Unlimited power, resources to litigate: Supreme Court slams Reliance for obstructing 20-year-old case; slaps ₹10 lakh costs

The Supreme Court on Friday imposed costs of ₹10 lakh on Reliance Industries Limited (RIL) while dismissing its appeal in a two-decade-old suit filed by NTPC Limited over the supply of natural gas [Reliance Industries Limited v. NTPC Limited].

A Bench of Justices PS Narasimha and Alok Aradhe criticised RIL for repeatedly raising objections that prevented the commercial suit from proceeding beyond the evidence stage.

“There is no dearth of financial resources, no obligation to aid and assist the court to cope with pending backlog of cases, perhaps it is lucrative for RIL to raise some objection or the other at every stage and when the trial court rejects it, the appellate and special leave jurisdictions open up,” the Court said.

The facts of the case would reveal that Reliance Industries appeared to have unlimited power to litigate and obstruct the progress of the case, the Bench stated.

“This litigation has multiple seasons laden with many episodes,” the judgment added.

NTPC had invited bids for the supply of natural gas to its power plants. RIL submitted a financial proposal, following which NTPC issued a letter of intent in June 2004. RIL accepted it subject to the terms of a draft gas sale and purchase agreement being negotiated and finalised.

NTPC later filed a suit seeking a declaration that a binding contract existed for the supply of 132 trillion British thermal units of natural gas over 17 years. It alleged that RIL had failed to comply with its obligations under the letter of intent.

The present appeal concerned the Bombay High Court’s August 2024 decision to remove portions of two affidavits filed by RIL witness BK Ganguly. The redacted portions referred to internal emails, meetings and communications that had previously been held to be irrelevant in deciding whether the parties had concluded a contract.

In February 2019, the Supreme Court had ruled that RIL could not introduce through oral testimony the contents of internal documents that had already been excluded from evidence.

Following that ruling, the High Court examined the affidavits paragraph by paragraph and redacted material that fell within the Supreme Court’s prohibition.

This led to the present appeal before the apex cout.

The Supreme Court found that the High Court had neither misunderstood nor incorrectly applied its earlier directions.

The Bench also rejected RIL’s attempt to reopen the question by relying on Section 60 of the Indian Evidence Act concerning oral evidence. It noted that the same argument had already been considered in 2019.

“This is exactly the argument that was advanced before this Court,” the Bench said.

The Court added that it was neither in a position nor inclined to revisit its February 2019 ruling.

The Bench noted that the suit, instituted in 2005, remained at the evidence stage after two decades.

“At every stage there has been obstruction,” the Court observed.

Proceedings concerning discovery and inspection took four years. Disputes over the production of internal documents consumed more than a year, while litigation concerning the redaction of evidence continued for another three years. Even after the High Court implemented the Supreme Court’s directions in August 2024, RIL filed the present appeal, the Court noted.

In 2019, the Supreme Court had expressed shock that the trial had been delayed “for no good reason” and directed its completion within nine months. Seven years since passed.

“Permitting a party to a suit to prolong the litigation is also a sad reflection of the way courts conduct their proceedings,” the Court said.

In light of the above, the Supreme Court asked the Bombay High Court to dispose of the suit as expeditiously as possible. It also directed RIL to pay ₹10 lakh to the Supreme Court Advocates-on-Record Association within five weeks.

RIL was represented by Senior Advocates Abhishek Manu Singhvi and Shyam Divan, along with advocates Sameer Parekh, Sonali Basu Parekh, Rubin Vakil, Ishan Nagar, Avishkar Singhvi, Rishit Badiani, Ashwin Dave, Ketan Dave, Gaurav Gangal, Abhishek Thakral, Ruchi Krishna Chauhan, Aditi, Nidhiram Sharma, Adith Deshmukh and Suvasita Chopra. Parekh & Co. was the advocate-on-record.

NTPC was represented by Solicitor General Tushar Mehta along with advocates Rishir Daulat, Bindu Saxena, Digvijay Dam, Aparajita Swarup and Shailendra Swarup.

[Read Judgment]