CASE DETAILS:
| Bench D.Y. Chandrachud C.J. A.S. Oka J. J.B. Pardiwala J. Pankaj Mithal J. Manoj Mishra J. | Case no. (2024) 6 SCC 267 | Acts/law Constitution of India |
INTRODUCTION:
In HIGH COURT BAR ASSOCIATION ALLAHABAD V/s STATE OF UP AND OTHERS constitution bench of the apex court unanimously held and scrutinized a significant issue concerning automatic vacation of stay. The Hon’ble Court was called upon to check the correctness of the decision rendered by another bench of 3 judges in Asian Resurfacing of Road Agency (P) Ltd. vs. CBI (2018) 16 SCC 299. The court looked into the extent of power under Article 142 of the Constitution of India, the object of passing the interim order, the power to vacate and modify the interim order, and whether an interim order can vacate automatically.
ASIAN RESURFACING:
In the said case Supreme Court dealt with the scope of interference by the High Court in an order concerning framing of charges passed under Prevention of Corruption Act, 1988. The issue before the court was whether the order with regard to the framing of issues is interlocutory order or not. Three judges bench ascertained that it is neither final nor interlocutory and the High court has jurisdiction to consider the challenge against the order of framing of charges. Furthermore, the High court has jurisdiction to stay trail court proceedings, court in para 30 and 31 of the said instance case evaluated that in which cases court will grant stay of proceedings. The said exercise of power ought to be coupled with application of mind.
“30. It is well accepted that delay in a criminal trial, particularly in the PC Act cases, has deleterious effect on the administration of justice in which the society has a vital interest. Delay in trials affects the faith in Rule of Law and efficacy of the legal system. It affects social welfare and development. Even in civil or tax cases it has been laid down that power to grant stay has to be exercised with restraint. Mere prima facie case is not enough. Party seeking stay must be put to terms and stay should not be an incentive to delay. The order granting stay must show application of mind. The power to grant stay is coupled with accountability.
31. Wherever stay is granted, a speaking order must be passed showing that the case was of exceptional nature and delay on account of stay will not prejudice the interest of speedy trial in a corruption case. Once stay is granted, proceedings should not be adjourned, and concluded within two-three months.”
(Emphasis supplied)
Further the Bench exercised power under 142 of Constitution thereby directing to conduct day to day hearing and vacation of stay orders without giving chance of hearing to litigants. In the said judgment court evaluated as following in para 36 and 37:
“36 …..we consider it appropriate to direct that in all pending cases where stay against proceedings of a civil or criminal trial is operating, the same will come to an end on expiry of six months from today unless in an exceptional case by a speaking order such stay is extended. In cases where stay is granted in future, the same will end on expiry of six months from the date of such order unless similar extension is granted by a speaking order. The speaking order must show that the case was of such exceptional nature that continuing the stay was more important than having the trial finalized…..
37 …..the challenge to an order of charge should be entertained in a rarest of rare case only to correct a patent error of jurisdiction and not to reappreciate the matter. Even where such challenge is entertained and stay is granted, the matter must be decided on day-to-day basis so that stay does not operate for an unduly long period. Though no mandatory time-limit may be fixed, the decision may not exceed two-three months normally. If it remains pending longer, duration of stay should not exceed six months, unless extension is granted by a specific speaking order, as already indicated. …… In all pending matters before the High Courts or other courts relating to the PC Act or all other civil or criminal cases, where stay of proceedings in a pending trial is operating, stay will automatically lapse after six months from today unless extended by a speaking order on the above parameters……”
(Emphasis supplied)
In the case in hand a constitution bench was called upon to look into the correctness of the view advanced in aforesaid paragraph no. 36 and 37.
ISSUES:
- Whether court can in exercise of its jurisdiction under article 142 of Constitution of India, can pass an order of automatic vacation of interim/stay orders of the High Courts of staying proceedings of civil or criminal cases on the expiry of certain period?
- Whether this court under article 142 can direct the High courts to decide pending case in which interim order of stay of proceedings has been granted, on day-to-day basis and within a fixed period?
CONTENTIONS:
It was contended that automatic vacation of stay is judicial legislation which is not permissible under law. Article 226 is part of basic structure and by exercising power under 141 and 142 of the constitution the power of the High Court can not whittled down. An order for the interim order can not be passed without application of mind otherwise same will be construe arbitrary similarly automatic vacation of interim order without application of mind will result into arbitrariness.
CASES REFERRED:
CIT vs. Pepsi Foods Ltd. (2021)7 SCC 413: wherein court struck down section 254(2-A) which provided that when an appeal before arbitral tribunal is disposed of within 365 days, the stay order passed by arbitral tribunal shall stand vacated. Court held the said provision is arbitrary and automatic vacation of interim relief is unjust, unfair and unreasonable.
Kailash vs. Nanku (2005)4 SCC 480: wherein court held that process of justice can be speedup however fairness cannot be buried. The discretion conferred on high court cannot be taken away by exercising the power under article 142 of Constitution.
ANALYSIS:
1. Object of passing interim orders:
Hon’ble court opined that interim order is usually passed in aid of final order while passing such order a judge will ascertain 3 factors viz. prima facie case, balance of convenience, and irreparable loos to the other party. High court grant the stay of proceedings only when the court is satisfied that prima facie case is made out and failure to stay the proceedings will render the remedy adopted infructuous.
