महत्वपूर्ण निर्णय सारांश
| क्रम संख्या | निर्णय तिथि | वाद शीर्षक/वाद संख्या | विषय | निर्णय सारांश |
|---|---|---|---|---|
| 1 | 29-01-2025 | INDEPENDENT SUGAR CORPORATION LIMITED vs GIRISH SRIRAM JUNEJA C.A. No. 6071/2023 |
Prior approval of the Competition Commission of India (CCI) under Section 31(4) of the Insolvency and Bankruptcy Code (IBC) is mandatory before approval of a Resolution Plan by the Committee of Credit |
INDEPENDENT SUGAR CORPORATION LIMITED V. GIRISH SRIRAM JUNEJA 2025 INSC 124 (Invalid Date) Justices: Justice Hrishikesh Roy, Justice Sudhansu Dhulia, and Justice SVN Bhatti Question(s): (i)Whether the approval of the Competition Commission of India (CCI) for a proposed combination must mandatorily precede the approval of the Resolution Plan by the Committee of Creditors (CoC) under the proviso to Section 31(4) of the Insolvency and Bankruptcy Code, 2016 (IBC)? (ii) Whether the National Company Law Appellate Tribunal (NCLAT) erred in holding that prior CCI approval before CoC approval is only directory and not mandatory? (iii)Whether the Resolution Plan approved by CoC in favour of AGI Greenpac was legally valid despite the alleged lack of statutory approvals at the time of voting? Factual Background: Independent Sugar Corporation Ltd. (INSCO) challenged the approval of a Resolution Plan submitted by AGI Greenpac Ltd. for the acquisition of Hindustan National Glass and Industries Ltd. (HNGIL), a major player in the glass packaging industry. HNGIL, undergoing insolvency proceedings under the IBC, had invited resolution applicants, with both INSCO and AGI Greenpac submitting their respective plans. A key issue arose when AGI Greenpac's Resolution Plan was approved by the CoC on 28.10.2022 with 98% votes, despite lacking prior approval from the CCI. INSCO contended that such approval was mandatory under Section 31(4) of the IBC, especially in cases involving combinations under the Competition Act, 2002. NCLAT ruled that while CCI approval was mandatory, its timing—whether before or after CoC approval—was directory, thus upholding AGI Greenpac's approval. INSCO challenged this ruling before the Supreme Court. Decision of the Supreme Court: A three Judge-Bench of the Supreme Court set aside the NCLAT judgment, holding that prior approval from the CCI before CoC approval is mandatory, not merely directory. The Court ruled that the statutory framework under the IBC and Competition Act requires compliance with the proviso to Section 31(4) IBC, which mandates obtaining CCI approval before a Resolution Plan involving a combination is put to vote. The order of the Court was rendered by a bench of Justice Hrishikesh Roy, Justice Sudhansu Dhulia, and Justice SVN Bhatti. Reasons for the Decision: Plain Meaning of the Proviso to Section 31(4) IBC The Court applied the principle of plain meaning, holding that the statutory language clearly mandates that where a Resolution Plan contains a provision for a combination, CCI approval must be obtained prior to CoC approval (¶35). The legislative intent behind inserting the provision to Section 31(4) of the IBC suggests that prior approval of the CCI was specifically mandated and it should not be seen as a flexible provision to be ignored in certain exigencies. Interpreting it as merely a directory would go against the legislature’s intent. Such a view would weaken the provision and render it ineffective. (¶53). Legislative Intent and Reports Supporting Mandatory Compliance The CCI, under Section 31(3) of the Competition Act and Regulation 25(1)(A) of the Combination Regulations, must approve, reject, or modify a combination before the CoC considers it. This ensures that the CoC, while exercising its commercial wisdom, has complete regulatory information ((¶79-81). Therefore, the approval from CCI must be obtained before the same is approved by the CoC. Otherwise, an illogical situation may arise since any modifications so directed by the CCI, would be kept out of the scrutiny of the CoC and the CoC would be forced to exercise its commercial wisdom without complete information (¶80-81). The Court also examined that when a Resolution Plan containing a provision for a combination that leads to an Appreciable Adverse Effect on Competition (AAEC) is placed before the CoC for approval before securing prior approval from the CCI, the Plan is incapable of being enforced or implemented. Specific consequences in law are provided under the IBC and the Competition Act for the same. As is clear, such a major omission cannot be cured at a later stage. In the present case, the CCI-unapproved Resolution Plan does not pass muster. The same cannot be approved by this Court as it is in violation of Sections 