notified of such finding by the CCI. The opportunity to respond must also be given to them. 126. The CCI was obligated to issue an appropriate SCN to both the acquirer and the target. The term 'to the parties to the combination' cannot be restricted to the proposed acquirer alone. The finding of the NCLAT on this aspect is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise of evidence-gathering and fact-finding, especially when compared to an 'inquiry'. Such an investigation, as per the mandate of Section 29(1A), is to be executed under the aegis of the Director-General, thereby reaffirming the seriousness of the scrutiny, envisaged in cases of combinations. 131. In the present matter, the procedural sanctity prescribed under the scheme has been regrettably disregarded, with the Commission failing to solicit inputs from public, affected stakeholders and those likely to be affected by such combination under Section 29(2). This omission not only contravenes the statutory intent but also diminishes the transparency and inclusivity that underpin the review mechanism for combinations. The legislative scheme unambiguously envisions an investigation that encompasses a wide array of stakeholders, as combinations inherently possess the potential to reshape market dynamics in ways that ripple across the competitive landscape. 132. The reasoning advanced by the CCI to avoid the issuance of SCN to HNGIL under Section 29(1) is unacceptable. Only because the Resolution Professional did not object to the same does not override the statutory requirements pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Regulation 25(1A) unequivocally mandates that a voluntary modification submitted to the CCI, must bear the imprimatur of both parties to the combination, namely, the acquirer and the target. This statutory requirement is not just a procedural formality. It is in fact a substantive safeguard, designed to ensure that interests of all stakeholders are duly represented and protected. In the present matter, the proposed modification seeks the divestment of the Target's plant, a move that inherently attracts the provisions of the IBC. The active participation and explicit approval of the target company are indispensable pre- requisites, to the submission of any voluntary modification and steps to the contrary, cannot be countenanced. 137. Furthermore, the legislative intent underpinning Regulation 25(1A) necessitates a holistic and inclusive approach to such modifications, particularly where the proposed measures, impinge upon the operational and structural integrity of the target company. The facts of this case underscore the criticality of this requirement, as the proposed divestment scheme is a vital component of the revival of the stressed target company under the resolution f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itive assessments and market dynamics, were evaluated. It is a cardinal principle of regulatory jurisprudence that decisions impacting market structures must be anchored in verifiable and transparent information. Here, the inconsistent capacity figures as pointed out by Mr. Rao significantly dilute the effectiveness of divestiture remedies, potentially exacerbating rather than mitigating the anticompetitive effects. 143. Transparent and accurate data disclosures are fundamental to the regulatory mechanism. The identified discrepancies compromise the very basis of the CCI's decision-making process. It is imperative to therefore underscore that discrepancies in operational capacity data would strike at the very root of the regulatory mechanism. While we do not intend to embark on a fact-finding expedition afresh, the prima facie inconsistencies in the submitted data ought to have been examined with greater care by the NCLAT. But this was not done. Consequently, the conditional approval should have been revoked, especially in light of the CCI's express mention in its order (dated 15.03.2023) that the order may be revoked if the information provided by the acquirer is found to be inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aracterised with finality and decisiveness, conditional approval appears to be a perilous deviation from the stated objectives. As underscored in the CCI's conditional approval order, the order remains subject to revocation if the information furnished by the parties is later found to be inaccurate. This acknowledgment, however, exposes the system's vulnerability to abuse or misrepresentation, particularly in the absence of a system, enforcing checks and balances. Further, such a conditional approval can foster uncertainty, prolong negotiations, and necessitate further modifications, thereby putting at peril the sanctity of the resolution framework. Ebix Singapore Pvt. Ltd. v. CoC of Educomp Solutions Ltd., (2022) 2 SCC 401. CONCLUSION 148. As India aspires to establish itself as a global manufacturing powerhouse and investment hub, it is imperative that it is able to provide a reliable, robust and competitive business environment for both domestic and international stakeholders. In essence, the introduction of the Green Channel route, which strives to create a level-playing field and enable new entrants to effectively compete with established players in the Indian market, is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... negotiable and that the ends cannot justify the means. 153. By upholding the mandatory nature of the statutory provision and emphasising upon the critical importance of procedural safeguards, the principle of rule of law is upheld in alignment with global best practices which underscore fairness, predictability and transparency. Such an approach not only reinforces the integrity and credibility of the legal framework but also highlights India's commitment to fostering a regulatory environment, which is conducive to both business and innovation. Additionally, it also ensures the protection and enforcement of rights in an equitable manner, free from bias or favouritism. 154. Therefore, a balance between the need for expeditious relief and adherence to the statutory framework must necessarily be maintained, in order to ensure that the objectives of both, the IBC and the Competition Act are met in a manner that supports India's long-term economic aspirations. 155. The upshot of the above discussion are the following orders: 155.1. The AGI Greenpac's Resolution Plan is unsustainable as it failed to secure prior approval from the CCI, as mandated under the proviso to Section 31(4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ................. 