automatic vacation of stay order in six months

Supreme Court: The Constitution Bench comprising of Dr. DY Chandrachud, CJI along with Abhay S. Oka*, JB Pardiwala, Pankaj Mithal** and Manoj Misra, JJ. reversed its own 2018 ruling of a 3-Judge Bench and held that Constitutional Courts should not fix a timeline for disposal of cases pending in any court while exercising powers under Article 142. The Court further justified the stance that pattern of cases pending in various courts including High Courts is different.

The three-Judge Bench of Supreme Court in Asian Resurfacing of Road Agency (P) Ltd. v. CBI, (2018) 16 SCC 299 had held that interim orders passed by High Courts for stay on trials in civil and criminal matters would expire automatically after 6 months, unless the same was expressly extended by the High Court. The same was reversed in the instant decision. Justice Abhay S. Oka wrote the majority judgment, which was concurred by Justice Pankaj Mithal through a separate judgment.

Justice Abhay S. Oka

The Court explained that the directions in question in Asian Resurfacing (supra) regarding automatic vacation of stay were issued in exercise of jurisdiction under Article 142 of Constitution of India. The Court started with discussing the object of passing interim orders, which was apparently not considered while deciding the impugned judgment. The Court explained that “An order of interim relief is usually granted in the aid of the final relief sought in the case. An occasion for passing an order of stay of the proceedings normally arises when the High Court is dealing with a challenge to an interim or interlocutory order passed during the pendency of the main case before a trial or appellate Court. The High Court can grant relief of the stay of hearing of the main proceedings on being satisfied that a prima facie case is made out and that the failure to stay the proceedings before the concerned Court in all probability may render the remedy adopted infructuous. When the High Court passes an interim order of stay, though the interim order may not expressly say so, the three factors, viz; prima facie case, irreparable loss, and balance of convenience, are always in the back of the judges’ minds.”

Coming to the High Court’s power to vacate or modify interim relief, the Court discussed major grounds for doing the same. It further hinted towards the instances when an interim order of stay can come to an end, being the disposal of main case or by a judicial order vacating interim relief. It further hinted towards the elementary principles of natural justice and the mandate for hearing all the affected parties before passing an order of vacating interim relief or modification of the same. It added that “An interim order lawfully passed by a Court after hearing all contesting parties is not rendered illegal only due to the long passage of time.” The Court explained the applicability of directions issued in Asian Resurfacing regarding automatic vacation of interim orders of stay on all High Courts irrespective of merits of individual cases.

The Court expressed concern that “If a High Court concludes after hearing all the concerned parties that a case was made out for the grant of stay of proceedings of a civil or criminal case, the order of stay cannot stand automatically set aside on expiry of the period of six months only on the ground that the High Court could not hear the main case. If such an approach is adopted, it will be completely contrary to the concept of fairness….. No litigant should be allowed to suffer due to the fault of the Court. If that happens, it is the bounden duty of the Court to rectify its mistake.”

On the next direction for Trial Courts to immediately fix a date for hearing after end of 6 months, the Court found the same in favour of respondent before the High Court, adversely affecting litigant’s remedies under Articles 226 and 227 of Constitution. The Court cited third proviso to Section 254 (2A) of the Income Tax Act and CIT v. Pepsi Foods Ltd., (2021) 7 SCC 413 holding the provision of automatically vacating a stay as manifestly arbitrary.

Throwing light upon the scope of exercise of powers under Article 142 of the Constitution, the Court explained that the same are meant to further the cause of justice and to secure complete justice, wherein directions cannot be issued to defeat justice. The Court referred to a catena of cases to explain that “jurisdiction under Article 142 cannot be invoked to pass blanket orders setting at naught a very large number of interim orders lawfully passed by all the High Courts, and that too, without hearing the contesting parties. The jurisdiction under Article 142 can be invoked only to deal with extraordinary situations for doing complete justice between the parties before the Court.”

The Court further explained that a High Court is also a constitutional court, not judicially subordinate to the Supreme Court, and the power under Article 227 providing judicial superintendance over all Courts within its jurisdiction includes power to stay proceedings before such Courts. According to the Court, a blanked direction while exercising power under Article 142 of Constitution, it could not interfere with the High Court’s jurisdiction of granting interim relief by limiting it to pass interim orders having validity of 6 months at a time. It added that “Putting such constraints on the power of the High Court will also amount to making a dent on the jurisdiction of the High Courts under Article 226 of the Constitution, which is an essential feature that forms part of the basic structure of the Constitution.”

The Court further remarked that in Asian Resurfacing case, the Court was dealing with a matter under Prevention of Corruption Act, and not one arising out of orders of stay granted under different categories of cases pending before various High Courts. Thus, an attempt was made to delve into an issue which did not arise for consideration, even applicable on civil cases before trial courts. The Court thereby held that constitutional Courts should not normally fix a time-bound schedule for disposal of cases pending in any Court, since the situation at the grassroots level is better known to the judges of the Courts concerned. The Court further directed that “To avoid any prejudice to the opposite parties, while granting ex-parte ad-interim relief without hearing the affected parties, the High Courts should normally grant ad-interim relief for a limited duration”

Before concluding, the Court also came up with important parameters to be exercised for jurisdiction under Article 142 of the Constitution.

