The complexity of an active distribution system with distributed generation (DG) is increasing day-by-day. Therefore, a reliable protection system is very necessary to satisfy customer demand. Apart from main grid supply, active sources are also available near load centers due to which traditional protection schemes fails to function properly. The magnitude of fault current during grid connected mode of microgrid, is much higher than islanded operation. Therefore, in most of the previous works, overcurrent protection crashes if its pickup current value is not changed when microgrid is shifted to islanded mode. In this paper, the current, voltage and frequency data sampled through PMU is processed to protect the system in both the operating modes. A centralized protection scheme is employed that takes frequency data and voltage phasor to differentiate between islanding and fault condition. Further, it detects the faulted feeder and sends trip command to respective relays within a tolerant time. This method is devised to work as backup protection when main utility grid is available. However, it can work as a primary protection during islanded mode, when local overcurrent relay fails to operate due to settings based on grid connected mode. A standard IEEE 15 bus system modeled in EMTP-RV is taken as test system for every analysis.