Delhi HC directs competition regulator to review green channel nod for INSCO in HNGIL buyout

Published 2 days ago• 3 minute read

The Delhi High Court on Tuesday gave the anti-Trust regulator Competition Commission of India (CCI) 10 days to decide on packaging manufacturer AGI Greenpac’s plea challenging its fast-track ‘green channel’ approval to Independent Sugar Corp. (INSCO), the Indian arm of Uganda’s Madhvani Group, for acquiring Hindustan National Glass and Industries Ltd (HNGIL).

Justice Sachin Datta’s bench granted relief to AGI Greenpac, whose ₹2,752 crore approved plan was earlier quashed by the Supreme Court due to procedural lapses.

AGI Greenpac approached the high court after the CCI allegedly did not consider its representation challenging INSCO’s approval.

On 4 June, Greenpac wrote to CCI urging it to withdraw the green channel clearance.

Under this route, mergers and acquisitions with no competition concerns receive automatic approval without a detailed review.

Greenpac contended that the approval breached Regulation 5A, which mandates joint filing by all parties seeking green channel clearance, whereas INSCO had filed on its own. It claimed this violation could negatively impact HNGIL and its creditors.

HNGIL, India’s largest container glass manufacturer, entered insolvency in October 2021under the Insolvency and Bankruptcy Code (IBC) after defaulting on loans exceeding ₹2,000 crore.

The insolvency proceedings began in 2018 when HSBC Daisy Investments (Mauritius) Ltd filed a petition against HNGIL over unpaid dues exceeding ₹2,500 crore, leading NCLT Kolkata to admit the case and initiate bankruptcy proceedings.

During the resolution process, AGI Greenpac and INSCO emerged as key contenders. AGI Greenpac’s ₹2,752 crore plan was initially approved by NCLT and later by NCLAT in September 2023. However, INSCO challenged this before the Supreme Court.

On 29 January, the Supreme Court quashed AGI Greenpac’s resolution plan for failing to meet regulatory requirements. It also reversed NCLAT’s order upholding AGI’s plan and directed the CoC to reconsider resolution proposals to ensure full compliance with competition law.

The Supreme Court ruling cleared the way for INSCO to make fresh attempts to acquire HNGIL. INSCO told the court it would match AGI’s cash offer to financial creditors, increasing its total payout to ₹2,752 crore from the original ₹2,395 crore offer, thus enhancing creditor recovery to 58% from 49%.

The HNGIL case has become another example of an approved resolution plan being set aside by the courts on procedural grounds, causing delays and bottlenecks in India’s insolvency landscape. Recently, the Supreme Court also set aside the approved ₹19,000 crore JSW Steel resolution plan for Bhushan Power and Steel on the grounds of illegality in the plan, underscoring systemic hurdles.

In a written reply to the Lok Sabha in December 2024, finance and corporate affairs minister Nirmala Sitharaman informed that insolvency-related matters account for the lion’s share of NCLT’s backlog. As of 31 December 2024, there were 12,351 pending insolvency cases out of a total pendency of 20,484 cases at NCLT. The remaining 8,133 cases were related to the Companies Act, 2013.

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