14 IV. POLICY UNDERLYING THE IBC ......................................................... 21 V. SCHEME OF INSOLVENCY AND BANKRUPTCY CODE, 2016 ............. 24 VI. ANALYSIS .......................................................................................... 27 JUDGMENT S.V.N. BHATTI, J. I have had the opportunity to read the well-crafted judgement circulated by my Learned Brother, Justice Hrishikesh Roy. In spite of my effort to subscribe to the view taken by my Learned Brother, for the subtle distinction I noticed in interpreting the proviso to section 31(4) of the Insolvency and Bankruptcy Code, 2016 ("IBC"), I find it apt to express my position on the same through this opinion. 1. The captioned appeals arise from the common order Dt. 18.09.2023 of the National Company Law Appellate Tribunal, Principal Bench, New Delhi ("NCLAT") under section 62 of the IBC read with the Insolvency and Bankruptcy Amendment Act, 2018. Civil Appeal No.4924 of 2023 and connected appeals arise from the order Dt. 28.07.2023 of the NCLAT, and the controversy in these appeals arises under the Competition Act, 2002 ("Competition Act"). 2. The two sets of appeals have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r "total value of loan book /instruments" 5. The RP on 24.05.2022 issued the Request for Submission of Resolution Plans ("RFRP"). Clauses 2.6.3(c), 3.3 and 4.1.1(k) require compliance with the mandate of sections 5 and 6 of the Competition Act by the resolution applicants to whom the combination would be attracted. 6. On 26.09.2022, AGI Greenpac Limited ("AGI") submitted the draft resolution plan to the RP. The Appellant, Independent Sugar Corporation Limited ("INSCO") in Civil Appeal No. 6071 of 2023, is one of the resolution applicants. INSCO received green channel combination approval on 30.09.2022 from the Competition Commission of India ("CCI"). In the e-voting of the Committee of Creditors ("CoC"), Dt. 27.10.2022, the resolution plans of AGI received 98% votes, and INSCO received 88% votes. The communication Dt. 28.10.2022 of the RP addressed to INSCO noted that AGI was declared as the successful resolution applicant. 7. On 27.09.2022, AGI applied to CCI in Form I for approval of the proposed CIRP combination of taking over HNGIL. The said approval was rejected by CCI on 22.10.2022. AGI, on 03.11.2022, applied to CCI in Form II for approval of the proposed combination of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e combination approval order Dt. 15.03.2023 of CCI. The objection of INSCO proceeds that the proviso to section 31(4) mandates the resolution applicant to have prior approval of CCI on the combination proposed through the resolution plan. 12. The adjudicating authority vide order Dt. 28.04.2023 dismissed IA (IB) No.1497/KB/2022 filed by INSCO. By the order of even date, I.A. Nos. 628 and 701/KB/2023 were allowed to the extent of placing on record the CCI's communication Dt. 15.03.2023. B. PROCEEDINGS BEFORE NCLAT 13. The order Dt. 28.04.2023 was challenged before the NCLAT by the following parties, and details are stated thus: Sl. No. Company Appeal No. Name of the appellant 1. Company Appeal No.807/2023 Soneko Marketing Private Limited 2. Company Appeal No.607/2023 UP Glass Manufacturers Syndicate 3. Company Appeal No.724/2023 HNG Karmachari Union and Another 14. INSCO assails the order of the Adjudicating Authority Dt. 28.04.2023 that the reliance placed on Arcelor Mittal India Pvt. Limited vs. Abhijit Guhathakurta, Resolution Professional of EPC Constructions India Limited & Ors. (2019) SCC OnLine NCLAT 920 is erroneous, and according to the ratio in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ANR. v. GIRISH SRIRAM JUNEJA & ORS C.A. 6177 OF 2023 SONEKO MARKETING PVT. LTD v. GIRISH SRIRAM JUNEJA & ORS C.A. 6847 OF 2023 HNG INDUSTRIES THOZHILALAR NALA SANGAM v. GIRISH SRIRAM JUNEJA & ORS 19. Dr. Abhishek Manu Singhvi, Shri Mahesh Jethmalani, Shri Rajshekhar Rao and Shri Dhruv Mehta, learned Senior Counsel, have appeared for the appellants. 20. Shri P. Chidambaram, learned Senior Counsel, appeared for the Resolution Professional in the Civil Appeals. 21. Shri Tushar Mehta, learned Solicitor General appeared for the Committee of Creditors. 22. Shri Mukul Rohatgi and Shri Paras Tripathi, learned Senior Counsel have appeared for AGI Greenpac Ltd. A. ARGUMENTS ON BEHALF OF THE APPELLANT 23. Arguments on behalf of the appellants are summarised as follows: 23.1. The RP and the resolution applicant are bound by the mandate of section 30(2)(e) of the IBC, stipulating that the resolution plan does not contravene any provision of law for the time being in force. 23.2. The RP in the RFRP Dt. 24.05.2022, through Clauses 2.6.3(c), 3.3 and 4.1.1(k), requires the resolution applicant to have prior approval of CCI for the proposed combination before the approval of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siders the resolution plan. 23.14. The Court, while interpreting, shall not legislate or change the law which clearly reflects the will of the Parliament. The reliance on Arcelor Mittal (supra) is erroneous and illegal, even if these decisions are confirmed by this Court in the Civil Appeal(s). B. ARGUMENTS ON BEHALF OF THE RESPONDENTS 24. The Respondents' arguments are summarised as follows: 24.1. The Bankruptcy Law Reforms Committee ("BLRC") was constituted to study the deficiencies in the then-prevailing laws relating to or dealing with insolvency and bankruptcy of individuals and corporate entities. The Parliament, guided by the BLRC report, enacted the IBC. The statutory scheme of IBC provides for comprehensive remedies, i.e., recovery of debt through maximization of asset value through CIRP, and in a chronic case where redemption of debt through CIRP does not make business sense for the stakeholders, then liquidation is triggered. The fulcrum of IBC is the preservation of the company in distress as a going concern and ensuring the discharge of debt(s) of a stressed company. 