Case Details
Initial Rejection:
Case Title: Vedanta Limited v. Talwandi Sabo Power Limited and Others
Tribunal: National Company Law Tribunal (NCLT), Mumbai Bench
First Motion Rejection Date: March 4, 2025
Coram: Madhu Sinha (Technical Member) and Reeta Kohli (Judicial Member)
Appeal and Interim Relief:
Appellate Authority: National Company Law Appellate Tribunal (NCLAT), New Delhi
Interim Stay Order Date: May 2025
Condition: Bank Guarantee of ₹1,245 crore in favor of SEPCO
Final Approval:
Tribunal: National Company Law Tribunal (NCLT), Mumbai Bench
Final Sanction Date: December 17, 2025
Coram: Nilesh Sharma (Judicial Member) and Charanjeet Singh Gulati (Technical Member)
Applicable Provisions: Sections 230-232 of the Companies Act, 2013 (Scheme of Arrangement)
Facts of the Case
Vedanta Limited, a diversified metals and mining conglomerate, proposed a major restructuring in 2023 to demerge its Indian operations into five separately listed, sector-focused entities—Vedanta Aluminium, Vedanta Oil and Gas, Vedanta Power, Vedanta Iron and Steel, and a restructured Vedanta Limited retaining zinc and silver businesses. The scheme involved multiple group companies, including Talwandi Sabo Power Limited (TSPL), and was approved by the boards between September and October 2023.
The proposal received no-objection certificates from NSE and BSE in July 2024 and was overwhelmingly approved by shareholders and creditors. However, serious objections arose when SEPCO Electric Power Construction Corporation, a Chinese EPC contractor, alleged concealment of its ₹1,251 crore claim against TSPL. SEPCO argued that exclusion of this liability violated Section 230(2)(a) of the Companies Act and materially prejudiced creditor interests.
On 4 March 2025, the NCLT rejected the first motion application concerning TSPL, holding that material facts had been suppressed. TSPL appealed to the NCLAT, which granted an interim stay subject to Vedanta furnishing a ₹1,245 crore bank guarantee. Subsequently, the parties entered into a settlement agreement in September 2025, resolving the dispute.
Final Judgment and Observations
On 17 December 2025, the NCLT Mumbai Bench sanctioned the composite demerger scheme, noting that regulatory objections had been satisfactorily addressed and that the SEPCO settlement removed the principal impediment. SEBI had already cleared the revised structure, and no statutory authority opposed the scheme at the final stage. The Tribunal emphasized compliance with disclosure norms and stakeholder protection, permitting Vedanta to proceed with one of India’s most significant corporate demergers, aimed at unlocking value through focused, independently governed listed entities.