Vedanta PIL Hits Roadblock as Another SC Judge Steps Aside; Case To Be Heard by Fresh Bench
Moneylife Digital Team 19 September 2025
For the second time this month, a Supreme Court judge has recused from hearing a public interest litigation (PIL) seeking an investigation into alleged financial irregularities, price manipulation, and regulatory violations by Vedanta Ltd (VEDL), Hindustan Zinc Ltd (HZL), and Vedanta Resources Ltd (VRL).
 
On Friday, justice Sanjay Kumar recused himself from the matter which will now be listed before a fresh bench. Earlier, on 8th September, justice K Vinod Chandran had also stepped aside when the case came up before a bench comprising chief justice of India BR Gavai, justice Chandran and justice Atul Chandurkar.
 
The PIL, filed by advocate Shakti Bhatia, relies heavily on a report by US-based short-seller Viceroy Research LLC which, in July, published an 87-page report titled 'Vedanta – Limited Resources'. The report alleged large-scale fraud, financial manipulation and regulatory breaches, accusing Vedanta Resources of functioning as a 'parasite' draining its listed Indian subsidiaries. Among the charges are inflated asset valuations, diversion of funds through related-party transactions, misuse of upstream dividends and opaque corporate structures to obscure liabilities.
 
Advocate Bhatia, the petitioner contends that these allegations, if true, amount to violations of SEBI’s PFUTP Regulations, 2003, and LODR Regulations, 2015, as well as the Companies Act, 2013. He claims to have independently corroborated portions of the Viceroy Research report using MCA21 filings, SEBI disclosures, and registrar of companies (RoC) records.
 
According to the petition, complaints were filed with SEBI, Reserve Bank of India (RBI) and Union ministry of corporate affairs (MCA) in July, but there has been no response. The plea argues that inaction by regulators undermines investor protection, particularly since the government of India holds a 29.54% stake in HZL and a 49% stake in Bharat Aluminium Company (BALCO).
 
“Any irregularities in the operation of the said companies will not only prejudice minority shareholders and the public at large but also jeopardise government funds, causing major repercussions to the economy and government policies,” the PIL states.
 
Vedanta has denied the allegations, earlier securing a legal opinion from former chief justice of India DY Chandrachud, who advised the company could pursue defamation proceedings against Viceroy Research. The company has repeatedly described the short seller’s findings as 'malicious, baseless, and misleading'.
 
With two recusals in quick succession, the PIL’s fate now rests with a newly constituted Supreme Court bench which is expected to take up the matter in the coming weeks.
 
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