24.2. Therefore, the interpretation of the proviso to sub-section (4) of section 31 is adopted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sub-section (4) of section 30, satisfies the following requirements - Sub-section (2) of section 30: • Requires approval of the resolution plan. • Holds that the effect of approval is binding on the corporate debtor, etc. The proviso to sub-section (1) of section 31: • Mandates Adjudicating Authority to ensure provisions for effective implementation before passing an order of approval. Sub-section (2) of section 31: • Adjudicating Authority may reject the resolution plan if it does not confirm to the requirements of sub-section (1) of section 31. • The expression "does not confirm" determines the requirements of section 30(2) of the IBC. Sub-section (4) of section 31: • Ensures the corporate debtor operates as a going concern. • Provides a one-year window to obtain licenses, consents and other permissions to continue operations. Operation of sub-section (4) of section 31: • Order of approval ensures the continuity of the business plan as a going concern after the change of management with the valid licenses, permissions, consents, etc., standing in the name of the corporate debtor. Statutory fiction of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt, and the challenge to settled positions is unsustainable. The Civil Appeals are filed under section 62 of the IBC, and the approval of the view of the NCLAT by this Court has a different dimension in law. 24.13. The interpretation of the requirement in the proviso to sub-section (4) of section 31 as directory ensures the smooth initiation of CIRP on the one hand and, on the other, obtaining approval for the proposed combination from CCI before a decision is taken under sub-sections (1) and (2) of section 31 by the adjudicating authority. 24.14. The statutory compliance status and the effect of giving approval under section 31(1) and (2) of the IBC is in the exclusive domain of the Adjudicating Authority under section 31(1) and (2) of the IBC. The language of sub-section (2) of section 31 is unambiguous. The examination of requirements of sub-section (2) of section 30 is at the stage of examination under section 31(1) of the IBC by the Adjudicating Authority. The Adjudicating Authority either approves the resolution plan approved by the CoC or rejects the plan ground(s) set out in section 31 of the IBC. The consequences for noncompliance of a requirement, including combination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orth more than the realisation of the piecemeal distribution of assets. However, if this objective cannot be achieved, the best outcome for society is the rapid liquidation of a failing corporate debtor. When such statutory arrangements are put into place, the market process of creative construction, on the one hand, and creative destruction, on the other hand, will work smoothly with greater competitive vigour. 26. BLRC lays emphasis on a strong and mature market economy. This involves well-drafted modern laws that replace the laws of the preceding 100 years and high-performance institutions which enforce these new laws. The Committee has the end word to provide one critical building block of this process with a modern Insolvency and Bankruptcy Code and the statutory design associates institutional infrastructure, which reduces delays and transaction costs. The BLRC, through the IBC, compartmentalized the functions and duties of RP, CoC and the Adjudicating Authority. 27. The report recommended assessing the viability of a corporate debtor and noted that the economic purview presented an advantage by calling for the assessment of the viability of an enterprise or a project. An e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TCY CODE, 2016 30. The statement of objects and reasons of the IBC set out the following aims: 30.1. To ensure that the framework prior to IBC for insolvency and bankruptcy, which was inadequate and ineffective, leading to undue delays in resolution, is done away with. 30.2. To effectuate an effective legal framework for timely resolution of insolvency and bankruptcy, which would support the development of credit markets and encourage entrepreneurship. The Code also aims to improve the Ease of Doing Business, and facilitate more investments leading to higher economic growth and development. 30.3. To consolidate laws regarding insolvency and bankruptcy in India to ensure the insolvency resolution of corporate persons in a time-bound manner for maximization of the value of the assets of such persons, promote entrepreneurship and the availability of credit, and balance the interests of all the stakeholders. 30.4. The Code also aims to separate commercial aspects of insolvency and bankruptcy proceedings from judicial aspects. 31. Part II of the Code deals with insolvency resolution and liquidation for corporate persons. Chapter II deals with CIRP, and in the event of the effort ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d even after the appointment of a resolution professional. By an order under section 31(2) of the IBC, the corporate debtor is made over to the successful resolution applicant as approved by the Adjudicating Authority. The IBC envisages the preservation of the rights of financial creditors, operational creditors, and employees, as well as the supply of goods or services by the corporate debtor into the market. VI. ANALYSIS 36. The brief narrative of the working of the Code takes us to the point posed for consideration in these appeals. The appellants commend the literal rule of interpretation to the proviso and have laid much emphasis on the expressions viz., "shall", "prior to", and "committee of creditors". This argument applies the golden rule of interpretation in establishing that the proviso is mandatory and must be complied with before the stage of sub-section (4) of section 30, i.e., consideration of the resolution plan by CoC at the time of voting. The extended argument is that a combination approved post the decision taken under section 30(4) of the IBC cannot be relied upon and taking on file the approval of combination Dt. 15.03.2023 of CCI, as proposed by AGI, is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter frustrates the patent purposes of the statute. Ld. Justice J.C. Shah in New India Sugar Mills Ltd. v. Commissioner of Sales Tax, Bihar, AIR (1963) SC 1207 noted that "it is a recognized rule of interpretation of statutes that the expressions used therein should ordinarily be understood in a sense in which they best harmonise with the object of the statute, and which effectuate the object of the Legislature". The limitation of the purposive role of construction is that the interpretation shall not result in legislation by the Court. Hardship, inconvenience, injustice, absurdity and anomalous results are avoided while construing the statute they need be. 43. Lord Shaw in Shannon Realities Ltd. v. St. Michel (Ville De), (1924) AC 185 notes that "[w]here words of a statute are clear, they must, of course, be followed but in their Lordships' opinion, where alternative constructions are equally open that alternative is to be chosen which will be consistent with the smooth working of the system which the statute purports to be regulating; and that alternative is to be rejected which will introduce uncertainty, friction or confusion into the working of the system". (emphas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then the Court attempts to resolve it to make the section consistent in text and tense. 