Supreme Court Dismisses RIL Appeal, Upholds Redaction of Evidence Affidavits in Two-Decade NTPC Gas Supply Suit

A bench of Justices Narasimha and Aradhe dismissed Reliance Industries' appeal, upheld redaction of witness affidavits, and imposed Rs. 10 lakh costs for prolonging a suit pending since 2005.

The Supreme Court on 14 August 2026 dismissed an appeal by Reliance Industries Limited challenging the Bombay High Court's order redacting portions of two examination-in-chief affidavits filed by its defence witness, Mr. B.K. Ganguly, in a commercial suit brought by NTPC Limited. The Court found that the High Court had correctly applied a 2019 Supreme Court judgment that barred oral evidence on documents already held inadmissible. The bench imposed costs of Rs. 10 lakh on RIL payable to the Supreme Court Advocates on Record Association, and called out two decades of procedural obstruction that has kept a 2005 suit frozen at the stage of evidence.

The Gas Supply Dispute and How It Reached the Court

NTPC Limited, the plaintiff, published a Request for Qualification inviting bids for supply of natural gas to its power plants. RIL submitted a financial proposal, following which NTPC issued a Letter of Intent dated 16 June 2004. RIL accepted the LOI subject to negotiation and finalisation of a Gas Sale and Purchase Agreement.

When the GSPA was never concluded to NTPC's satisfaction, NTPC filed a suit in the Bombay High Court seeking a declaration that a binding contract existed for supply of 132 trillion BTU of natural gas over 17 years, and specific performance of that contract. The suit has been pending since 2005.

The present appeal arose out of Commercial Suit No. 189 of 2021, from a Bombay High Court order dated 22 August 2024 directing redaction of certain passages in Mr. Ganguly's first evidence affidavit dated 24 February 2015 and his second evidence affidavit dated 10 August 2016.

Three Rounds of Procedural Contest Before the Redaction Order

The Court traced what it described as multiple “seasons laden with many episodes” of litigation. In the first round, RIL filed a chamber summons in 2010 seeking discovery of NTPC's internal documents. The High Court dismissed it in February 2014 as a “vague and fishing enquiry,” adding that there had been gross delay in filing. A Division Bench upheld that dismissal in March 2014, holding that the central question — whether a concluded contract existed — would be decided on documents already produced, not internal notings.

In the second round, after the plaintiff's evidence concluded, RIL filed a further chamber summons in 2015 seeking leave to produce additional documents, including its own internal files, annexed to the first evidence affidavit. The High Court dismissed that application in January 2016, holding that internal documents unilaterally prepared and not shared with the other side could not throw any light on whether a concluded contract existed. RIL challenged this by Special Leave Petition, but withdrew the petition in July 2016.

Less than a month later, RIL filed Mr. Ganguly's second evidence affidavit. NTPC moved for redaction on the ground that the affidavits sought to introduce the very same internal documents through oral testimony. The High Court's March 2017 order — since corrected for typographical errors and affirmed on review — took a more permissive line, holding that while internal e-mails were irrelevant, a witness could still depose orally about meetings and what transpired in them. NTPC challenged that view in the Supreme Court.

What the Supreme Court Held in 2019

By judgment dated 28 February 2019, the Supreme Court set aside the High Court's permissive approach. The Court held that the previous orders refusing to take internal documents on record had attained finality, having been affirmed through appeal and special leave proceedings. Those orders operated as res judicata and were binding on the trial court. It was not open to RIL to do indirectly — by leading oral testimony on the contents of excluded documents — what it could not do directly.

The 2019 judgment drew a precise line: the correspondence between the plaintiff and the defendant remained admissible; only intra-party internal discussions and documents refused production were barred. The witness could say a meeting was held, but could not use oral testimony to introduce the substance of documents already excluded.

The High Court's Paragraph-by-Paragraph Exercise

Following the 2019 judgment, the Bombay High Court undertook a detailed examination of the two affidavits paragraph by paragraph. The August 2024 order under challenge reproduced this exercise in full. For each highlighted passage, the High Court assessed whether it referred to excluded internal communications or to something independently admissible, such as the witness's own perception or state of mind.

In the first evidence affidavit, paragraphs containing references to internal e-mails — including those by or to DW-1 relating to dates in 2003, 2004, and 2005 — were redacted. Paragraphs recording the witness's perception of correspondence between the parties, such as his reading of a letter dated 12 August 2004 from NTPC to RIL, were retained in full. In paragraph 23, only the internal e-mail reference was struck; the sentence recording the witness's state of mind at the relevant time survived.

In the second evidence affidavit, portions of paragraphs 9, 10, 14, 15, and 16 that amounted to a restatement of excluded material — described as “broad consensus” outcomes of internal meetings — were redacted. The Court found that characterising the substance of an excluded e-mail as a “broad consensus” was a textbook attempt to bring excluded content on record through the back door. Portions of paragraph 3, which referred to the witness's perception of the situation and then to correspondence between the parties, were retained.

The Supreme Court's Findings in the Present Appeal

The Supreme Court found that the High Court had neither misread the 2019 directions nor misapplied them. The affidavits had been examined with what the Court called “meticulous scrutiny.” The redactions tracked exactly the line drawn in 2019 — internal documents and their oral surrogates out, inter-party correspondence and the witness's own perceptions in.

Before the Court, RIL again raised Section 60 of the Indian Evidence Act, 1872, arguing that oral testimony of a witness present at meetings could not be excluded. The Court declined to entertain this. The argument had already been considered and rejected in 2019 in the same litigation between the same parties. The Court said it was “neither in a position to revisit the judgment and order passed by this Court on 28 February, 2019, nor inclined to do so.”

The Court's Observations on Two Decades of Delay

Beyond the evidentiary question, the bench made pointed observations about the progress of the suit itself. The Court set out a timeline: the first round of chamber summons litigation over discovery took four years to conclude; the second round over production of internal documents took more than a year; and the third round over admissibility of oral evidence ran from 2016 to the 2019 Supreme Court judgment and then to the August 2024 High Court order implementing it. The present appeal added further delay.

The Court noted that in 2019 it had expressed shock at the trial's pace and directed conclusion within nine months. Seven years have since passed. The bench reiterated a direction to the High Court to take up and dispose of the suit as expeditiously as possible, observing that permitting a party to prolong litigation is also a reflection on how courts conduct their proceedings.

On RIL's conduct, the Court was direct: “The power of the RIL to litigate and obstruct progress of the suit seems unlimited.” It noted that at every stage an objection had been raised, and when rejected by the trial court, appellate and special leave jurisdictions had been invoked.

Outcome

The appeal was dismissed. The Supreme Court upheld the Bombay High Court order dated 22 August 2024 in its entirety, confirming the redaction of the identified passages in both evidence affidavits of DW-1 Mr. B.K. Ganguly. Costs of Rs. 10 lakh were imposed on RIL, payable to the Supreme Court Advocates on Record Association within five weeks of the date of judgment. The High Court was requested to take up and dispose of the underlying commercial suit as expeditiously as possible.