1. Petitioner contractor seeks restoration of bank, PAN, GST details changed by ONGC to partnership firm without contract amendment. (Para 2 , 3 , 4 , 8 )
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2026 Supreme(Gau) 1429
THE GAUHATI HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
DEVASHIS BARUAH, J.
Shri Ruhini Gogoi Son Of Late Dharmeshwar Gogoi - Appellant
Versus
Oil And Natural Gas Corporation And Anr. - Respondent
WP(C) No.100 of 2026
Decided On : 28-07-2026
Important Points
Without novation or written alteration of a contract, a party cannot unilaterally substitute a partnership firm for the original proprietorship firm, as they are legally distinct entities.
Subject
Contract Law - Novation and Alteration
Act Referred
Headnote
(A) Indian Contract Act, 1872 - Section 62 - Novation, rescission, and alteration of contract - Indian Partnership Act, 1932 - Sections 18, 19 and 25 - Distinction between proprietorship and partnership - Need for written alteration under contract clause - Unilateral change of bank details, PAN and GSTIN without novation impermissible.
(B) Contract law - Novation and alteration - Where a contract specifically requires any modification to be in writing, a party cannot unilaterally substitute the original contracting entity (proprietorship) with a different entity (partnership) without a written amendment, even if the proprietor is a partner in the new firm.
Facts of the case:
The petitioner, as proprietor of a proprietorship firm, entered into a contract with the respondent corporation for pipeline works. The contract contained a clause (Clause 1.1) stating that any modification must be in writing. Subsequently, the petitioner entered into a partnership agreement with private respondents, converting the proprietorship business into a partnership firm under the same name. Without any written amendment to the original contract, the respondent corporation, allegedly at the petitioner’s request, changed the bank account, PAN and GSTIN details from the proprietorship to the partnership firm. The petitioner filed a writ petition seeking restoration of the original details and a direction not to unilaterally change the status of the petitioner under the contract.
Findings of Court:
The court held that a proprietorship firm is not a distinct entity, whereas a partnership firm is a compendium of two or more persons with joint and several liability. Since the contract dated 31.01.2023 expressly required any alteration to be in writing, and no such written novation or alteration existed, the respondent corporation could not change the payment details to the partnership firm. Even if the petitioner had requested the change, without a written modification, the original contract continued to bind only the proprietor. The court directed the restoration of the original bank details, PAN and GSTIN linked to the proprietorship, and ordered payment to be made to the proprietorship account after statutory deductions.
Issues: Whether the respondent corporation could unilaterally change the bank account, PAN and GSTIN from the petitioner’s proprietorship firm to a partnership firm without any written novation or alteration of the original contract.
Ratio Decidendi: The court ruled that a contract entered into with a proprietorship firm is a contract with the individual proprietor. Any substitution of a partnership firm as the contracting party requires a valid novation or alteration in writing, as mandated by the contract’s own terms and Section 62 of the Indian Contract Act, 1872. Without such novation, the original contract remains in force, and the corporation cannot change payment details unilaterally. Result : Petition disposed of with directions to restore the original details and make payment to the proprietorship firm; the disputes between the petitioner and private respondents to be adjudicated separately by competent courts without being influenced by the observations in this judgment.
(B) Contract law - Novation and alteration - Where a contract specifically requires any modification to be in writing, a party cannot unilaterally substitute the original contracting entity (proprietorship) with a different entity (partnership) without a written amendment, even if the proprietor is a partner in the new firm.
Facts of the case:
The petitioner, as proprietor of a proprietorship firm, entered into a contract with the respondent corporation for pipeline works. The contract contained a clause (Clause 1.1) stating that any modification must be in writing. Subsequently, the petitioner entered into a partnership agreement with private respondents, converting the proprietorship business into a partnership firm under the same name. Without any written amendment to the original contract, the respondent corporation, allegedly at the petitioner’s request, changed the bank account, PAN and GSTIN details from the proprietorship to the partnership firm. The petitioner filed a writ petition seeking restoration of the original details and a direction not to unilaterally change the status of the petitioner under the contract.
Findings of Court:
The court held that a proprietorship firm is not a distinct entity, whereas a partnership firm is a compendium of two or more persons with joint and several liability. Since the contract dated 31.01.2023 expressly required any alteration to be in writing, and no such written novation or alteration existed, the respondent corporation could not change the payment details to the partnership firm. Even if the petitioner had requested the change, without a written modification, the original contract continued to bind only the proprietor. The court directed the restoration of the original bank details, PAN and GSTIN linked to the proprietorship, and ordered payment to be made to the proprietorship account after statutory deductions.
Issues: Whether the respondent corporation could unilaterally change the bank account, PAN and GSTIN from the petitioner’s proprietorship firm to a partnership firm without any written novation or alteration of the original contract.
Ratio Decidendi: The court ruled that a contract entered into with a proprietorship firm is a contract with the individual proprietor. Any substitution of a partnership firm as the contracting party requires a valid novation or alteration in writing, as mandated by the contract’s own terms and Section 62 of the Indian Contract Act, 1872. Without such novation, the original contract remains in force, and the corporation cannot change payment details unilaterally. Result : Petition disposed of with directions to restore the original details and make payment to the proprietorship firm; the disputes between the petitioner and private respondents to be adjudicated separately by competent courts without being influenced by the observations in this judgment.