30(2)(e), 30(3), 30(4), and 34(4)(a) of the IBC, thereby contravening provisions of the law for the time being in force (¶86). Harmony between Stipulated Timelines NCLAT held that the proviso to Section 31(4) of the IBC is directory, reasoning that mandatory prior approval from the CoC would disrupt CIRP timelines. The Supreme Court rejected this, emphasizing that statutory provisions take precedence over subordinate regulations and that the IBC and Competition Act timelines generally do not conflict. It noted that CCI typically approves combination proposals within 21 working days, with no recorded instance of approval exceeding 120 days, making concerns over extended delays largely theoretical. The Court also observed that combination applications can be submitted at multiple stages, including the Expression of Interest or issuance of RFRP, rather than waiting until the Resolution Plan stage, ensuring CIRP completion within 330 days. In rare cases involving significant AAEC concerns, delays may occur, but these are due to regulatory processes rather than actions of the parties involved. The recent Competition (Amendment) Act, 2023, reducing CCI approval timelines, further supports the feasibility of completing insolvency proceedings within statutory limits. Therefore, the Court found no substantial basis for interpreting the provisions disjunctively, as done by the NCLAT (¶87-99). CoC's Role and Procedural Lapses in AGI Greenpac’s Plan Approval The Supreme Court examined the procedural lapses in the approval process of the AGI Greenpac-HNGIL combination under the Competition Act, emphasizing that prior CCI approval is mandatory before a transaction is finalized. The CCI had initially found AGI Greenpac’s Form I submission incomplete and directed the submission of a detailed Form II, eventually granting approval with voluntary modifications, including the divestment of an HNGIL plant (¶119). However, a key procedural lapse occurred when the CCI failed to issue a mandatory Show Cause Notice (SCN) to HNGIL, the target company, as required under Section 29(1) of the Competition Act, limiting its ability to participate in the review process. The law mandates that all parties to a combination, including the acquirer and the target, must be notified of potential competition concerns to ensure transparency and fairness (¶124-125). The Court further noted that the Competition Act requires a structured fact-finding process, including stakeholder consultations, which was not adequately followed in this case. The failure to properly scrutinize and notify all relevant parties before approving the combination raised concerns about whether market competition was sufficiently protected (¶129). Additionally, the Court highlighted that Regulation 25(1A) of the Combination Regulations mandates that any voluntary modification to a combination, such as divestment, must have the approval of both the acquirer and the target company to protect stakeholder interests. This requirement is not a mere procedural formality but a substantive safeguard, ensuring that modifications do not undermine the operational and structural integrity of the target company. In this case, the proposed divestment of the target’s plant was a crucial part of its revival under the IBC, making the target company’s active participation essential for compliance with both insolvency and competition laws. Given these deficiencies, the Court emphasized that the lack of participation by the Target in the voluntary modification process, especially where the modification entails the divestment of their assets, vitiates the approval granted by the CCI and warrants remedial intervention by this Court (¶136-139). Justice SVN Bhatti’s Dissenting Opinion: Literal vs Purposive Interpretation (¶¶ 37-42) Justice Bhatti analyzed the principle of literal interpretation, stating that statutory words must be given their ordinary meaning unless such an approach results in absurdity or contradicts legislative intent (¶38). He cited Madhav Rao Scindia vs Union of India (AIR (1971) SC 530), emphasizing that words can have multiple shades of meaning, requiring interpretation in context (¶39). Referring to Corp of the City of Victoria vs Bishop of Vancouver Island (AIR (1971) SC 530), he explained that purposive interpretation is necessary to avoid inconsistency and ensure statutes remain workable (¶41). He held that rigid literalism should not obstruct the IBC’s objective of efficient insolvency resolution (¶42)?. Interpretation of Section 31(4) and its Proviso (¶¶ 52-55) Justice Bhatti examined the amendments introduced by Act 26 of 2018, particularly the insertion of the proviso to Section 31(4). He noted