Supreme Court Comes Down Hard On Reliance
The Supreme Court has imposed a ₹10 lakh cost on Reliance Industries Limited (RIL) for what it described as repeated obstruction that has kept a commercial dispute with NTPC pending for nearly two decades.
A bench of Justices P S Narasimha and Alok Aradhe dismissed Reliance’s latest appeal and strongly criticised the company’s approach to the litigation.
The court observed that the company’s ability to litigate and obstruct the progress of the case appeared to be “unlimited”.
20-Year-Old Case Still At Evidence Stage
The dispute dates back to 2005when NTPC filed a suit concerning a proposed natural gas supply agreement with Reliance.
Despite the case being more than 20 years old, the Supreme Court noted that the suit has still not progressed beyond the evidence stage.
The court also pointed out that it had directed in 2019 that the matter be disposed of within nine months. Seven years later, that deadline has passed without the case reaching a conclusion.
Dispute Over Natural Gas Supply
The original dispute arose after NTPC invited bids for the supply of natural gas to its power plants.
Reliance submitted a financial proposal, following which NTPC issued a Letter of Intent in June 2004.
NTPC subsequently approached the court seeking a declaration that a binding agreement existed for the supply of 132 trillion British thermal units of natural gas over 17 years.
The proceedings have since gone through multiple rounds of applications, appeals and challenges.
Reliance Raised Multiple Objections
The Supreme Court highlighted the number of procedural disputes that had emerged during the case.
Reliance had sought discovery of NTPC’s internal documents, but the request was rejected by the courts as a belated attempt to conduct a “fishing enquiry”.
The company subsequently sought to introduce its own internal documents into the record. That attempt was also rejected.
Several further challenges followed, contributing to the prolonged litigation.
Latest Dispute Was Over Evidence
The latest appeal concerned portions of an affidavit submitted by an RIL witness.
NTPC had objected to parts of the affidavit, arguing that they contained privileged and inadmissible internal communications.
The Bombay High Court directed that portions referring to internal communications be redacted while allowing material reflecting the witness’s own perceptions and state of mind to remain.
Reliance challenged that order before the Supreme Court.
The apex court found that the High Court had correctly followed the Supreme Court’s earlier directions and rejected Reliance’s appeal.
Court Criticises Two Decades Of Litigation
The Supreme Court expressed particular concern over the amount of time consumed by the proceedings.
According to the court, disputes over discovery and inspection alone took around four years. Issues concerning production of internal documents consumed more than a year, while litigation surrounding the redaction of evidence continued for another three years.
The court said that “at every stage there has been obstruction” and emphasised that the original suit had made little progress despite having been filed two decades ago.
₹10 Lakh Cost On Reliance
While dismissing the appeal, the Supreme Court ordered Reliance Industries to pay ₹10 lakh as costs.
The amount has been directed to be deposited with the Supreme Court Advocates-on-Record Association within five weeks.
The court also reiterated its request to the Bombay High Court to dispose of the underlying NTPC suit as quickly as possible.
A Strong Message Against Prolonged Litigation
The ruling sends a strong message about the court’s growing concern over prolonged commercial litigation.
Large corporations with substantial financial resources can potentially pursue multiple legal challenges for years, but such litigation can keep disputes unresolved and add to the enormous backlog faced by Indian courts.
The Supreme Court’s decision makes clear that procedural rights cannot become a mechanism for endlessly delaying the conclusion of a case.
For NTPC and Reliance, the underlying gas supply dispute now returns to the Bombay High Court, where the court has been asked to move towards a final resolution.
Summary
The Supreme Court has imposed a ₹10 lakh cost on Reliance Industries while dismissing its appeal in a 20-year-old commercial dispute filed by NTPC over a proposed natural gas supply agreement. The court criticised Reliance for repeatedly challenging procedural decisions, noting that the case filed in 2005 remains stuck at the evidence stage. The apex court also urged the Bombay High Court to dispose of the long-pending case as expeditiously as possible.