Supreme Court Orders Vedanta Arm to Pay Rs 127-Crore Power Penalty

Vedanta Limited has informed stock exchanges that its subsidiary Talwandi Sabo Power Ltd. will have to pay nearly Rs 127 crore along with applicable late payment surcharge after the Supreme Court of India ruled in favor of Punjab State Power Corporation Limited in a long-running dispute related to alleged misdeclaration of power availability. The judgment reverses an earlier order issued by the Appellate Tribunal for Electricity and restores the ruling passed by the Punjab State Electricity Regulatory Commission.

In an exchange filing on Thursday, Vedanta said the Supreme Court delivered its order on May 20, 2026, in civil appeals filed by Punjab State Power Corporation Limited (PSPCL) and the Punjab State Load Despatch Centre. According to the filing, the apex court set aside the March 18, 2025 judgment of the Appellate Tribunal for Electricity (APTEL), which had previously ruled in favor of Talwandi Sabo Power Ltd. The court instead restored the findings of the Punjab State Electricity Regulatory Commission (PSERC), thereby allowing the appeals filed by PSPCL.

The dispute relates to allegations that Talwandi Sabo Power Ltd. misdeclared its power availability during January 2017 under provisions of the Grid Code governing electricity supply and scheduling. The Supreme Court upheld the penalty imposed on the company for the alleged violation and directed payment of the amount along with the applicable late payment surcharge. Vedanta stated in its disclosure that approximately Rs 127 crore, excluding the surcharge component, is now payable to PSPCL following the verdict.

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The development is significant for Vedanta because Talwandi Sabo Power Ltd. is currently undergoing a listing process on the Bombay Stock Exchange and the National Stock Exchange of India after the demerger of Vedanta’s merchant power undertaking. Market observers believe the ruling could influence investor sentiment around the upcoming listing, particularly as regulatory and legal compliance remain closely monitored in the energy sector.

Talwandi Sabo Power Ltd. operates a major thermal power plant in Punjab and supplies electricity to the state under long-term agreements. Cases involving power availability declarations are important in the electricity sector because they affect grid management, scheduling commitments, and financial settlements between generating companies and distribution utilities. Regulatory bodies generally impose penalties when companies are found to have provided inaccurate operational data that may affect power procurement or grid stability.

Vedanta’s filing was signed by company secretary and compliance officer Prerna Halwasiya, while the communication from Talwandi Sabo Power Ltd. was signed by company secretary Bhagya Hasija. The company has not yet publicly indicated whether it plans to pursue any further legal remedies following the Supreme Court’s decision. The judgment marks a major regulatory setback for the Vedanta subsidiary and reinforces the authority of electricity regulators and grid management agencies in enforcing compliance within India’s power sector.

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