NCLAT Validates CoC's Decision to Refund AGI Greenpac’s PBG After Supreme Court Voids Resolution Plan for CCI Non-Compliance
- REEDLAW
- 13 hours ago
- 4 min read
Updated: 6 hours ago
The NCLAT validated the Committee of Creditors’ decision to refund AGI Greenpac’s Performance Bank Guarantee (PBG) after the Supreme Court set aside the resolution plan for failure to obtain prior approval from the Competition Commission of India (CCI).
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), while adjudicating a batch of Company Appeals and Interlocutory Applications, held that once a resolution plan is set aside by the Supreme Court for non-compliance with the mandatory requirement of prior approval from the Competition Commission of India (CCI) under the proviso to Section 31(4) of the IBC, all actions taken pursuant to that plan—including the submission of a performance bank guarantee (PBG)—stand nullified. Consequently, the Committee of Creditors’ (CoC) decision to return such PBG is valid and non-reviewable. The NCLAT observed that the CoC acted in accordance with the Supreme Court’s directives and its commercial wisdom, and accordingly, dismissed the operational creditor's challenge as devoid of merit.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising Justice Ashok Bhushan (Chairperson), adjudicated an appeal filed by an operational creditor challenging three orders passed by the NCLT, Kolkata Bench, in Intervention Petition No. 5/KB/2025. The case stemmed from the CIRP of Hindustan National Glass & Industries Ltd. (HNG), which commenced on 21.01.2021. During the process, two resolution plans were submitted—by AGI Greenpac Ltd. and Independent Sugar Corporation Ltd. The Committee of Creditors (CoC) approved AGI Greenpac’s plan with 98% voting on 28.10.2022, followed by issuance of a Letter of Intent and AGI's submission of a Performance Bank Guarantee (PBG). The plan also received conditional approval from the CCI, and the NCLT granted its approval on 28.04.2023.
However, the Supreme Court, by its judgment dated 29.01.2025, set aside AGI’s resolution plan for failure to obtain prior CCI approval before CoC’s vote, as required by the proviso to Section 31(4) of the IBC. The Court directed the CoC to reconsider only those plans that had valid CCI approval as on 28.10.2022. In compliance, the CoC approved the resolution plan of Independent Sugar Corporation Ltd. in its 35th meeting held on 04.02.2025 and decided to refund AGI's PBG. The appellant operational creditor subsequently filed the intervention petition seeking the removal of the Resolution Professional and to set aside CoC’s post-Supreme Court actions. Divergent views by the NCLT Members on this petition led to a referral to a third member, who ruled in favour of the appellant on procedural grounds, culminating in the disposal of the petition on 13.06.2025. The CoC appealed this decision, and in a connected judgment dated 08.07.2025, the NCLAT held that the direction for RP replacement was unsustainable.
In the present appeal, the appellant primarily argued that the CoC wrongly refunded AGI’s PBG despite the Supreme Court's observation that AGI had suppressed material facts before the CCI. The CoC and RP contended that once the Supreme Court had declared AGI’s plan unsustainable and nullified all actions taken pursuant to it, returning the PBG was legally justified. They further argued that the appellant was attempting to obstruct the resolution process, which was being conducted in accordance with Supreme Court directions.
The NCLAT upheld the CoC’s decision to refund the PBG to AGI, finding it to be a direct consequence of the Supreme Court’s ruling. It was observed that the CoC had duly considered the Supreme Court judgment in its 04.02.2025 meeting and had acted in line with the directions to reconsider only eligible resolution plans, of which only Independent Sugar's had valid CCI approval. The Tribunal noted that the Supreme Court had not directed any further inquiry into AGI’s alleged concealment and had based its decision solely on legal non-compliance. As such, the NCLAT ruled that there was no basis for retaining the PBG and dismissed the appeals filed by the operational creditor as misconceived. Pending applications were also dismissed, with no order as to costs.
Mr. Abhijeet Sinha, Mr. Aditya Shukla, Ms. Pratiksha Sharma, Ms. Ritu Chaudhary, Mr. Ayush Jain and Mr. Mukesh Kumar, Advocates, represented the Appellant.
Mr. Krishnendu Datta, Sr. Advocate, with Mr. Vikram Wadehra, Ms. Smriti Churiwal, and Mr. Jaiveer Kant, Advocates, appeared for the Respondent No. 1.
Mr. Arun Kathpalia, Sr. Advocate with Mr. Sidhant Kant and Ms. Gayathri Balasubramanian, Advocates, appeared for the Respondent No. 2/COC.
Mr. Rishav Banerjee, Mr. Utsav Trivedi, Ms. Kiran Sharma, Ms. Nanini Roy, and Ms. Nandini Acharya, Advocates, appeared for the Independent Sugar Corporation Ltd.
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