47. According to sub-section (26) of section 5, a resolution plan is a plan proposed by the resolution applicant for the insolvency resolution of the corporate debtor as a going concern in accordance with Part II. section 25(2)(h) sets out the duties of an RP and reads thus: (h) invite prospective resolution applicants, who fulfil such criteria as may be laid down by him with the approval of committee of creditors, having regard to the complexity and scale of operations of the business of the corporate debtor and such other conditions as may be specified by the Board, to submit a resolution plan or plans. (emphasis supplied) 48. Section 30 30 (1) A resolution applicant may submit a resolution plan [along with an affidavit stating that he is eligible under Section 29-A] to the resolution professional prepared on the basis of the information memorandum. (2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan-- (a) provides for the payment of insolvency resolution process costs in a manner specified by the Board in priorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have been given and it shall not be a contravention of that Act or law.] (3) The resolution professional shall present to the committee of creditors for its approval such resolution plans which confirm the conditions referred to in sub-section (2). [(4) The committee of creditors may approve a resolution plan by a vote of not less than [sixtysix] per cent of voting share of the financial creditors, after considering its feasibility and viability [the manner of distribution proposed, which may take into account the order of priority amongst creditors as laid down in sub-section (1) of Section 53,including the priority and value of the security interest of a secured creditor], and such other requirements as may be specified by the Board: Provided that the committee of creditors shall not approve a resolution plan, submitted before the commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 (Ord. 7 of 2017), where the resolution applicant is ineligible under Section 29-A and may require the resolution professional to invite a fresh resolution plan where no other resolution plan is available with it : Provided further that where the resolution applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section (4) of Section 30 meets the requirements as referred to in sub-section (2) of Section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, [including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed,] guarantors and other stakeholders involved in the resolution plan: [Provided that the Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation.] (2) Where the Adjudicating Authority is satisfied that the resolution plan does not confirm to the requirements referred to in sub-section (1), it may, by an order, reject the resolution plan. (3) After the order of approval under sub-section (1),-- (a) the moratorium order passed by the Adjudicating Authority under Section 14 shall cease to have effect; and (b) the resolution professional shall forward all records relating to the conduct of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted hereunder: Notes on clauses in Amending Act 26 of 2018 "Clause 24 of the Bill seeks to amend section 31 of the Code to provide that the Adjudicating Authority shall, before passing an order for approval of resolution plan satisfy that the resolution plan has provisions for its effective implementation and that the resolution applicant shall obtain the necessary approvals required within a period of one year from the date of approval of the resolution plan by the Adjudicating Authority or within such period as provided for in such law, whichever is later and where it contains a provisions for combination the approval of the Competition Commission of India shall be obtained prior to the approval of resolution plan by the committee of creditors." Memorandum explaining the modifications contained in the Bill to replace the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 (d) in clause 24 of the Bill, in sub-section (4) of section 31 of the Code, a new proviso is inserted "Provided that where the resolution plan contains a provision for combination as referred to in section 5 of the Competition Act, 2002, the resolution applicant shall obtain the approval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Adjudicating Authority finds, on a given set of facts, that the aforesaid parameters have not been kept in view, it may send a resolution plan back to the Committee of Creditors to re-submit such plan after satisfying the aforesaid parameters. The reasons given by the Committee of Creditors while approving a resolution plan may thus be looked at by the Adjudicating Authority only from this point of view, and once it is satisfied that the Committee of Creditors has paid attention to these key features, it must then pass the resolution plan, other things being equal." 56. This Court has held that CIRP under the IBC is based on a flexible model where market participants (as resolution applicants) can propose solutions for the revival of the corporate debtor. To put it succinctly, the ratio of Essar Steel (supra) can be understood as follows: 56.1. Since it is the commercial wisdom of the CoC that is to decide on whether or not to rehabilitate the corporate debtor by means of acceptance of a particular resolution plan, the provisions of the Code and the Regulations outline in detail the importance of setting-up of such Committee and leaving decisions to be made by the requisite m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the IBC and are not to act as a court of equity or exercise plenary powers. 57. The admitted circumstances are that - 57.1. On 27.09.2022, AGI in Form I applied for approval of the combination of the subject resolution plan. 57.2. On 22.10.2022, the application in Form I was rejected by CCI. 57.3. On 27.10.2022, through e-voting, the CoC approved AGI's resolution plan for HNGIL. 57.4. On 03.11.2022, AGI applied to CCI in Form II for approval of the combination. 57.5. On 15.03.2023, CCI approved the combination with a few conditions. 