The Delhi High Court Friday said the Centre can demand 10 per cent 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 D N 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 that 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 May 31, 2018 order had come 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