A partnership cannot replace a proprietorship’s contractual identity without written novation or alteration.

The petitioner, Shri Ruhini Gogoi, carried on business as the proprietor of M/s Ruhini Gogoi and was registered with ONGC under Vendor Code No. 824091, linked to his proprietorship bank account, PAN and GSTIN.

ONGC issued a Notification of Award dated 28 September 2022, followed by a Contract Agreement dated 31 January 2023, expressly entered into with the petitioner as proprietor of M/s Ruhini Gogoi.

Clause 1.1 required contractual modifications to be made in writing.

Subsequently, the petitioner entered into a partnership agreement with Respondent Nos. 3 and 4 on 28 December 2023, providing for conversion of the proprietorship business into a partnership with the same trade name, deemed effective from 17 April 2023.

ONGC thereafter changed the bank-account details, PAN and GSTIN associated with the vendor code from those of the proprietorship to those of the partnership.

ONGC contended that the changes were made pursuant to the petitioner’s request dated 8 January 2024 and were approved after internal scrutiny on 16 July 2024.

Respondent Nos. 3 and 4 relied upon the partnership arrangement and disclosed the pendency of a civil suit, injunction proceedings and proceedings under Section 138 of the Negotiable Instruments Act concerning their monetary claims against the petitioner.

ONGC subsequently stated that no payment had been released to the partnership account, that Rs. 78,05,280 remained payable for the work performed, and that no deductions had been made using the partnership PAN or GSTIN.

Whether ONGC could treat the partnership firm as the contracting party, or change the petitioner’s bank-account, PAN and GSTIN details, without a written modification or novation of the Contract Agreement dated 31 January 2023.

Whether ONGC was required to make payment under the subsisting contract to the petitioner’s proprietorship account using the proprietorship PAN and GSTIN.

Whether the pendency of the civil dispute between the petitioner and Respondent Nos. 3 and 4 barred exercise of the High Court’s writ jurisdiction in relation to ONGC’s contractual and administrative conduct.

The Court applied Clause 1.1 of the Contract Agreement, which required any contractual modification to be made in writing.

It applied Section 62 of the Indian Contract Act, 1872, under which substitution, rescission or alteration of a contract requires agreement between the relevant parties and may amount to novation.

The Court distinguished a proprietorship from a partnership: a proprietorship is not a separate legal entity and represents the proprietor’s individual business, whereas a partnership arises from an agreement between two or more persons and entails joint and several liability under Section 25 of the Indian Partnership Act, 1932.

Sections 18 and 19 of the Partnership Act, concerning a partner’s agency and the binding effect of acts done in the ordinary course of partnership business, were also noted.

The governing principle was that a contracting party cannot be substituted, and contractual payment particulars cannot be altered in a legally substantive manner, without the contractually required written amendment or novation.

The Court found that the original contract continued to subsist between ONGC and the petitioner in his capacity as proprietor of M/s Ruhini Gogoi, and that no subsequent written modification had been executed.

Because a proprietorship and a partnership are legally distinct in their constitution, liability and contracting identity, the partnership could not automatically become a party to the ONGC contract merely because it adopted the same trade name or because the petitioner became one of its partners.

Applying Clause 1.1 and Section 62 of the Contract Act, the Court held that ONGC could not lawfully substitute the partnership’s bank account, PAN or GSTIN for those of the proprietorship without a written alteration or novation.

Even assuming that the petitioner had requested the change, such request did not satisfy the contractual requirement of a written novation or alteration.

The Court further held that the dispute between the petitioner and Respondent Nos. 3 and 4 concerned their separate civil and criminal claims and did not determine ONGC’s obligations under the original contract.

ONGC was directed to correct its records and pay the contractual dues to the bank account of M/s Ruhini Gogoi as a proprietorship, after applicable statutory income-tax deductions, using PAN No. AGAPG1980B and GSTIN No. 18AGAPG1980B1ZV linked to Vendor Code No. 824091.

The Court expressly left open all disputes between the petitioner and Respondent Nos. 3 and 4, including the pending proceedings under the Negotiable Instruments Act, Title Suit No. 30/2025 and the related injunction proceedings.