Delhi HC to Central government: Formulate policy on PSC with Cairn India within two months

The Delhi High Court refused to grant time to the central government saying if has not framed a policy since 2009 when Cairn had sought extension till date, "it won't happen in three months".

By: PTI | New Delhi | Published: November 7, 2016 5:02 pm
production sharing contract, Vedanta group, PSC, Delhi High Court,Rajasthan block, Justice Sanjeev Sachdeva, ONGC, latest news, India news, latest news, India news, The Central government had moved an application on Monday saying that it needed three more months to formulate it’s policy regarding production sharing contract (PSC) with other companies. (File)

Delhi High Court on Monday directed the government to positively take a decision within two months regarding extension of a production sharing contract (PSC) it has with Cairn India, a subsidiary of UK-based Vedanta group, to produce oil from a Rajasthan block till 2020.

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Justice Sanjeev Sachdeva directed the Centre to arrive at a decision by January 6, 2017, with regard to Cairn’s request for extending till 2030, the PSC that the company and Oil and Natural Gas Corporation (ONGC) have with the government, and listed the matter for hearing on January 9, 2017.

The court, however, made it clear that the decision has to be taken without linking it with the policy being contemplated by the government regarding PSCs with other companies which too are up for extension.

The order came on the government’s application seeking three more months, till January 31, 2017, to come up with an uniform policy regarding extension of PSCs.

Observing that each PSC was different and they cannot be clubbed together, the judge asked the government to take a decision in terms of the court’s December 14, 2015 order, as per which ONGC had six weeks to decide whether the contract needed to be extended and within three months after that the Centre was to have taken a decision.

ONGC had communicated its approval for extension of PSC on July 28 this year after which the Centre had assured the court it would positively take a decision by October 14.

On Monday, the Centre moved an application saying it needed three more months as it was formulating a policy.

The court refused to grant time saying if the government has not framed a policy since 2009 when Cairn had sought extension till date, “it won’t happen in three months”.

Cairn, represented by senior advocate C A Sundaram, opposed the Centre’s plea saying it had sought extension of PSC back in 2009 and it was 2016 now and delay in a decision was preventing it from infusing further investment to the tune of Rs 30,000 crore and more in the project.

It said funds were in the pipeline and further delay would affect its standing with international lenders.

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