58. The above narrative is relied on to argue that the proviso to sub-section (4) of section 31 is violated by the RP and CoC. The above literal construction ignores the circumstances that surround Act 26 of 2018 and Act 26 of 2019, which introduced a few amendments to both sections 30 and 31 of the IBC. 58.1. The amendment of a provision of law is appreciated by a comparison between the pre-amendment and post-amendment law. The amendment to an existing law is necessitated to supplement the gaps noted in achieving the purpose or object of the existing enactment. The Parliament, after realizing the existence of a few bottlenecks in the smoo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired under the Companies Act, 2013 (18 of 2013) or any other law for the time being in force for the implementation of actions under the resolution plan, such approval shall be deemed to have been given and it shall not be a contravention of that Act or law.] 30(4) (4) The committee of creditors may approve a resolution plan by a vote of not less than seventy five per cent. of voting share of the financial creditors. (4) The committee of creditors may approve a resolution plan by a vote of not less than [sixty-six] per cent of voting share of the financial creditors, after considering its feasibility and viability [the manner of distribution proposed, which may take into account the order of priority amongst creditors as laid down in subsection (1) of Section 53,including the priority and value of the security interest of a secured creditor], and such other requirements as may be specified by the Board: Provided that the committee of creditors shall not approve a resolution plan, submitted before the commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 (Ord. 7 of 2017), where the resolution applicant is ineligible under Section 29-A and may require th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cant shall, pursuant to the resolution plan approved under sub section (1), obtain the necessary approval required under any law for the time being in force within a period of one year from the date of approval of the resolution plan by the Adjudicating Authority under subsection (1) or within such period as provided for in such law, whichever is later: Provided that where the resolution plan contains a provision for combination, as referred to in Section 5 of the Competition Act, 2002 (12 of 2003), the resolution applicant shall obtain the approval of the Competition Commission of India under that Act prior to the approval of such resolution plan by the committee of creditors. 62. Section 30(1) provides for the submission of a resolution plan by the resolution applicants. Section 30(2) obligates the RP to examine each resolution plan received by the RP to confirm that the resolution plan does not contravene any of the provisions of law for the time being in force. The relevant portion of Form H is reproduced hereunder : Form H Section of Code/Regulation No. Requirement with respect to Resolution Plan Clause of Resolution Plan Compliance (Yes/No) 25(23)(h) Whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roval by one of the resolution applicants. This circumstance may influence the voting pattern of the CoC. However, it cannot result in the rejection of a non-compliant resolution plan. 65. The duties and functions of the Adjudicating Authority under section 31 of IBC are as follows. 65.1. Section 31(1) provides for approval of a resolution plan by the Adjudicating Authority and is summarised thus: 65.1.1. If the Adjudicating Authority is satisfied that the resolution plan as approved by the CoC under section (4) of section 30 meets the requirements referred to in sub-section (2) of section 30; 65.1.2. Adjudicating Authority then shall, by order, approve the resolution plan; 65.1.3. The approved plan is binding on (a) the corporate debtor, (b) employees of the corporate debtor, (c) members, (d) creditors, (e) Central and State Governments or local authorities to whom statutory dues are owned, and (f) Guarantors and other stakeholders involved in the resolution plan. 65.2. The proviso inserted by Act 26 of 2018 to section 31(1) of the IBC obligates that the Adjudicating Authority shall, before passing an order of approval of a resolution plan under sub-section (1), satisfy that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nciple of construction to brush aside words in a statute as being inapposite surpluses, if they can have a proper application in circumstances conceivable within the contemplation of the statute." (emphasis supplied) 66.2. Further, this Court, in Harbhajan Singh v. Press Council of India, (2002) 3 SCC 722 dealt with the interpretation of sub-section (7) of section 6 Section 6(7): A retiring member shall be eligible for renomination for not more than one term of the Press Council Act, 1978, and employed grammatical tenses to present tenses used in the statute: "8. The provision is cast in the present tense. A retiring member is ineligible for renomination. "Not more than one term" qualifies "renomination". The words "retiring", used in the present tense, and "renomination" speak aloud of the intention of the legislature. If the word "retiring" was capable of being read as "retired" (sometime in the past) then there would have been no occasion to use "renomination" in the construction of the sentence. If the intention of law-framers would have been not to permit a person to be a member of the Council for more than two terms in his lifetime then a different, better and stronger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction, as has been canvassed by the appellants, must be applied to the entire scheme of sections 30 and 31 and not merely in isolation to the proviso to sub-section (4) of section 31 of the IBC. Sub-sections (1) and (2) of section 31 obligate the Adjudicating Authority in its jurisdiction to decide these aspects and consider whether approval should be granted or rejected. 69. The consequences of approval are also set out in sub-section (1) of section 31, including transferring the business of the corporate debtor to a successful resolution applicant. Sub-section (4) grants a window of one year to the successful resolution applicant for obtaining permissions, licenses or permits under applicable laws. These are ex post facto operational permissions/consents/licences needed to run the business as a going concern by the successful resolution applicant and to avoid civil or penal consequences. Sub-section (4) provides for a legal fiction to continue to operate with the existing permissions/licences/consents in favour of the corporate debtor from a host of authorities by the successful resolution applicant. 