Legal Category Hierarchy
- contract law
- partnership law
- administrative law
- practice and procedure
Advocates:
Advocate Appeared:
For the Appellant :Mr. M. Goswami, Sr. Advocate Mr. D. Gogoi, Advocate
For the Respondent:Mr. P. Baruah, Advocate Mr. R. Sarmah, Advocate
Advocate Appeared:
For the Appellant :Mr. M. Goswami, Sr. Advocate Mr. D. Gogoi, Advocate
For the Respondent:Mr. P. Baruah, Advocate Mr. R. Sarmah, Advocate
Table of Contents
2. Petitioner: ONGC cannot unilaterally change contracting party; ONGC: changes at petitioner's request; private respondents: dispute is civil and pending suit. (Para 20 , 21 , 22 , 23 )
3. Court directed ONGC to restore proprietorship details and pay to proprietorship account; private disputes left to civil courts. (Para 31 )
4. Can a contracting party unilaterally change the counterparty from a proprietorship to a partnership firm without contract novation?
No. Without a written novation or alteration as required by the contract, the change is impermissible; the original contract continues. (Para 24 , 25 , 26 , 27 , 28 )
5. What is the legal distinction between a proprietorship firm and a partnership firm in the context of contract obligations?
A proprietorship is not a distinct entity; contract is with the individual. A partnership is a compendious term for two or more persons; liability is joint and several. (Para 27 )
6. What is the effect of novation under Section 62 of the Indian Contract Act, 1872 on payment obligations?
Without novation or alteration of the original contract, the obligee cannot make payment to a different entity; original contract must be performed. (Para 29 )
7. Does the pendency of a civil suit between the parties bar the writ court from addressing the public law issue?
No. The public law issue of contract compliance is distinct from the private disputes; the writ court can decide it without affecting the suit. (Para 30 )
JUDGMENT AND ORDER :
DEVASHIS BARUAH, J.
Heard Mr. M. Goswami, the learned Senior Counsel assisted by Mr. D. Gogoi, the learned counsel appearing on behalf of the Petitioner. Mr. P. Baruah, the learned counsel appears on behalf of the Respondent Nos.1 & 2 and Mr. R. Sarmah, the learned counsel appears on behalf of the Respondent Nos.3 & 4.
PREFACE
2. The present writ petition has been filed by the Petitioner seeking a direction upon the Respondent No.1 to restore the Petitioner's Bank Account No.10637169153 maintained in the State Bank of India, ONGC Colony Branch; PAN Card No.AGAPG1980B and GSTIN 18AGAPGI1980B1ZV linked to the Vendor Code 824091. In addition to that, the Petitioner has also sought for appropriate directions upon the Respondent No.1 not to unilaterally change the status of the Petitioner under the contract agreement to that of a partnership firm.
BRIEF FACTS OF THE CASE
3. The Petitioner is a registered Government Contractor with the Respondent Oil and Natural Gas Corporation (ONGC) and claims to have executed certain works. The contracts were executed by the Petitioner in his individual capacity as a proprietorship firm in the name and style of M/S Ruhini Gogoi. The Petitioner’s proprietorship firm had been provided a Vendor Code bearing No.824091. The Bank Account which is associated with the Vendor Code is 10637169153 maintained in State Bank of India, ONGC Colony Branch. The PAN No. is AGAPG1980B and the GSTIN is 18AGAPGI1980B1ZV.
4. In respect to a tender, more particularly, “the Annual Rate Contract for Laying and Maintenance of Oil/Gas/Water Rejection/Different Effluent Pipelines in Assam Asset for Three Years”, the Petitioner participated in the said tender process and was issued a Notification of Award dated 28.09.2022. A Contract Agreement was entered into by and between the Respondent No.1 and the Petitioner on 31.01.2023. The Contract Agreement has been enclosed as Annexure-B to the writ petition wherein it is clearly mentioned that the ONGC had entered into an Agreement with M/S Ruhini Gogoi, a proprietorship firm having its registered office at Moutgaon (Lakwa), P.O.-Moutgaon, Sivasagar-785686, Assam.
5. Clause 1.1 of the said Contract Agreement specifically mentions that the contract shall mean a written contract signed between ONGC and the contractor including subsequent amendments to the contract in writing thereto. In other words, if there is a modification of the said contract, there has to be a document in writing.
6. It is an admitted case of the parties to the present lis that the Petitioner had entered into a partnership with the Respondent Nos.3 and 4 on 28.12.2023. The said partnership agreement entered into by and between the Petitioner and the Respondent Nos.3 and 4 has been enclosed as Annexure-C to the writ petition. In terms with the said partnership agreement, the partnership would commence and/or deemed to have commenced on and from 17.04.2023. It is stipulated in the partnership agreement that the Petitioner herein, who is the party in the first part, would be converting the business of M/S Ruhini Gogoi from proprietorship to partnership and the business in the co-partnership would be carried out in the name and style of M/S Ruhini Gogoi.
7. It is the case of the Petitioner that without the Petitioner's knowledge, the Respondent Nos.3 & 4 took steps before the Respondent Nos.1 & 2 for converting the agreement entered into by and between the Petitioner's proprietorship firm with the ONGC to that of the partnership firm with the ONGC and in that regard, the Petitioner had also issued certain communications to the Respondents which have been enclosed as Annexure-E as well as Annexure-F Colly to the writ petition.
8. The grievance of the Petitioner in the present proceedings is that the Respondent Nos.1 & 2 without carrying out any amendment to the written contract entered into on 31.01.2023 much prior to the constitution of the partnership firm have unilaterally changed the details of the Ba