2. High Court’s power to vacate and modify interim order:
The high court grant an opportunity of being heard to contesting party while passing the order of stay of proceedings before the lower court such an order is interim order. However, if the High court do not give an y sort of opportunity to opposite party such an order is ad interim order in fact same ought to be for minimum duration. High court has power to vacate the said interim order in following circumstances though these are not exhaustive:
- If the party to the case deliberately prolong the proceedings for instance taking adjournments on unwarranted grounds;
- Interim order was passed as a result of suppression of facts or misrepresentation of material facts;
- Change in circumstances which require modification of said interim order; list is not exhaustive as held by the court.
3. Automatic vacation of stay only due to laps of time:
Interim order of stay come to an end when:
- Disposal of main case by the High court either on merits or default of party or any other reason such as abatement;
- Vacation of stay order after hearing the parties.
Further court over ruled the finding of the bench in Asian Resurfacing (supra) case regarding the automatic vacation of the stay on lapse of time. Court observed that it is against the mandate of natural justice and moreover there has to be application of mind for vacation of stay order and both the parties must be heard. Parties should not suffer due to the fault of the court for non-conclusion of proceeding in time.
Further direction in Asian Resurfacing case to the trial courts to fix the date of hearing on completion of 6 months without even waiting for the vacation of stay order will render the remedy available under 226 and 227 of the constitution nugatory.
Additionally, court considered the aforesaid judgment referred Pepsi Foods (supra) and held that even when the legislature were to come out with such a provision for automatic vacation of stay, the same may not stand judicial scrutiny as it may suffer from manifest arbitrariness.
4. Scope of exercise of power under Article 142 of constitution:
Article 142 of Constitution confer power on the Supreme court to pass such an order which is necessary for doing complete justice. The court exercised power under Article 142 while passing direction in Asian Resurfacing Case. However, the question concerning the duration of interim order passed by the High courts did not specifically arise for consideration in Asian Resurfacing case.
To impute the jurisdiction under article 142 the court relied on Supreme court bar ass. Vs. Union of India (1998)4 SCC 409: wherein the court evaluated that “48. The Supreme Court in exercise of its jurisdiction under Article 142 has the power to make such order as is necessary for doing complete justice “between the parties in any cause or matter pending before it” ….. this Court is not a court of restricted jurisdiction of only dispute-settling. It is well recognized and established that this Court has always been a law-maker and its role travels beyond merely dispute-settling.
In para no. 27 of the case in hand court gave following finding for the scope of the power under article 142 of the Constitution of India:
- Jurisdiction can be exercised to do complete justice between the parties;
- Article 142 does not empower the court to ignore substantive rights of litigants;
- Right to be heard must be given to the parties as same is the substantive right and not procedural aspect, though this court is not bound by the procedural requirements of law while exercising power under Article 142;
- Power under Article 142 can not be exercised to defeat the principle of natural justice which is integral part of jurisprudence.
5. Position of High court and its power of superintendence:
In Tirupati Balaji Developers (p) ltd. vs. state of Bihar (2004)5 SCC 1 also in L Chandra Kumar vs. Union of India (1997) 3 SCC 261: it is well settled principle of law that High court is a constitutional court of law and not a subordinate court.
In para no. 30 court analyzed the issue wherein bench in Asian resurfacing set a limitation of 6 months for the validity of interim order passed thereby precluding power of High courts which is envisaged by the constitution.
30. The power of the High Court under Article 227 of the Constitution to have judicial superintendence over all the courts within its jurisdiction will include the power to stay the proceedings before such courts. By a blanket direction in the exercise of power under Article 142 of the Constitution of India, this Court cannot interfere with the jurisdiction conferred on the High Court of granting interim relief by limiting its jurisdiction to pass interim orders valid only for six months at a time. 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.
6. Whether court should deal with an issue not arising for consideration:
In Asian Resurfacing there was no issue before the bench regarding the stay granted in different cases it was an issue only under PC act. However, court exercised its power under 142 with regard to all the category of cases including civil and criminal.
Court in the present case emphasized on the finding of the Sanjeev Coke Mfg. Co. vs. Bharat Coking Coal Ltd. (1983) 1 SCC 147: wherein it was observed that “…..it is but right that no important point of law should be decided without a proper lis between parties properly ranged on either side and a crossing of the swords. We think it is inexpedient for the Supreme Court to delve into problems which do not arise and express opinion thereon.”
7. Directions issued by constitutional court to decide pending cases in a time bound manner:
The net effect of Asian Resurfacing judgment is that High court need to decide the case within 6 months in which it has granted stay of proceedings otherwise stay will automatically vacate. Thus, the direction of deciding the case on day-to-day basis and automatic vacation of stay both are judicial legislation. Only legislature could exercise such power and jurisdiction of this court can not be exercised to make such judicial legislation.
8. Procedure for High court for passing of interim order and for vacation of interim stay order:
To avoid any prejudice to the opposite party the High court can pass an ad interim order for limited duration further said order could be affirmed or vacated after hearing the opposite party and application of mind.
After the grant of interim relief same could not be vacated without giving chance of hearing to the beneficiary of the said order. Even when the interim relief is granted the opposite party is not precluded to file an application concerning the vacation of stay order. Besides the court is also not barred to decide the said application where the main case cannot be immediately taken up for hearing.
CONCLUSION:
Court overruled the finding of Asian Resurfacing case made in para 36 and 37 thereby there cannot be any automatic vacation of stay and moreover court did not approve the direction to decide the case on day-to-day basis.
The stay order will not automatically vacate under Article 226(3) and filing of an application for invoking the automatic vacation of stay order is sine qua non moreover said application is decided following the principle of natural justice by a speaking order.