The Supreme Court of India on Friday imposed a ₹10 lakh penalty on Reliance Industries Limited (RIL) as it dismissed the company’s appeal in a longstanding legal dispute with NTPC Limited regarding natural gas supply. The case, Reliance Industries Limited v. NTPC Limited, has been ongoing for two decades.
Supreme Court’s Rebuke
A bench comprising Justices PS Narasimha and Alok Aradhe delivered the judgment, expressing disapproval of RIL’s persistent objections which have stalled the case from advancing beyond the evidence stage. The court noted RIL’s apparent limitless capacity to litigate, which has obstructed the legal process. Justice Narasimha commented on RIL’s strategy, stating, “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.”
Case Background
The matter originated when NTPC invited bids for natural gas supply to its power plants, resulting in RIL submitting a financial proposal. NTPC issued a letter of intent in June 2004, which RIL accepted, subject to negotiations on a gas sale and purchase agreement. NTPC subsequently filed a suit seeking a declaration of a binding contract for the delivery of 132 trillion British thermal units of natural gas over 17 years, alleging that RIL failed to meet its obligations under the letter of intent.
Legal Proceedings
The current appeal addressed the Bombay High Court’s 2024 decision to redact parts of affidavits by RIL witness BK Ganguly, which contained references to internal communications deemed irrelevant to the contract dispute. In 2019, the Supreme Court had already ruled that RIL could not introduce excluded internal documents through oral testimony. The High Court’s decision was a compliance measure with this earlier ruling, leading to the appeal to the Supreme Court.
The Supreme Court found the High Court had correctly applied the previous directions and rejected RIL’s attempt to invoke Section 60 of the Indian Evidence Act concerning oral evidence, reaffirming that this argument was settled in 2019. The bench emphasized that the case, initiated in 2005, remained unresolved due to consistent obstruction by RIL.
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Judicial Observations
Justice Narasimha highlighted the delays in the proceedings, with discovery and inspection dragging for four years, and disputes over internal documents taking more than a year. Even after the High Court’s 2024 implementation of the Supreme Court’s directives, RIL’s appeal continued to delay the trial.
In 2019, the Supreme Court had expressed its dismay over unjustified delays, mandating the trial’s completion within nine months—a directive unfulfilled seven years later. The court acknowledged the broader implications of prolonged litigation, remarking, “Permitting a party to a suit to prolong the litigation is also a sad reflection of the way courts conduct their proceedings.”
Final Directives
The Supreme Court urged the Bombay High Court to expedite the conclusion of the suit. It ordered RIL to remit ₹10 lakh to the Supreme Court Advocates-on-Record Association within five weeks.
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RIL’s legal representation included Senior Advocates Abhishek Manu Singhvi and Shyam Divan, with Parekh & Co. as the advocate-on-record. NTPC was represented by Solicitor General Tushar Mehta and his legal team.
