Power To Litigate Seems Unlimited: Supreme Court Imposes ₹10L Costs On Reliance Industries For Delay In 20-Yr-Old Commercial Suit

The appeal before the Apex Court was filed against an order of the Bombay High Court in a Commercial Suit redacting certain portions of the Examination-in-Chief affidavit (first evidence affidavit) and Examination-in-Chief affidavit (second evidence affidavit) of defendant witness B.K. Ganguly.

The Division Bench of Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe stated, “The following facts would reveal that the power of the RIL to litigate and obstruct progress of the suit seems unlimited. 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. This litigation has multiple seasons laden with many episodes.”

“For the reasons stated above, the appeal is dismissed with costs quantified at Rs. 10 lakhs payable by the appellant-RIL to Supreme Court Advocates on Record Association. The amount shall be paid within a period of five weeks from today”, it ordered.

Senior Advocate Abhishek Manu Singhvi represented the Appellant while Solicitor General Tushar Mehta represented the Respondent.

Factual Background

The National Thermal Power Corporation Ltd. (NTPC Ltd.), plaintiff in the suit, published a Request for Qualification (RFQ) inviting prospective bidders to submit proposals for supply of natural gas to its power plants. The Appellant, Reliance Industries Ltd. (RIL), submitted its financial proposal following which a Letter of Intent (LOI) was issued by NTPC to RIL, which was accepted by the latter subject to the terms of the draft Gas Sale and Purchase Agreement (GSPA) to be negotiated and finalised. Due to non-compliance with the obligations arising out of the LOI, NTPC Ltd. filed a suit for declaration that there exists a binding contract for supply of natural gas. A suit for specific performance of contract for supply of 132 trillion BTU of natural gas for a period of 17 years was filed on the premise that the terms of contract incorporated in the LOI were unconditionally accepted by RIL.

After two rounds of litigation, the High Court held that the evidence relating to notings/correspondences (Documents 1 and 3 to 18) was concerned; the same was irrelevant and documents were not to be taken on record. The High Court allowed the Chamber Summons only to the extent of granting leave to RIL to produce documents listed at Items 2, 19 to 21 and 22 to 24 in the Schedule of Chamber Summons. RIL challenged the order by filing a Special Leave Petition, which came to be dismissed as withdrawn. NTPC filed a Special Leave Petition challenging the earlier orders. The Apex Court allowed the appeals and set aside the judgment of the High Court, permitting oral evidence to be adduced with respect to the content of documents or correspondence already held irrelevant. Following the mandate, the High Court proceeded to examine portions of the first and the second Evidence. In both the Evidences, some paragraphs were retained and some paragraphs were redacted.

Reasoning

The Bench noted that an attempt was made to reopen the whole issue by referring to Section 60 of the Indian Evidence Act, 1872, concerning the leading oral testimony, and it was also submitted that the High Court had exceeded its jurisdiction in redacting certain portions of the affidavit. The Bench was of the view that the High Court was fully justified in arriving at its conclusions. “We have no hesitation in upholding the judgment and order of the High Court”, it added.

The Bench noted that the suit filed by NTPC way back in 2005 had not progressed much and at every stage there was obstruction. The Bench stated that Stage-1 relating to chamber summons for discovery and inspection took 4 years to conclude. Stage-2 relating to chamber summons for production of internal documents took more than a year, and Stage-3 relating to redaction of inadmissible statements commencing from 2016 concluded with the judgment of this Court in 2019, took a full three years.

“The implementation of the direction of this Court could have been concluded with the order of the High Court dated 22.08.2024 but the appellant filed the present appeal which we are dismissing today. In all, two decades have passed by and the suit is still at the stage of evidence”, it stated.

The Apex Court, on multiple occasions, had directed the suit to be taken up and disposed of expeditiously. Considering that 7 years have passed since the Court directed the suit to be disposed of in nine months, the Bench held, “It is compelling for us to reiterate such a direction and request the High Court to take up and dispose of the suit as expeditiously as possible. High Court will take note that permitting a party to a suit to prolong the litigation is also a sad reflection of the way courts conduct their proceeding.”

The Bench thus concluded the matter by imposing costs quantified at Rs 10 lakh payable by the appellant-RIL to the Supreme Court Advocates on Record Association.

Cause Title: Reliance Industries Limited v. NTPC Limited (Neutral Citation: 2026 INSC 862)

Appearance

Appellant: Senior Advocates Abhishek Manu Singhvi, Shyam Divan, 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, Suvasita Chopra, AOR M/S. Parekh & Co.

Respondent: Solicitor General Tushar Mehta, Advocates Rishir Daulat, Bindu Saxena, Digvijay Dam, Aparajita Swarup, AOR Shailendra Swarup

Click here to read/download Judgment