that the IBC was designed to enhance India’s business environment, and the amendment aimed to clarify that Competition Commission of India (CCI) approval must be obtained before CoC approval (¶52). However, he reasoned that external aids such as explanatory notes and legislative history should be considered only after analyzing the provision's language and intent (¶54). He referred to Essar Steel India Ltd. (2020) 8 SCC 531) to highlight the importance of CoC’s commercial wisdom and the Adjudicating Authority’s role in ensuring statutory compliance (¶55)?. Timing of CCI Approval and Effect on Resolution Applicants (¶¶ 65-66) Justice Bhatti emphasized that while CCI approval is essential before final adjudication under Section 31, its absence at the CoC approval stage does not invalidate the resolution plan. He pointed out that mandating CCI approval before CoC voting could exclude viable applicants and hinder competition, thereby reducing asset value maximization (¶65). He held that the phrase “prior to” in the proviso to Section 31(4) is a temporal expression that should be interpreted flexibly, allowing CCI approval to be obtained before Adjudicating Authority approval rather than at the CoC stage (¶66)?. Judicial Precedents and the Role of Adjudicating Authority (¶¶ 78-81) Justice Bhatti referred to NCLAT rulings in ArcelorMittal (2019 SCC OnLine NCLAT 920), Vishal Vijay Kalantari (2021 SCC OnLine SC 3243), and Makalu Trading Limited (2020 SCC OnLine NCLAT 643), where it was held that Section 31(4) is directory. He asserted that commercial wisdom of the CoC should not be constrained by regulatory conditions that can be addressed later in the process (¶78). He concluded that the consequences of non-compliance with combination approval requirements should be assessed at the Adjudicating Authority stage, ensuring adherence to both the IBC and Competition Act without disrupting the resolution process (¶79-81)? The Supreme Court ruled that prior approval of the CCI is mandatory before the CoC considers a Resolution Plan involving a combination. It held that the approval of AGI Greenpac’s Resolution Plan was legally invalid, as it lacked CCI clearance at the time of CoC approval. The Court remanded the matter to the NCLT to reconsider the Resolution Plans in compliance with statutory provisions. Prepared by Iram Jan Communications Division| Supreme Court of India © Supreme Court of India |
| 2 | 20-01-2025 | JYOSTNAMAYEE MISHRA vs THE STATE OF ODISHA SLP(C) No. 13984/2023 |
Promotion cannot be claimed to posts meant for direct recruitment. Public advertisement is mandatory, and Article 14 does not permit claims based on past illegal appointments or negative equality. |
JYOSTNAMAYEE MISHRA V. THE STATE OF ODISHA 2025 INSC 87 (Invalid Date) Justices: Justice J.K. Maheshwari, Justice Rajesh Bindal Question(s): (i) Whether an employee can claim promotion to a post that is exclusively meant for direct recruitment? (ii) Whether a government department can fill a direct recruitment post through internal circulars instead of public advertisement? (iii) Whether previous instances of wrongful promotions justify granting similar relief to the petitioner under Article 14 (Right to Equality)? Factual Background: In 1978, the respondent-State appointed the petitioner, Jyostnamayee Mishra, as a Peon. On 7 January 1999, she submitted a representation seeking appointment as a tracer. She filed O.A. No. 628(C) of 1999 with the Orissa Administrative Tribunal (Tribunal) while the representation was still pending. During the admission stage, the Tribunal instructed the respondent to make a decision regarding her representation within three months. The State responded by informing the petitioner in a letter dated 5 July 1999, that the position of Tracer will be filled by direct recruitment and was not a promotional position. In spite of this, the petitioner claimed discrimination in promotions in a subsequent application, O.A. No. 1126(C) of 2002. Later, the case was moved to the Principal Bench of the Tribunal in Bhubaneshwar, where it was renumbered as O.A. No. 742 of 2009. On 27 September 2010, the Tribunal ordered the State to take into account her and other Class-IV employees' applications for promotion to Tracer in the event of future openings. However, the petitioner's request was rejected on 23 November 2010 due to a recruitment ban by the Finance Department. In a third round of litigation (O.A. No. 1696 of 2010), the Tribunal, on 8 January 2016, ordered her appointment as a Tracer and, if no vacancy was available, directed reversion of the last person promoted. The State’s Review Petition (R.P. No. 28 of 2016) was dismissed on 28 February 2017. Challenging