Centre can seek 10% more profit from Barmer block: HC

New Delhi, March 26

The Delhi High Court on Friday said the Centre can demand 10% higher share in the profit derived from oil produced by Vedanta from the Barmer oil field in Rajasthan to extend the production sharing contract (PSC) with the company for another 10 years.

A Bench of Chief Justice DN Patel and Justice Jyoti Singh said no embargo can be placed on the right of the government to extend the contract on terms which are at variance with the initial terms of the PSC, “so long as they are in public interest and subserve the purpose of maximising revenue generation”.

The court also said Vedanta does not have the right to demand extension of the PSC on unilateral terms that suit its interest, overlooking the interest of the State, which is a trustee of the natural resources under a Constitutional mandate.

“For all the aforesaid reasons, we hold that there cannot be extension of the PSC unconditionally, on the same terms and conditions which were prevailing 25 years ago i.e. on May 15, 1995, the effective date,” the Bench said.

With these observations, the court set aside a single judge order of May 31, 2018 directing the government to extend the tenure of the contract in question for a period of 10 years, till 2030, on the same terms and conditions as existed on May 15, 1995, when the PSC was initially executed.

The judgement by the bench came on the appeal by the Centre, represented by Solicitor General Tushar Mehta, challenging the single judge’s May 2018 order on Vedanta’s plea for extension of the PSC which the company and the Oil and Natural Gas Corporation (ONGC) have with the government to extract oil from the Barmer block in Rajasthan ONGC had communicated its approval for extension of the PSC in July 2016, after which the Centre had assured the court it would positively take a decision by October of the same year. — PTI

Production sharing pact with Vedanta

• The high court also said Vedanta does not have the right to demand extension of the PSC on unilateral terms that suit its interest, overlooking the interest of the State, which is a trustee of the natural resources under a Constitutional mandate
• There cannot be extension of the production sharing contract unconditionally, on the same terms and conditions which were prevailing 25 years ago, the high court Bench said