The National Company Law Appellate Tribunal (NCLAT) has cleared Vedanta’s plan to restructure its power and metal businesses by overturning an order of the National Company Law Tribunal (NCLT) Mumbai bench that had blocked the move.
Background of the Dispute
The case centred on Talwandi Sabo Power (TSPL), part of Vedanta, which had filed a scheme of arrangement before NCLT as part of a wider demerger. The restructuring plan covers four group companies — Vedanta Aluminium Metal, Talwandi Sabo Power, Malco Energy, and Vedanta Iron and Steel — along with their shareholders and creditors.
Sepco Electric Power Construction Corporation, an engineering, procurement, and construction (EPC) contractor for TSPL’s thermal power project, had objected to the demerger plan. Sepco alleged that TSPL and Vedanta failed to disclose a debt of about Rs 1,251 crore arising from EPC disputes, which, it claimed, would have affected the company’s valuation. In March 2025, the NCLT sided with Sepco, citing non-disclosure and procedural irregularities, and rejected the scheme.
Settlement Clears the Way
TSPL challenged the decision before the NCLAT. During the appeal, the company and Sepco reached a settlement. Under the terms, Sepco acknowledged it has no rights or entitlements in relation to TSPL or the scheme, agreed not to raise further challenges, and provided its consent and no-objection for the restructuring to proceed.
On September 15, the NCLAT accepted the settlement, set aside the NCLT’s earlier rejection, and directed the lower tribunal to move ahead with first motion applications, including decisions on convening or dispensing with shareholder and creditor meetings. It also ordered the return of bank guarantees previously furnished by TSPL.
The ruling clears a significant hurdle for Vedanta’s restructuring plan, though further steps now rest with the NCLT.