Securities and Exchange Board of India v. Vedanta Limited & Ors., 2026 INSC 978, decided on 9 September 2026
The Supreme Court of India in Securities and Exchange Board of India v. Vedanta Limited & Ors., 2026 INSC 978, decided on 9 September 2026, clarified the relationship between escrow provisions governing share buybacks and proceedings for fraud under the PFUTP Regulations.
Vedanta Limited had announced a buyback of 17.09 crore equity shares at a maximum price of Rs. 335 per share. It ultimately bought approximately 3.67 crore shares for Rs. 1,225.45 crore. After the buyback period ended, SEBI released the escrow amount under Regulation 15B(8) of the Buyback Regulations. Subsequently, SEBI independently investigated whether the company’s conduct amounted to fraud under the PFUTP Regulations.
The Supreme Court held that release of the escrow does not create immunity from proceedings under the PFUTP Regulations. Regulation 15B(8) is confined to determining whether the escrow is liable to forfeiture and does not adjudicate upon the existence or absence of fraud. Compliance with the conditions for escrow release therefore cannot, by itself, negate an allegation of fraudulent or manipulative conduct.
At the same time, the Court stressed that fraud cannot be established through conjectures or surmises. It must be proved on the balance of probabilities through an objective assessment of reliable evidence and the cumulative circumstances. A suspicious trading pattern alone may not establish fraudulent intent; trading data should be examined alongside contemporaneous instructions, communications, internal records and other corroborative material.
The Court found material discrepancies in the NSE and BSE trading data relied upon by the Adjudicating Officer. Since these factual issues went to the root of the fraud finding, the Supreme Court remanded the matter to the Securities Appellate Tribunal for fresh adjudication.
The judgment establishes a significant principle: escrow release and PFUTP compliance operate in distinct fields, while allegations of securities-market fraud must nevertheless be supported by reliable and legally sufficient evidence.
