The Supreme Court, while overruling its judgment in the case of Asian Resurfacing of Road Agency Private Limited v. Central Bureau of Investigation (2018) 16 SCC 299, has issued guidelines on the procedure to be adopted by High Courts in passing interim order of stay of proceedings and for dealing with the applications for vacating interim stay.
The five-Judge Constitution Bench comprising CJI D.Y. Chandrachud, Justice Abhay S. Oka, Justice J.B. Pardiwala, Justice Pankaj Mithal, and Justice Manoj Misra issued the following guidelines:
(1) 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. After hearing the contesting parties, the Court may or may not confirm the earlier ad-interim order.
(2) Ad-interim relief, once granted, can be vacated or affirmed only after application of mind by the concerned Court. Hence, the Courts must give necessary priority to the hearing of the prayer for interim relief where ad-interim relief has been granted. Though the High Court is not expected to record detailed reasons while dealing with the prayer for the grant of stay or interim relief, the order must give sufficient indication of the application of mind to the relevant factors.
(3) An interim order passed after hearing the contesting parties cannot be vacated by the High Court without giving sufficient opportunity of being heard to the party whose prayer for interim relief has been granted. Even if interim relief is granted after hearing both sides, the aggrieved party is not precluded from applying for vacating the same on the available grounds. In such a case, the High Court must give necessary priority to the hearing of applications for vacating the stay, if the main case cannot be immediately taken up for hearing.
(4) Applications for vacating interim reliefs cannot be kept pending for an inordinately long time. The High Courts cannot take recourse to the easy option of directing that the same should be heard along with the main case. The same principles will apply where ad-interim relief is granted. If an ad-interim order continues for a long time, the affected party can always apply for vacating ad-interim relief. The High Court is expected to take up even such applications on a priority basis. If an application for vacating ex-parte ad interim relief is filed on the ground of suppression of facts, the same must be taken up at the earliest.
The Court also said that the High Courts are always empowered to vacate or modify an order of interim relief passed after hearing the parties on the following, amongst other grounds: –
(a) If a litigant, after getting an order of stay, deliberately prolongs the proceedings either by seeking adjournments on unwarranted grounds or by remaining absent when the main case in which interim relief is granted is called out for hearing before the High Court with the object of taking undue advantage of the order of stay;
(b)The High Court finds that the order of interim relief is granted as a result of either suppression or misrepresentation of material facts by the party in whose favour the interim order of stay has been made; and
(c) The High Court finds that there is a material change in circumstances requiring interference with the interim order passed earlier. In a given case, a long passage of ime may bring about a material change in circumstances.
It was clarified that these grounds are not exhaustive and there can be other valid grounds for vacating an order of stay.
Senior Advocate Rakesh Dwivedi appeared for the appellant while Solicitor General Tushar Mehta appeared for the respondents.
Factual Background –
In Asian Resurfacing case, the Supreme Court dealt with the scope of interference by the High Court with an order of framing charge passed by the Special Judge under the provisions of the Prevention of Corruption Act, 1988 (PC Act). The issue was whether an order of framing charge was an interlocutory order and the High Court held that an order of framing charge under the PC Act was interlocutory. A two-Judge Bench by an order dated September 9, 2013, referred the case to a larger Bench to consider the issue of whether the case of Mohan Lal Magan Lal Thacker v. State of Gujarat AIR 1968 SC 733 was correctly decided.
A three-Judge Bench held that the order of framing charge was neither an interlocutory nor a final order. Therefore, it was held that the High Court has jurisdiction in appropriate cases to consider a challenge to an order of framing charge and furthermore, the High Court has jurisdiction to grant a stay of the trial proceedings. Thereafter, it proceeded to consider in which cases a stay of the proceedings ought to be granted. The Bench considered the question in the context of a criminal trial, particularly under the PC Act. The Constitution Bench was therefore, called upon to decide the correctness of the view taken in paragraphs 36 and 37 of the said decision.