these orders, the State filed W.P. No. 18463 of 2017 before the Orissa High Court, arguing that the petitioner was ineligible under the Works Department’s Letter No. 4775 dated 26 February 1980. As the retiral benefits had been extended to the petitioner for the post of Peon, the High Court disposed of the Writ Petition accordingly. Aggrieved by this decision, she approached the Supreme Court. Reasons for the Decision: Promotion cannot be claimed to a post that is exclusively meant for direct recruitment The Supreme Court ruled that it would be against the law and fair selection principles for an employee to seek promotion to a position intended only for direct recruitment. In this instance, all Tracer positions were to be filled solely by direct recruitment, per Rule 5(1)(e) of the Orissa Subordinate Architectural Service Rules, 1979. Tracer was excluded from Rule 6, which governs promotions, indicating that there was no promotional pathway. The Court underlined that previous erroneous promotions did not establish a precedent and that legislative norms supersede administrative practices. Article 16 of the Constitution, which guarantees equal opportunity in public employment, would be violated if such claims were permitted. The petitioner lacked a legitimate reason for promotion and did not qualify for direct recruitment. The Court ruled that deviating from prescribed recruitment methods undermines transparency and fairness. As promotion was not a legally sanctioned route, her claim was dismissed as meritless. A direct recruitment post cannot be filled through internal circulars instead of public advertisement The Supreme Court decided that it is against the constitution and the statutory requirements for a government agency to use internal circulars rather than public advertisements to fill a position that is intended for direct recruitment. According to Rule 7 of the Orissa Subordinate Architectural Service Rules, 1979, public advertisements in media and the Orissa Gazette must be published prior to a competitive test that is used for direct recruitment. The Court underlined that fair and transparent selection is necessary to ensure equal opportunity in public employment, as guaranteed by Article 16 of the Constitution. The Court reaffirmed that appointments must be made through an open selection procedure, citing its judgment Union Public Service Commission v. Girish Jayanti Lal Vaghela (2006 INSC 58). Eligible candidates are excluded from the public by sending out internal circulars and only accepting applications from current employees, rendering the procedure arbitrary and unconstitutional. Since the department failed to follow the mandatory recruitment procedure, any appointments made through internal circulars were deemed illegal and invalid. The Court upheld that government jobs cannot be filled secretly or arbitrarily, reinforcing merit-based selection as a fundamental principle. Previous instances of wrongful promotions does not justify granting similar relief to the petitioner under Article 14 (Right to Equality) The Supreme Court held that as the Constitution does not recognize negative equality, the petitioner should not be granted equivalent remedies under Article 14 based on prior illegal promotions. The petitioner contended that she was entitled to the same benefits as two other Peons who had been elevated to the position of Tracer. The Court, however, dismissed this argument, stating that one instance of illegality does not give others the right to allege similar unlawful conduct. Citing R. Muthukumar v. TANGEDCO (2022 INSC 157) and Basawaraj v. Special Land Acquisition Officer (2013 INSC 551), the Court reaffirmed that Article 14 ensures just and lawful treatment, not the repetition of past errors. The court further emphasized that permitting such claims would penalize persistent statutory rule violations, undermining good governance and merit-based hiring. Since the 1979 Rules did not allow promotions to the Tracer post, providing relief based on previous erroneous appointments would only make the situation more unlawful.Therefore, the Court ruled that wrong precedents cannot be used to demand unlawful benefits, and the petitioner’s claim was rightfully dismissed. Case Materials: JYOSTNAMAYEE MISHRA V. THE STATE OF ODISHA 2025 INSC 87 (20 January 2025) |
| 3 | 02-01-2025 | URMILA DIXIT vs SUNIL SHARAN DIXIT C.A. No. 10927/2024 |
Right of a senior citizen to claim back their transferred property under the Section 23 of the Maintenance and Welfare of the Parents and Senior Citizens Act, 2007 |
