NCLAT Rejects CCI Approval Challenge as Resolution Plan Exempt Under MCA’s 2024 Notification [Read Order]

The appeal has been filed by Alchemist Asset Reconstruction Company Ltd., the dissenting financial creditor has filed this appeal challenging the NCLT’s order dated 22.01.2025, which approved the resolution plan of OCL Iron and Steel Ltd (successful resolution applicant) and rejected the application of Gateway Investment Management Services Ltd. (unsuccessful resolution applicant).

The Appellant relied heavily on the Supreme Court’s decision in Independent Sugar Corporation Ltd. (decided on 29.01.2025), which held that the approval of CCI under the proviso to Section 31(4) of the Insolvency and Bankruptcy Code (IBC) is mandatory before the Committee of Creditors (CoC) can approve a resolution plan involving a “combination”, as defined under Section 5 of the Competition Act.

The Appellant contended that the combined asset value of the Successful Resolution Applicant (SRA) and the Corporate Debtor exceeded Rs. 2,500 crores, thereby crossing the threshold for “combination” under the Competition Act, and hence, prior CCI approval was necessary.

The Respondent, supported by the Resolution Professional, pointed out that the case was covered by the exemption granted by the Ministry of Corporate Affairs (MCA) via Notification dated 07.03.2024. The notification, issued under Section 54(a) of the Competition Act, exempts mergers, acquisitions, and amalgamations from the purview of Section 5 where the value of assets involved does not exceed Rs. 450 crores or turnover does not exceed Rs. 1,250 crores in India, for a period of two years.

Read More: NCLAT Quashes Resolution Plan for Violating IBC Provisions & Ignoring Government Dues

By going through the balance sheet of the corporate debtor for financial years 2022–23 and 2023–24, the NCLAT found that the asset value stood at Rs. 70.76 crores and turnover at Rs. 13.72 crores, well within the exemption limits. NCLAT held that Section 5 of the Competition Act was not attracted in this case, and there was no requirement to obtain prior CCI approval before CoC approval.

The NCLAT upheld the validity of the Resolution Plan and confirmed that it was exempt from CCI scrutiny under the 2024 MCA Notification.

The tribunal comprising Justice Ashok Bhushan (Chairperson), Arun Baroka (Technical Member), and Barun Mittal (Technical Member) also dismissed the appeal.

The NCLAT upheld the validity of the Resolution Plan and confirmed that it was exempt from CCI scrutiny under the 2024 MCA Notification.Alchemist Asset Reconstruction Company Ltd

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