CONFLICTION AND COORDINATION BETWEEN THE INSOLVENCY AND BANKRUPTCY CODE (IBC) AND COMPETITION COMMISSION OF INDIA (CCI) IN CORPORATE INSOLVENCY
AUTHOR – ANKIT ATTRAY, LLM STUDENT AT SRM UNIVERSITY, SONIPAT, HARYANA
BEST CITATION – ANKIT ATTRAY, CONFLICTION AND COORDINATION BETWEEN THE INSOLVENCY AND BANKRUPTCY CODE (IBC) AND COMPETITION COMMISSION OF INDIA (CCI) IN CORPORATE INSOLVENCY, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (7) OF 2026, PG. 323-335, APIS – 3920 – 0001 & ISSN – 2583-2344.
Abstract
The interface between the Insolvency and Bankruptcy Code, 2016 (IBC) and the Competition Act, 2002 represents a critical point of convergence within India’s economic regulatory framework, where the objectives of insolvency resolution and market competition intersect, and at times, collide. The IBC was enacted with the primary aim of ensuring a time-bound, efficient, and value-maximizing resolution of distressed corporate entities, shifting control from debtors to creditors and emphasizing commercial decision-making through the Committee of Creditors (CoC). 1 In contrast, the Competition Act seeks to preserve market integrity by preventing anti-competitive practices and regulating combinations that may cause an appreciable adverse effect on competition (AAEC).2 The friction between these two statutes becomes particularly pronounced when resolution plans under the IBC involve mergers, acquisitions, or restructuring transactions that qualify as “combinations” under Sections 5 and 6 of the Competition Act, thereby necessitating prior approval from the Competition Commission of India (CCI).3
The legislative attempt to reconcile this overlap is reflected in Section 31(4) of the IBC, which mandates that resolution applicants obtain approval from the CCI prior to the approval of the resolution plan by the CoC. 4 However, the interpretation and practical implementation of this requirement have generated considerable legal uncertainty. Initially, adjudicatory authorities such as the National Company Law Appellate Tribunal (NCLAT) adopted a pragmatic approach by treating the requirement as directory, thereby allowing post-CoC approval of CCI clearance in order to preserve the strict timelines envisaged under the IBC.5This approach reflected a policy preference for speed and efficiency in insolvency resolution over strict procedural compliance.
The jurisprudential landscape, however, underwent a significant transformation with the decision of the Supreme Court in Independent Sugar Corporation Ltd. v. Girish Sriram Juneja, wherein the Court held that the requirement of prior CCI approval under Section 31(4) is mandatory and must be complied with before the CoC considers and approves the resolution plan.6 The Court emphasized the importance of statutory interpretation, the need for informed decision-making by the CoC, and the avoidance of regulatory uncertainty that could arise from post-facto approvals. While this ruling has clarified the legal position, it has also intensified concerns regarding delays in the Corporate Insolvency Resolution Process (CIRP), potential value erosion of distressed assets, and increased compliance burdens on resolution applicants.
This paper critically examines the nature of the conflict between the IBC and competition law at procedural, substantive, and institutional levels. It argues that the tension between the objectives of speedy insolvency resolution and the preservation of competitive market structures is not merely incidental but structural in nature.7 The absence of a coordinated regulatory framework exacerbates this conflict, leading to inefficiencies, uncertainty, and potential deterrence of prospective resolution applicants. The paper further explores comparative approaches adopted in jurisdictions such as the United States and the European Union, where expedited merger review mechanisms and the “failing firm defence” have been employed to balance competition concerns with insolvency objectives.
In conclusion, the paper contends that while the Supreme Court’s interpretation has brought much- needed clarity, it underscores the urgent need for institutional coordination and procedural innovation. The adoption of fast-track approval mechanisms, pre-filing consultations with the CCI, and the formulation of joint guidelines between insolvency and competition regulators are essential to harmonize the two regimes. A balanced and integrated approach is necessary to ensure that the twin goals of economic efficiency and competitive markets are achieved without undermining the effectiveness of either statutory framework.
Keywords: Insolvency, Competition Law, IBC, CCI, Corporate Insolvency, Jurisdictional Conflict