UNION OF INDIA Vs. VEDANTA LTD

JUDGEMENT

(1.) Being aggrieved and feeling dissatisfied by the judgment and order of the learned Single Judge dated 31st May, 2018 in W.P.(C) No.11599/2015, the original respondent Nos. 1 and 2 have preferred the present Letters Patent Appeal. Learned Single Judge has vide the impugned judgment allowed the writ petition and directed appellant No.1 herein/ Union of India to extend the tenure of the contract in question for a period of 10 years beyond its current term i.e. 14th May, 2030 on the same terms and conditions as existed on 15th May, 1995, when the contract was initially executed. The contention of the appellants herein, however, was that on extension of the tenure of the contract, the Government of India (hereinafter referred to as 'GoI') is entitled to 10% increase in the share in 'Profit Petroleum' under the Production Sharing Contract. As the learned Single Judge has not accepted the contention of the original respondent Nos. 1 and 2, the present appeal has been preferred.

(2.) Extension of the Production Sharing Contract (hereinafter referred to as 'PSC' for the sake of brevity) dated 15th May, 1995 for Rajasthan Block (RJ-ON-90/1), and the terms of its extension including interpretation of its Clauses, especially Article 2.1, is the core issue for consideration before this Court. For the sake of convenience, original respondent nos. 1 and 2 are collectively referred to as appellants and Directorate General of Hydrocarbons (appellant No.2), wherever required to be separately referred is referred to as DGH. The original petitioners are referred to as petitioners. Petitioner No.1 in the writ petition was Cairn India Ltd. and is now known as Vedanta Ltd. and is respondent No.1 herein. Oil and Natural Gas Corporation Ltd. (respondent No.4) is referred to as ONGC.

(3.) At the outset, it needs to be pointed out that the question involved in this appeal is an extension of a Production Sharing Contract between the original petitioner (Respondent herein) and the Government of India with regard to exploration, exploitation and sale of petroleum and natural gas. The Production Sharing Contract, by its very nature, is a different nature of contract where a private party shares the national wealth / natural mineral by exploiting, excavating and selling the same and gives to the Government of India its share called "profit petroleum". This contract, therefore, cannot be considered as mere regular commercial contract in view of the fact that all such natural resources are held by the Government of India for and on behalf of People of India and as a trustee. Undisputedly, the Hon'ble Supreme Court has read 'public trust doctrine' in case of natural resources which are 'vested' in the Government of India as a trustee.