The Supreme Court upheld the Bombay High Court’s approach and imposed costs of ₹10 lakh on Reliance Industries, payable to the Supreme Court Advocates-on-Record Association within five weeks.

A Bench comprising Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe has dismissed Reliance Industries Limited’s appeal arising from a long-pending commercial dispute with NTPC Limited concerning the proposed supply of natural gas, holding that the Bombay High Court correctly redacted portions of Reliance’s evidence affidavits that sought to introduce the contents of internal communications and documents already held inadmissible.

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The dispute traces back to an NTPC request for qualification inviting bids for the supply of natural gas to its power plants. Reliance Industries submitted its financial proposal, following which NTPC issued a Letter of Intent (LOI) dated June 16, 2004. Reliance accepted the LOI subject to the terms of a draft Gas Sale and Purchase Agreement (GSPA) being negotiated and finalised.

NTPC subsequently approached the court seeking a declaration that a binding contract for the supply of natural gas had come into existence. The suit sought specific performance of an alleged agreement involving the supply of 132 trillion BTU of natural gas over 17 years, on the premise that Reliance had unconditionally accepted the contractual terms contained in the LOI.

The commercial suit was filed in 2005/2006 and, despite the passage of approximately two decades, remains at the evidence stage.

The immediate controversy before the Supreme Court concerned portions of two examination-in-chief affidavits submitted by Reliance witness B.K. Ganguly—the first dated February 24, 2015 and the second dated August 10, 2016.

The underlying evidentiary dispute had a long history. Reliance had earlier sought discovery and inspection of NTPC’s internal documents concerning discussions surrounding the proposed GSPA. The Bombay High Court rejected that request in 2014, holding that the documents were irrelevant to determining whether the parties had entered into a concluded contract.

The High Court also criticised the delay in seeking discovery, noting that the application had remained pending for years and that Reliance had not adequately explained the delay. The Division Bench subsequently dismissed Reliance’s appeal and observed that the question of whether a concluded contract existed had to be decided on the basis of the documents already produced by the parties.

A significant aspect of the present judgment was that the Supreme Court had already dealt with the same evidentiary controversy in 2019.

After the High Court had permitted certain oral evidence concerning internal discussions, NTPC approached the Supreme Court. On February 28, 2019, the Supreme Court held that once the internal documents had been excluded from evidence through orders that had attained finality, the parties could not indirectly introduce their contents through oral testimony.

The Court made a distinction between the contents of an excluded internal document and the mere fact that a meeting or discussion had taken place. While a witness could testify about matters personally perceived by the witness in appropriate circumstances, the witness could not use oral testimony as a means of bringing the contents of documents that had already been excluded from the evidentiary record.

The 2019 ruling specifically held that previous orders excluding the documents were binding upon the trial court. It was therefore impermissible to achieve indirectly, through oral evidence, what had already been prohibited directly through documentary evidence.

The Supreme Court reiterated that principle in the present proceedings.

The Court noted that the earlier mandate was clear: internal notes and correspondence between officers had been held irrelevant; documents not exchanged between the parties were not to be taken on record; and the contents of those excluded documents could not subsequently be introduced through oral evidence.

At the same time, the Court recognised that the mere fact that discussions occurred was not necessarily excluded. Similarly, evidence based on a witness’s own perception or state of mind could, depending on its nature, remain admissible.

This distinction became central to the Bombay High Court’s subsequent examination of Reliance’s evidence affidavits.

Following the Supreme Court’s 2019 directions, the Bombay High Court carefully examined the two affidavits to determine which portions fell within the prohibited category.

The High Court did not mechanically remove the entire affidavits. Instead, it examined individual paragraphs and redacted only those portions that attempted to introduce internal communications, emails, meeting summaries or other excluded material.

For example, portions referring to internal emails were directed to be redacted. However, where a passage reflected the witness’s own perception or state of mind at the relevant time, the Court permitted it to remain. Similarly, references to correspondence exchanged between NTPC and Reliance were retained where such correspondence itself was relevant and admissible.

The High Court adopted the same approach with the second affidavit. Portions attempting to reproduce the contents or outcome of internal meetings through assertions such as the emergence of a “broad consensus” were ordered to be redacted where they effectively sought to bring excluded documents before the court indirectly.

The Supreme Court held that the Bombay High Court had correctly understood and implemented the directions contained in the 2019 judgment.

The Bench observed that the High Court had undertaken a detailed scrutiny rather than redacting every portion challenged by NTPC. Several paragraphs of the first affidavit were retained in full, while portions of the second affidavit were also retained where they contained permissible evidence.

The Court specifically agreed with the High Court’s decision to preserve material reflecting the witness’s perception of events, even where the surrounding paragraph referred to internal meetings.

Rejecting Reliance’s attempt to reopen the evidentiary question by invoking Section 60 of the Indian Evidence Act, 1872, the Supreme Court said that the issue had already been considered and decided in its earlier judgment.

The Court held that it was neither possible nor appropriate to revisit the 2019 decision and concluded that the High Court was fully justified in its findings.

Beyond the evidentiary question, the judgment contains strong observations regarding the extraordinary delay in the commercial litigation.

The Court noted that the NTPC suit had been pending since 2005/2006 and had made little progress. It identified three major stages of litigation that had consumed substantial time.

The first stage, involving discovery and inspection of documents, took approximately four years. The second stage, concerning production of Reliance’s internal documents, took more than a year. The third stage, concerning redaction of inadmissible portions of the evidence affidavits, began in 2016 and ultimately reached the Supreme Court, taking approximately three years to culminate in the 2019 judgment.

The Court noted that even after the Supreme Court’s 2019 directions, the litigation continued. The Bombay High Court’s order dated August 22, 2024 could have implemented the earlier directions, but Reliance challenged that order before the Supreme Court.

The result, the Court observed, was that two decades had passed while the commercial suit remained at the stage of evidence.

The Supreme Court recalled that it had previously expressed its concern over the delay in the matter.

In 2019, the Court had observed that it was shocked that the trial had been delayed without good reason despite the commercial suit having been pending for more than 13 years. It had requested the trial court to conclude the proceedings within an outer limit of nine months.

Seven years later, that direction had still not resulted in conclusion of the trial.

The Supreme Court therefore reiterated its request to the High Court to take up and dispose of the suit as expeditiously as possible. The Bench also emphasised that permitting a party to prolong litigation reflects adversely on the manner in which court proceedings are conducted.

Ultimately, the Supreme Court dismissed Reliance Industries’ appeal and imposed ₹10 lakh in costs.

The amount has been directed to be paid by Reliance Industries to the Supreme Court Advocates-on-Record Association within five weeks from the date of judgment.

The order underscores the Court’s disapproval of repeated attempts to reopen issues that had already attained finality, particularly where such proceedings contribute to prolonged delays in the adjudication of commercial disputes.

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