NEW DELHI : The Delhi High Court on Wednesday ordered maintenance of status quo on the Union government's decision denying extension of a Production Sharing Contract (PSC) held by Vedanta Limited and directing the takeover of the offshore oil and gas block by Oil and Natural Gas Corporation (ONGC).
The direction was passed by Justice Amit Sharma while hearing Vedanta's writ petition challenging the Ministry of Petroleum and Natural Gas' order dated September 19, 2025.
Vedanta has approached the court assailing the Centre's rejection of its application seeking a 10-year extension of the PSC for the CB/OS-2 offshore block off the Gujarat coast, originally executed in 1998.
The impugned order not only refused an extension but also directed Vedanta to cease petroleum operations immediately and to hand over the custody and assets of the block to ONGC. The company has contended that the decision was arbitrary, contrary to the government's 2017 Policy for Extension of Pre-NELP PSCs, and was issued without granting it a meaningful opportunity for a hearing, even though its extension application was filed within the prescribed timeline in June 2021
On behalf of Vedanta, senior advocate Mukul Rohatgi argued that the application for extension remained pending for years and, even after the expiry of the original PSC term in June 2023, the Centre granted multiple interim extensions permitting Vedanta to continue operations.
It was submitted that the grounds relied upon in the rejection order such as alleged audit objections, short-payment of profit petroleum, and other outstanding dues were never raised earlier and were introduced in 2025, in violation of principles of natural justice. Vedanta has also questioned the legality of directing an abrupt takeover of complex offshore operations without following due process of law.
The Union government opposed the petition, raising a preliminary objection on maintainability. Represented by Attorney General for India R. Venkataramani, along with Central Government Standing Counsel Ashish K. Dixit, the Centre argued that the PSC had expired and was determinable in nature, and therefore could not be enforced through a writ petition.
Through the Directorate General of Hydrocarbons (DGH), the government maintained that the dispute was purely contractual and that Vedanta had no vested legal or constitutional right to seek extension of the PSC.
Emphasising that the State holds natural resources in public trust, it was argued that judicial review of such commercial and policy decisions is necessarily limited.
ONGC, represented by Additional Solicitor General Chetan Sharma, supported the Union's position and justified the direction to take over operations based on alleged defaults and the expiry of the contractual term.
After hearing the parties, the High Court directed that the existing state of affairs be maintained, effectively staying the operation of the Centre's rejection order and the proposed handover of the offshore block to ONGC, until further orders.