70. Whereas the meaning, definition and implication of combination attract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reflected in the amended section 31 of the IBC. Stepping up the requirement to a stage not envisaged by the parliament, particularly not resulting in a consequence for not having the approval of CCI, would be akin to writing too much into the sentence. In this context, if the requirement of approval of combination at the stage of CoC is held as mandatory, then through a literal interpretation of the proviso to section 31(4), the Court would be catapulting the proviso to a place not expressed by the parliament. Precisely reiterated, such interpretation, apart from causing difficulties in CIRP defeats the very object of maximization of recovery. 73. In contradistinction, section 31(4) specifically refers to due compliance with the requirements of sub-section (1) of section 31, which then refers to the requirements in sub-section (2) of section 30 with regard to approval of the resolution plan. The statutory compliance by the resolution applicant is divided into two stages viz., firstly, sub-section (4) provides a window time of one year to obtain necessary approval under any law by the resolution applicant; and secondly, having the combination approval before sub-section (2) of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st govern, and these are to be ascertained not only from the phraseology of the provision but also by considering its nature, its design, and the consequences which would follow from construing it one way or the other. Earl T. Crawford, The Construction of Statutes (Thomas Law Book Company, 1940), p. 516. 76. The use of the word 'shall' raises a presumption that the particular provision is imperative. However, the prima facie inference about the provision being imperative may be rebutted by other considerations, such as - the object, scope of the enactment, and the consequences flowing from such construction. The interpretation of the word 'shall' as directory has been a purposive effort of the court to sustain the object of the statute and, at the same time, ensure compliance with the requirements. This Court has interpreted 'shall' as directory to preserve the legislative effort and intent of the statute. 76.1. In Sainik Motors v. State of Rajasthan, AIR (1961) SC 1480 State of UP v. Babu Ram Upadhya, AIR (1961) SC 751 and State of MP v. Azad Bharat Finance Co., AIR (1967) SC 276 this Court has held that the word 'shall' does not always imply that a provision is mandatory. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disturb the smooth working of the intricate and competitive insolvency resolution system that the IBC envisages. Thus, the consequences of compliance and non-compliance with all the legal requirements of the resolution plan arise only before the Adjudicating Authority. Consequently, to keep section 31 uniform in all perspectives, it is concluded that in the place of literal interpretation, purposive interpretation is apt; therefore, the word 'shall' in the proviso to section 31(4) of the IBC is interpreted and held as directory. 79. From the above discussion, it is held that the proviso to sub-section (4) of section 31 is directory and would be compliant with IBC and the Competition Act. Hence, the combination approval of CCI at the stage of consideration of the resolution plan by the Adjudicating Authority under section 31(1) would be proper and legal. Such interpretation keeps the operations of the successful resolution applicant as a going concern, without deviating from the rigour of the Competition Act, and simultaneously, a one-year window is granted to obtain licenses, permissions, consents and other regulatory approvals envisaged by a host of laws. Therefore, the proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpetition Act, 2002 prior to the approval of such 'Resolution Plan' by the CoC, is directory and not mandatory. It is always open to the CoC, which looks into the viability, feasibility and commercial aspects of a 'Resolution Plan' to approve the 'Resolution Plan' subject to such approval by CCI, which may be obtained prior to approval of the plan by the Adjudicating Authority under section 31 of the IBC. No appeal to this Court. 2. Vishal Vijay Kalantari NCLAT - 2020 SCC OnLine NCLAT 1013 Supreme Court - 2021 SCC OnLine SC 3243 A plain reading of the provision makes it clear the Resolution Applicant is to obtain necessary approval within one year from the date of approval of the Resolution Plan by the adjudicating authority. It is manifestly clear that a Resolution Plan containing provision for combination has been treated as a class apart requiring approval of the Competition Commission of India even prior to such Resolution Plan being approved by the Committee of Creditors. However, treating such requirement as mandatory is fraught with serious consequences. Thus, relying on ArcelorMittal (Supra), the NCLAT held section 31(4) to be directory. This Court found no reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... state of affairs of men, machinery and matters of the corporate debtor. The delay loses the very sheen in the effort to revive the stressed assets of a corporate debtor. The law provides for availing legal remedies. It may not be understood as laying down that the interlocutory applications are not maintainable before the Adjudicating Authority and NCLAT. Parties are well within their competence to move an application, including further statutory remedies under IBC in accordance with law. The outcome must be met with consequences and costs for the unsuccessful parties. The consequences of delay must also be borne in mind. In State Bank of India & Ors. vs. The Consortium of Murari Jalan and Florian Fritsch & Anr., Civil Appeal No. 5023-5024 of 2024 this Court held CIRP cannot be endlessly postponed, including under the garb of litigation. This Court further held that the completion of CIRP is imperative to avoid value erosion. The failure of the resolution process will finally result in the sale of scrap of the assets of the corporate debtor, and again, a scenario experienced under previous regimes is reflected. It is axiomatic, more particularly in commercial matters, that costs an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Competition Act is attracted to the proposal of AGI since it has a substantial presence in the relevant market in India. Sections 5 and 6 of the Competition Act set out the combination and regulation of combinations. To wit, it is noted that the resolution applicants to the RFRP Dt. 24.05.2022 who are in the manufacture and supply of glass containers similar to the activities of HNGIL are informed to have the approval of the combination of the proposed resolution plan before the CoC considers the feasibility and viability of the resolution plan. 4. If the proposal of the resolution applicant contributes to horizontal or vertical relationships, then the requirements of sections 5 and 6 of the Competition Act are attracted, and due compliance is necessitated. 