URMILA DIXIT V. SUNIL SHARAN DIXIT 2025 INSC 20 (2 January 2025) Justices: Justice Sanjay Karol and Justice Chudalayil T. Ravikumar Question(s): (i) Whether a property transferred by senior citizens by gift or any other medium can be claimed back under the Section 23 of the Maintenance and Welfare of the Parents and Senior Citizens Act, 2007 (“the Act”). (ii) Whether the authorities under the Section 23 of the Act can order eviction from the property and grant the possession to the concerned senior citizens. Factual Background: Section 23 of the Act states that if the person who received property fails to take care of the giver, the transfer can be canceled, as if it were obtained by fraud or force. A Gift Deed was executed by the mother in favour of her son on 7 September 2019 of the property which she had purchased on 23 January 1968. The Deed stated that the son would maintain the mother and the same was registered on 9 September 2019. Allegedly, the same day a vachan patra/promissory note was executed by the son stating that he will take care of the mother and father till the end of their life and if he does not do so, the mother will be at liberty to take back the Gift Deed. On 24 December 2020 the mother filed an application under the Section 23 of the Act before the Sub Divisional Magistrate alleging attacks by the son regarding the further transfer of property, and sought cancellation of the Deed as there was no love and affection left between the parties. This application was allowed by the Sub Divisional Magistrate and the deed was declared null and void (not valid in law). However, the son preferred an appeal which was dismissed on 25 April 2022 by the Collector. Subsequently, the son filed a writ petition before the High Court of Madhya Pradesh. A Single-Judge Bench upheld the order of the Collector and dismissed the writ petition. The son then filed a writ appeal, and a Division-Bench of the High Court reversed the order of the Single-Judge and found the deed valid. Consequently, the mother filed an appeal in the Supreme Court. Decision of the Supreme Court: A Two-Judge Bench of the Supreme Court upheld the decision of the Single-Judge Bench of the High Court and the authorities below and cancelled the Gift Deed because the conditions in the gift were not complied with. The Court also ruled that the authorities while exercising jurisdiction under the Section 23 of the Act can order possession to be transferred. The judgment of the Court was authored by Justice Karol. Reasons for the Decision: Liberal interpretation of the Act The Supreme Court held that the objective of the Act is to empower senior citizens to secure their rights promptly when they transfer a property subject to the condition of being maintained by the transferee (¶25). The Court referred to K. H. Nazar v. Mathew K. Jacob, (2019 INSC 1100), in which it was held that the provisions of a beneficial legislation have to be interpreted with a purpose-oriented approach and the problem that a statute was designed to remedy should first be identified and then a meaning that resolves the problem should be adopted (¶9). The Supreme Court ruled that the Statement of Object and Reasons and Preamble of the Act embodies the intent of the Act which is to ensure effective maintenance and welfare of parents and senior citizens, guaranteed and recognised under the Constitution (¶12). Therefore, the Act is a beneficial legislation aimed at securing the rights of senior citizens in view of the challenges faced by them and must be given a liberal meaning to it (¶14). The Court observed that it is the social obligation of the children to maintain their parents when they need them and it is bound by the Constitution to advance the cause of social justice pertaining to maintenance of parents or wife (¶¶15-16). Application of Section 23 of the Act The Supreme Court, after scrutinizing the Gift Deed and Promissory Note, held that the two ingredients necessary for the application of the Section 23, as propounded in Sudesh Chhikara v. Ramti Devi, (2022 INSC 1257), i.e., the transfer should have a condition attached to it regarding maintenance and basic needs, and the transferee has failed to provide such amenities and physical needs to the transferor, were fulfilled in the present case. The Supreme Court thus held that both documents had a condition of maintenance of the mother by the son, which was not honored (¶¶ 20-23). The Supreme Court held that the purpose of the Act is to provide speedy, simple, and inexpensive remedies for the elderly, and therefore the authorities under the Section 23 of the Act have the power to order eviction and grant possession of the property to the concerned senior citizens (¶24). Prepared By: Rudrakshi Sharma (Intern) Centre for Research and Planning, Supreme Court of India |