The following two questions arose for consideration before the Supreme Court –
(a) Whether the Court, in the exercise of its jurisdiction under Article 142 of the Constitution of India, can order automatic vacation of all interim orders of the High Courts of staying proceedings of Civil and Criminal cases on the expiry of a certain period?
(b) Whether the Court, in the exercise of its jurisdiction under Article 142 of the Constitution of India, can direct the High Courts to decide pending cases in which interim orders of stay of proceedings has been granted on a day-to-day basis and within a fixed period?
The Court in the above regard noted, “… constitutional Courts should not normally fix a time-bound schedule for disposal of cases pending in any Court. The pattern of pendency of various categories of cases pending in every Court, including High Courts, is different. The situation at the grassroots level is better known to the judges of the concerned Courts. Therefore, the issue of giving out-of-turn priority to certain cases should be best left to the concerned Courts. The orders fixing the outer limit for the disposal of cases should be passed only in exceptional circumstances to meet extraordinary situations.”
The Court said that not every litigant can easily afford to file proceedings in the constitutional Courts and those litigants who can afford to approach the constitutional Courts cannot be allowed to take undue advantage by getting an order directing out-of-turn disposal of their cases while all other litigants patiently wait in the queue for their turn to come.
“The Courts, superior in the judicial hierarchy, cannot interfere with the day-to-day functioning of the other Courts by directing that only certain cases should be decided out of turn within a time frame. In a sense, no Court of law is inferior to the other. This Court is not superior to the High Courts in the judicial hierarchy. Therefore, the Judges of the High Courts should be allowed to set their priorities on a rational basis. Thus, as far as setting the outer limit is concerned, it should be best left to the concerned Courts unless there are very extraordinary circumstances”, it held.
Furthermore, the Court emphasised that even if interim relief is granted after hearing both sides, the aggrieved party is not precluded from applying for vacating the same on the available grounds and that in such a case, the High Court must give necessary priority to the hearing of applications for vacating the stay, if the main case cannot be immediately taken up for hearing.
“Applications for vacating interim reliefs cannot be kept pending for an inordinately long time. The High Courts cannot take recourse to the easy option of directing that the same should be heard along with the main case. The same principles will apply where ad-interim relief is granted. If an ad-interim order continues for a long time, the affected party can always apply for vacating ad-interim relief. The High Court is expected to take up even such applications on a priority basis. If an application for vacating ex-parte ad interim relief is filed on the ground of suppression of facts, the same must be taken up at the earliest”, it remarked.
The Court, therefore, concluded that there cannot be automatic vacation of stay granted by the High Court. The Court disapproved the direction issued to decide all the cases in which an interim stay has been granted on a day-to-day basis within a time frame. It also held that such blanket directions cannot be issued in the exercise of the jurisdiction under Article 142 of the Constitution.
The Court clarified that in the cases in which trials have been concluded as a result of the automatic vacation of stay based only on the decision in the case of Asian Resurfacing, the orders of automatic vacation of stay shall remain valid.
In his concurring opinion, Justice Pankaj Mithal said, “… 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. … the stay order granted in any proceedings would not automatically stand vacated on the expiry of a particular period until and unless an application to that effect has been filed by the other side and is decided following the principles of natural justice by a speaking order.”
He further observed that sometimes, in quest of justice we end up doing injustice and Asian Resurfacing is a clear example of the same.
“… we have to adopt a practical and a more pragmatic approach rather than a technical one which may create more problems burdening the courts with superfluous or useless work. It is well said that useless work drives out the useful work. Accordingly, it is expedient in the interest of justice to provide that a reasoned stay order once granted in any civil or criminal proceedings, if not specified to be time bound, would remain in operation till the decision of the main matter or until and unless an application is moved for its vacation and a speaking order is passed adhering to the principles of natural justice either extending, modifying, varying or vacating the same”, he added.
Accordingly, the Apex Court answered the questions and overruled its judgment.
Cause Title- High Court Bar Association, Allahabad v. State of U.P. & Ors. (Neutral Citation: 2024 INSC 150)
Page Source : Verdictum