5. INSCO is a multinational company headquartered in Bermuda. It is engaged in consulting for agriculture, financial management, and business consultancy. AGI is engaged in manufacturing and supplying glass containers and has a substantial market share in the relevant market in India. The actual percentage of market participation of any of the parties is not noted as part of the narrative on the background circumstances. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2023, CCI issued a show cause notice under section 29(1) of the Competition Act to AGI to show cause as to why an investigation in respect of the proposed transaction should not be carried out. On 10.03.2023, AGI replied to the show cause notice Dt. 10.02.2023 and voluntarily offered to hive off or divest the Rishikesh Plant upon approval of the resolution plan by the Adjudicating Authority under the IBC. This was followed by further clarifications of AGI on 14.03.2023. CCI, on 15.03.2023, approved, under section 31(1) of the Competition Act, the modified combination of AGI. 10. The combination was approved vide order Dt. 15.03.2023 and was challenged before the NCLAT by a few aggrieved parties. NCLAT, through the order Dt. 28.07.2023, impugned in the civil appeals, dismissed the appeals and confirmed the combination approved by CCI. Hence, the civil appeals. II. THE GIST OF CCI ORDER DT. 15.03.2023 11. AGI and HNGIL are engaged in the manufacture and supply of glass containers. The activities of HNGIL and AGI involve both horizontal and vertical relationships. The CCI delineated the relevant product market as container glass packaging and noted the operation and existence of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpetition Act. The order of approval of CCI Dt. 15.03.2023 was assailed before the NCLAT. 13. The details of the appellants are stated thus: Sl. No. NCLAT Case No. Civil Appeal No. Appellant 1. (AT) No. 07 of 2023 Civil Appeal No. 4954/2023 UPGMS 2. (AT) No. 08 of 2023 Civil Appeal No. 4924/2023 INSCO 3. (AT) No. 09 of 2023 Civil Appeal No. 4937/2023 M/s Geeta and Company 4. (AT) No. 10 of 2023 Civil Appeal No. 5018/2023 HNG Workers Union 14. In Civil Appeal No. 5401 of 2023, AGI objected to the filing of appeals before NCLAT by the above appellants as they are not aggrieved persons, and the appeals, at their instance, are not maintainable. 15. To sum up the case before NCLAT, the objections are that the CCI failed to comply with the requirement of section 29(1) of the Competition Act because the CCI has not issued show cause notice to both the parties to combination, i.e., the acquirer and the target entity. Approval of the combination is vitiated and illegal inasmuch as CCI, on forming a prima facie opinion about AAEC through the combination proposed, issued a show cause notice under section 29(1) of the Competition Act to AGI. 16. CCI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was required to complete the further process under Section 29(2) including direction to the parties to the combination to publish details of combination? The CCI noted that there was no occasion to form an opinion under Section 29(2) of the Competition Act under the circumstances of the case. 5. Whether the process as contemplated under Section 29, subsection (2) having not been completed by the CCI before passing the order dated 15.03.2023, the order passed by the CCI is against the procedure prescribed under Section 29 and deserved to be set aside? The process as contemplated under Section 29 of the Act was complied with since the opinion was given under Section 29(1) of the Act, and had not reached the stage of Section 29(2) of the Act. 6. Whether in spite of Respondent No.2 along with response to Show Cause Notice having offered modification to address the prima facie concern expressed in the said Show Cause Notice as per Regulation 25 (1) (a) of 2011 Regulations, the CCI was obliged to direct the parties to publish details of the combination? The CCI, after issuing show cause notice AGI suggested modification, thereafter CCI approved the combination. Sections 30 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AGI, through the proposed resolution process, if approved by the Adjudicating Authority, would take over HNGIL as a going concern. 19.2. The business of AGI, with the coming into force the implementation of the resolution plan, would have substantial AAEC on the relevant product market in India. The Competition Act prohibits combination, leading to the monopolistic presence of a business entity and dominance over the market, the product, the price, etc., in the relevant product market. 19.3. The RP, therefore, incorporated clauses in the RFRP on the necessity of approval of combination from CCI under the Competition Act before the resolution plan is considered by the CoC. 19.4. The admitted position of the shortlisted resolution applicants is that the proposed takeover of the business entity (HNGIL) would attract a combination, and thus, the approval of the combination is required under the Competition Act. In this factual matrix, the CCI, as a regulatory statutory body, conforms to all the prescriptions of law under sections 20, 29, and 31 of the Competition Act and regulation 19 of Combination Regulations 2011. The CCI examined the details of the acquirer and the target in a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpetition Act. Combination as per the Act takes in its fold instances of acquisitions, mergers and amalgamations 20.2. The three different assimilated business ventures that come within the meaning of combination, and the inter se difference would be the extent of integration in substance. The expression 'parties to combination' used in section 29 is used in its general sense. Regulation 9 of the Combination Regulation 2011 stipulates the obligation to file notice. 20.3. CCI, on receipt of notice in Form I, called upon AGI to file a notice in Form II as the requirements attached to green channel clearance envisaged through Form I were not available to AGI. On 03.11.2022, AGI filed a notice in Form II before the CCI. 20.4. The CCI is an expert body, and the case study of a proposed combination or investigation into any breach of the provisions is examined or investigated depending upon the intricacies recorded by the CCI. In the case on hand, the examination of data by CCI conforms to the requirements of section 20 of the Competition Act. Therefore, there was no occasion to investigate the proposed combination. 