CUHL then moved to the Securities Appellate Tribunal (SAT) against the SEBI order, which then asked the capital market regulator to reconsider the complaint. The tribunal in its observation said, “if the company, namely, Cairn India had violated the provisions of the Companies Act in not releasing the dividend when there was no embargo upon it, it is SEBI's duty to inquire into the alleged violation and if it exists take action against the said company and, if necessary, under Section 124 of the Companies Act. This aspect has not been considered by SEBI.”

Following the SAT directions, SEBI re-examined the CUHL complaint and informed that allegations of violation of Section 127 of the Companies Act, 2013 and Regulation 4(2)(c) of the SEBI by CIL are not established in an order dated December 26, 2019.

CUHL again filed a petition before the SAT against the SEBI order where the tribunal directed the regulator to initiate an enquiry under Section 11(4)(A) of the SEBI Act and hold an enquiry in the prescribed manner, investigate the violations of the Companies Act, LODR Regulations, etc., and take it to its logical conclusion within six months.

Following this, the SEBI appealed before the Supreme Court of India against the SAT order, seeking extended time for completing the enquiry.

In compliance with directions of the SAT and the Supreme Court, the SEBI investigated to ascertain whether CIL had violated the norms by withholding the dividends payable to CUHL during the period January 22, 2014 to June 20, 2017.

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Vedanta shares fall 3% on SEBI order to pay ₹77.6 cr to Cairn UK; board barred from market