Justice Pankaj Mithal

In a concurring judgment, Justice Mithal pointed towards Asian Resurfacing verdict when the Court observed and directed that “where a challenge to an order framing charge is entertained and stay is granted, the matter must be decided on day-to-day basis so that the stay may not continue for an unduly long time.” It further hinted towards the directions regarding automatic lapse after 6 months in the absence of a speaking order extending time.

Pointing towards Article 142 and Article 226(3) of the Constitution, the Court clarified that the same was not applicable to other proceedings, but the principles may be extended to other proceedings. It further added that “grant of interim stay order ought to be ordinarily by a speaking order and therefore as a necessary corollary, a stay order once granted cannot be vacated otherwise than by a speaking order, more so, when its extension also requires reasons to be recorded….. filing of an application for vacating the stay order is a sine qua non for triggering the automatic vacation of the stay order under Article 226(3) if such an application is not decided within the time prescribed of two weeks.”

It concluded that stay granted in any proceedings would not automatically stand vacated after expiry of a particular period unless an application is filed by the other side and decided based on principles of natural justice through a speaking order. The Court commented that “Sometimes, in quest of justice we end up doing injustice. Asian Resurfacing is a clear example of the same.”

[High Court Bar Association, Allahabad v. State of UP, 2024 SCC OnLine SC 207, decided on 29-02-2024]

Judgment authored by: Justice Abhay S. Oka and Justice Pankaj Mithal

Know Thy Judge | Justice Abhay S. Oka – Harbinger of Social Change and Preserver of Administrative Accountability

Know Thy Judge | Supreme Court of India: Justice Pankaj Mithal

Advocates who appeared in this case :

For Appellants: Rakesh Dwivedi, Sr. Adv., V.K. Shukla, Sr. Adv., Kavin Gulati, Sr. Adv., S.G., Hasnain, Sr. Adv., Ravindra Singh, Sr. Adv., Dinesh Goswami, Sr. Adv., Shantanu Krishna, AOR, Nitin Sharma, Adv., Nikhil Sharma, Adv., Eklavya Dwivedi, Adv., Shantanu Sagar, Adv., Anukul Raj, Adv., Ankit Mishra, Adv., Harmeet Singh Ruprah, Adv., Abhinav Shrivastava, Adv., Manu Yadav, Adv., Himanshu Tyagi, Adv., Kumar Ayush, Adv., Ronak Chaturavedi, Adv., Ram Kaushik, Adv., Syed Mohd Fazal, Adv., Archit Mandhyan, Adv., Raman Yadav, Adv., Prabhat Ranjan Raj, Adv., Sidharth Sarthi, Adv., Anil Kumar, Adv., Gunjesh Ranjan, Adv., Animesh Tripathi, Adv., Anant Prakash, Adv., Kanupriya Mishra, Adv., Amit Kumar Singh, Adv., Salil Srivastava, Adv., Shaurya Vardhan Singh, Adv., Ankit Dwivedi, Adv., Mukti Chowdhary, Adv., Gyanendra Kumar, Adv., Vijaya Singh, Adv., Shashwat Anand, Adv., Apoorv Mishra, Adv., Shashank Shukla, Adv., Ashutosh Thakur, Adv., Vaibhav Jain, Adv., Rituvendra Singh, Adv., Aniruddh Kumar, Adv., Rajrshi Gupta, Adv., Imran Ullah, Adv., Tarun Agarwal, Adv., Ankit Saran, Adv., Namit Srivastava, Adv., Rakesh Dubey, Adv., Swetashwa Agarwal, Adv., Javed H Khan, Adv., Praval Tripathi, Adv., Shariq Ahmed, Adv., Satwik Misra, Adv., Ishit Saharia, Adv., Ashish Singh, Adv., Amit Singh, Adv., Sanjay Kumar Singh, Adv., Piyush Kumar, Adv., Paritosh Kumar Singh, Adv., Babita Kushwaha, Adv., Pai Amit, AOR, N. Ashwani Kumar, Adv., Pankhuri Bhardwaj, Adv., Abhiyudaya Vats, Adv., Tathagata Dutta, Adv., Vanshika Dubey, Adv., Kushal Dube, Adv., Nikhil Pahwa, Adv., P. Ashok, Adv.

For Respondents: Tushar Mehta, SG, Ajay Kumar Misra, Sr. Adv., Tanmaya Agarwal, AOR, Shwetank Sailakwal, Adv., Wrick Chatterjee, Adv., Aditi Agarwal, Adv., Vinayak Mohan, Adv., Mahfooz Ahsan Nazki, AOR, Polanki Gowtham, Adv., Rajeswari Mukherjee, Adv., K.V. Girish Chowdary, Adv., T. Vijaya Bhaskar Reddy, Adv., Archita Nigam, Adv., Meeran Maqbool, Adv., Fuzail Ahmad Ayyubi, AOR, Vijay Hansaria, Sr. Adv., Kavya Jhawar, Adv., Devesh Tripathi, Adv., Anasuya Choudhury, AOR, Kartik Vashisht, Adv., Gaurav Mehrotra, Adv., Nadeem Murtaza, Adv., Talha Abdul Rahman, AOR, Mohit Singh, Adv., Akber Ahmed, Adv., Maria Fatima, Adv., Alina Masoodi, Adv., M. Shaz Khan, Adv., Adnan Yousuf, Adv., Muhammad Zaid, Adv.

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