Supreme Court: In a case concerning the admissibility of portions of examination-in-chief affidavits filed by Reliance Industries Ltd. (RIL) in its long-pending contractual dispute with National Thermal Power Corporation Ltd. (NTPC Ltd.), a Division Bench of Pamidighantam Sri Narasimha and Alok Aradhe, JJ., upheld the Bombay High Court’s redaction of portions seeking to introduce through oral evidence the contents of internal documents and communications already held irrelevant and excluded from the record.
Reiterating its earlier judgment dated 28 February 2019, the Court held that while the contents of excluded documents or communications could not be introduced through oral evidence, a witness could depose about the factum of a meeting or discussion and his own perception of events. Finding that the High Court had correctly applied this mandate, the Court dismissed the appeal and imposed costs of ₹10 lakhs on RIL, while directing expeditious disposal of the suit which had remained pending since 2005.
Background
The present appeal arises from an order of the Bombay High Court in a Commercial Suit concerning the admissibility of portions of the examination-in-chief affidavits dated 24 February 2015 (1st Evidence Affidavit) and 10 August 2016 (2nd Evidence Affidavit) of Defendant Witness 1 (DW 1), produced by Reliance Industries Ltd. (RIL). National Thermal Power Corporation Ltd. (NTPC Ltd.) had issued a request for qualification (RFQ) inviting prospective bidders to submit proposals for supply of natural gas to its power plants. Pursuant thereto, RIL submitted its financial proposal and NTPC issued a letter of intent (LOI) dated 16 June 2004, which was accepted by RIL subject to the terms of the draft Gas Sale and Purchase Agreement (GSPA) to be negotiated and finalised. NTPC thereafter instituted a suit seeking a declaration that a binding contract existed for supply of 132 trillion British Thermal Units (BTU) of natural gas for a period of 17 years, on the premise that the terms incorporated in the LOI had been unconditionally accepted by RIL.
During the pendency of the suit, RIL sought discovery and inspection of NTPC’s internal documents relating to discussions concerning finalisation of the GSPA and internal meetings of NTPC. The High Court rejected the Chamber Summons, holding that such internal notings and correspondence were irrelevant for determining whether a concluded contract existed between the parties. RIL thereafter sought leave to produce additional documents along with the 1st Evidence Affidavit, including internal documents of RIL. The High Court again held that the inter se notings and correspondence were irrelevant and refused to take the said documents on record. RIL challenged the order before the Supreme Court by filing Special Leave Petition (Civil) [SLP (C)] No. 8260 of 2016, which was subsequently dismissed as withdrawn.
Thereafter, RIL filed the 2nd Evidence Affidavit of DW 1. NTPC sought redaction of portions of both affidavits on the ground that they sought to introduce, through oral evidence, the contents of internal documents which had already been held irrelevant and excluded from evidence. The Bombay High Court, by order dated 31 March 2017, redacted certain portions while retaining others. In the earlier round of litigation, the Supreme Court, by judgment dated 28 February 2019 in SLP (C) Nos. 11741—11742 of 2018, had held that oral evidence could not be permitted with respect to the contents of documents or correspondence which had not been taken on record. Following the mandate of the Supreme Court, the High Court re-examined the 1st and 2nd Evidence Affidavits paragraph-wise and redacted only such portions as fell within the matters expressly excluded by the Supreme Court.
Analysis
The Court observed that the principal issue was whether the portions retained by the High Court were contrary to the mandate of the Supreme Court in its judgment dated 28 February 2019. The Supreme Court had categorically held that once internal discussions were found to be irrelevant and the documents were refused to be taken on record, the parties could not be permitted to adduce oral evidence qua such documents. Thus, oral evidence with respect to the contents of excluded documents, e-mails, correspondence or internal communications could not be permitted. However, the fact that a meeting or discussion had taken place was not excluded, and the witness could depose orally that such meeting was held and what transpired therein, so long as such evidence did not amount to introducing the contents of the excluded documents or communications.
The Court found that the High Court had undertaken a meticulous scrutiny of the 1st and 2nd Evidence Affidavits and had not mechanically redacted every portion sought by NTPC. Instead, it examined the affidavits paragraph by paragraph to determine whether a particular portion fell foul of the test laid down by the Supreme Court. Thus, where a portion constituted internal communication, it was redacted, whereas portions relating to the witness’s own perception of facts were retained. For instance, in Para 23 of the 1st Evidence Affidavit, the High Court redacted portions constituting internal communications but permitted the later portion as evidence of fact perceived by DW 1. Similarly, Para 35 was retained as it indicated the witness’s perception of the letter dated 12 August 2004. In respect of the 2nd Evidence Affidavit also, portions were retained where the evidence related to DW 1’s perception of the situation, notwithstanding reference to internal meetings. The Court agreed with this approach and held that the High Court had correctly applied the mandate laid down by the Supreme Court.
The Court held that the High Court had neither committed any error in understanding the directions of the Supreme Court nor in applying its mandate to the 1st and 2nd Evidence Affidavits. Before the Court, an attempt was made to reopen the issue by relying upon Section 60, Evidence Act, 1872, in relation to leading oral testimony, and by contending that the High Court had exceeded its jurisdiction in redacting portions of the affidavits. The Court noted that this was the very argument which had already been advanced and considered in detail while passing the judgment dated 28 February 2019. The Court held that it was neither in a position to revisit the earlier judgment nor inclined to do so, and therefore found the High Court fully justified in arriving at its conclusions.
The Court further took serious note of the protracted nature of the litigation. The suit instituted by NTPC in 2005 had not progressed substantially and, at every stage, there had been obstruction. Stage-1, concerning discovery and inspection, took 4 years; Stage-2, concerning production of internal documents, took more than a year; and Stage-3, concerning redaction of inadmissible statements, commenced in 2016 and concluded with the Supreme Court’s judgment in 2019, taking 3 years. Even after the Bombay High Court’s order dated 22 August 2024 implementing the Supreme Court’s directions, the present appeal was filed, resulting in further delay. The Court noted that 2 decades had passed and the suit was still at the stage of evidence.
The Court noted that on multiple occasions, Courts have directed the suit to be taken up and disposed of expeditiously. In 2019, it had directed that, “We are shocked that trial has been delayed for no good reason. It is pending since 2006, for more than 13 years. It is a commercial suit of 2006. We request the trial Judge to conclude the trial within the outer limit of nine months from today.” The Court observed that seven years had passed since that direction was issued.
The Court observed 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.”
Decision
The Court dismissed the appeal with costs, quantified at ₹10 lakhs, payable by the appellant-RIL to the Supreme Court Advocates-on-Record Association (SCAORA) within 5 weeks. The Court reiterated the direction for expeditious disposal of the suit, noting that permitting a party to prolong litigation is “also a sad reflection of the manner in which courts conduct their proceedings”. The High Court was requested to take up and dispose of the suit as expeditiously as possible.
[Reliance Industries Ltd. v. NTPC Ltd., 2026 SCC OnLine SC 1579, decided on 14-8-2026]