20.5. The CCI issued a show cause notice Dt. 10.02.2023 to AGI to sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration of the appeals can be limited to the mandate of section 29 of the Competition Act. Whether the show cause notice is to be issued to the acquirer and also the target company in a case falling under IBC read with Competition Act; and if answered in the affirmative, whether the rival contenders can raise a ground of non-service of show cause notice to the target company; and lastly, whether the approval of combination by CCI based on expert advice warrants interference? IV. DISCUSSION 22. Before proceeding with the discussion, it is important to note that the Judgement does not take into account or consider the Amendments that have been made to the Competition Act which were not notified during the applicable period. 23. Section 29 of the Competition Act 29(1)Where the Commission is of the [prima facie] opinion that a combination is likely to cause, or has caused an appreciable adverse effect on competition within the relevant market in India, it shall issue a notice to show cause to the parties to combination calling upon them to respond [within fifteen days] of the receipt of the notice, as to why investigation in respect of such combination should not be conducted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue a notice to show cause to the parties to the combination, calling upon them to respond within thirty days of receipt of the notice. 23.3. Show cause notice is issued expecting a reply on why an investigation in respect of such a combination should not be conducted. 23.4. A show cause notice in legal parlance means the opportunity given to the addressee to say what his case is, on the prima facie opinion formed for further steps under section 29 are warranted or not. As part of the inquisitorial exercise, the CCI verifies and applies the threshold of precautionary principle to understand whether AAEC in the proposed combination would arise or not. If section 29 is worded such that in all the cases where prima facie opinion is formed, the corollary of forming such opinion leads to calling for the DG's report, directing parties to publish details, then the expression as contained in section 29 would have been different. Section 29(1) of the Competition Act, as worded by the parliament, provides for formation of prima facie opinion, issuance of show cause notice and receiving a reply from the party. The intermediary step of show cause notice and reply provides an opportunity to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, issuing show cause notice and receiving response would not have been contemplated. 27. The show cause notice under section 29(1) is intended to get a response or clarification from the acquirer on the combination which is likely to cause or has caused AAEC within the relevant market in India. The prima facie opinion is required in law to set in motion the show cause notice. The CCI has jurisdiction upon being satisfied with the response as per the scheme of the section to not proceed further. The argument of the appellants would result in the show cause notice being treated as a decision to investigate the Form II application filed for approval of a combination. Under sub-section (2) of section 29, the Commission is of the prima facie opinion that the combination has or is likely to have AAEC. The distinction on the prima facie opinion being formed under sections 29(1) and 29(2) is emphasised thus: Section 29(1) of the Competition Act Section 29(2) of the Competition Act Where the Commission is of the [prima facie] opinion that a combination is likely to cause, or has caused an appreciable adverse effect on competition within the relevant market in India, it shall issue a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order publishing of details, etc. The literal construction of section 29(1) of the Competition Act does not mean that calling for a report is mandatory, even when the CCI is satisfied with a reply/modification suggested by the parties. The CCI, at the stage of section 29(1), having issued a show cause notice, is entitled to objectively consider the reply given by the parties and, if not satisfied, then take the enquiry into the stage of investigation under section 29(1) to (3) of the Competition Act. The findings of NCLAT are taken note of and do not warrant interference. 32. On whether notice to parties to the combination is required or if sufficient notice is given to the acquirer/AGI, NCLAT referred to Regulation 2(f) of Combination Regulations, 2011. CCI, assailing the said finding, contends that the statutory obligation to issue notice to CCI arises under section 6(2) on the acquirer in the case of acquisition and all parties to the combination. Section 6(2) read with regulation 9(1) and (2) of the Combination Regulations 2011, stipulates the obligation to file notice on the parties to the combination. The statutory Forms I and II of Schedule II throw light on the obligation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the challenge. There can be and are differences of opinion but we cannot and will not reconsider the opinion of experts, particularly in matters of economic affairs or other economy related issues unless there is extremely strong reason to do so." 35. Further, in Brahm Dutt v. Union of India, (2005) 2 SCC 431 this Court held that: "[W]hile considering the constitutional validity of Section 8 of the Act observed that the Commission is an expert body which had been created in consonance with international practice. The Court observed that it might be appropriate if two bodies are created for performing two kinds of functions, one advisory and regulatory, and the other adjudicatory. Though the Tribunal has been constituted by the Competition (Amendment) Act, 2007, the Commission continues to perform both the functions stated by this Court in that case. Cumulative effect of the above reasoning is that the Commission would be a necessary and/or a proper party in the proceedings before the Tribunal." 36. The appellants argue that CCI's consideration of AGI's data is inaccurate or lopsided. CCI consists of experts and specialists in different branches of trade, commerce and tech ..... X X X X Extracts X X X X X X X X Extracts X X X X
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