Regulation Of Combinations By Competition Commission Of India And Corporate Insolvency Resolution

Sumit Kumar Malviya, Maharashtra National Law University, Nagpur

INTRODUCTION

In India, the Competition Act 2002 (hereinafter “Act”) follows the philosophy of fostering competition and protecting markets in India from anti-competitive actions. However, in any market, a firm may find it difficult or unable to deliver its goals, and business activity can fail, resulting in default in repayment of debts. This default is a legitimate result of a firm’s business operations and may result in insolvency. However, the revival of all insolvent firms in a market isn’t always possible. In such a case firms may look for means to restructure a defunct firm and work towards its revival. This puts into effect the operation of the Insolvency and Bankruptcy Code 2016 (hereinafter “I&B Code” or “Code”) works as a market-directed regulation offering a time-bound resolution mechanism. Consequently, the use of mergers/amalgamations or acquisitions may be done to revive such an insolvency enterprise in the Code. In such a case, the regulations concerning “combinations” become relevant as many times resolution plans can include combinations as a part. While the Competition Commission of India (hereinafter “CCI”) is the entrusted body to overlook the approval of combinations the Act and the I&B Code need to work in coordination.

In this article, the author explores the interplay between the Act and the I&B Code when it comes to approval of combinations in a resolution plan. The article examines the theory and concept behind such an interaction and determines the viability of the green channel route for approving combinations. The author concludes and recommend the ideal mechanism which must be followed to obtain combination approvals from CCI for combinations arising out of Corporate Insolvency Resolution Process (hereinafter “CIRP”).