Apex Court cannot order automatic vacation of the interim orders of the High Courts of staying without passing a speaking order

[CA Bimal Jain]

The Hon’ble Supreme Court in the case of HIGH COURT BAR ASSOCIATION, ALLAHABAD VERSUS STATE OF U.P. & ORS. - 2024 (3) TMI 63 - SC ORDER held that the Hon’ble Apex Court, in the exercise of its jurisdiction under Article 142 of the Constitution of India, cannot 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 without passing a speaking order. It can also 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.

Facts:

In the case of ASIAN RESURFACING OF ROAD AGENCY PVT. LTD. AND ANR. VERSUS CENTRAL BURUEAU OF INVESTIVATION - 2018 (4) TMI 3 - SUPREME COURT (“Asian Resurfacing”), the Hon’ble Supreme Court had dealt with the scope of interference by the Hon’ble Allahabad High Court with an order of framing charge passed by the Special Judge under the provisions of the Prevention of Corruption Act, 1988 (“the PC Act”). The issue was whether an Order of framing charge was an Interlocutory Order. The Hon’ble Allahabad High Court held that an Order of framing charge under the PC Act was interlocutory.

A bench of two Hon’ble Judges of the Apex Court, by the Order dated September 09, 2013, referred the case to a larger Bench to consider the issue of whether the case of MOHAN LAL MAGAN LAL THACKER VERSUS STATE OF GUJARAT - 1967 (12) TMI 69 - SUPREME COURT was correctly decided. A Bench of three Hon’ble Judges 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 charges. 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.

A Miscellaneous Application was filed in the decided case, in light of the Order passed on December 04, 2019 by the Ld. Additional Chief Judicial Magistrate, Pune. When the Ld. Magistrate was called upon to proceed with the trial on the ground of automatic vacation of stay after the expiry of a period of six months, the Ld. Magistrate expressed a view that when the jurisdictional High Court had passed an order of stay, a Court subordinate to the High Court could not pass any order contrary to the order of stay.

By the Order dated October 15, 2020, the Supreme Court held that when the stay granted by the High Court automatically expires, unless an extension is granted for good reasons, the Trial Court, on expiry of a period of six months, must set a date for trial and go ahead with the same.

Later, an attempt was made to seek clarification of the law laid down in the case of Asian Resurfacing. The Apex Court, by the Order dated April 25, 2022, did not apply the direction issued in Asian Resurfacing to the facts of the case before it. An attempt was made to apply the directions to an order of stay on the order of the Ld. Single Judge of the High Court passed by a Division Bench in a Letters Patent Appeal.

In the Order dated December 01, 2023 (“Impugned Order”), a Bench of three Hon’ble Judges of the Apex Court expressed a view that a decision of the Apex Court in the case of Asian Resurfacing requires reconsideration by a larger Bench. Hence, the present appeal was filed before the Apex Court.

Issue:

Whether the Hon’ble Apex Court can order automatic vacation of all interim orders of the High Courts of staying proceedings on the expiry of a certain period and 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?

Held:

The Hon’ble Apex Court in HIGH COURT BAR ASSOCIATION, ALLAHABAD VERSUS STATE OF U.P. & ORS. - 2024 (3) TMI 63 - SC ORDER held as under:

• Observed that, in the case of Asian Resurfacing, the Apex Court directed that where a challenge to an order framing charge is entertained and stay is granted, in such cases the matter must be decided on day-to-day basis so that the stay may not continue for an unduly long time. Further, though no mandatory time limit may be fixed for deciding such a challenge. The stay order may not normally exceed two to three months or a maximum of six months unless it is extended by a specific speaking order. All the pending matters before the High Court or other Courts relating to the PC Act or all other civil or criminal cases where the stay is operating in pending trials, will automatically lapse after six months unless a speaking order is passed extending the same. The Trial Court may, on expiry of the above period, resume the proceedings without waiting for any intimation unless an express order extending the stay is produced before the Court.
• Noted that, the directions in Asian Resurfacing issued were in exercise of power of Article 142 of the Constitution of India which are similar to the constitutional provision as contained in clause (3) of Article 226 of the Constitution of India. This is in respect to petitions filed before the High Court invoking the extraordinary jurisdiction of the Court is not meant to be applied specifically to other proceedings, nonetheless the principles behind the said provision can always be extended to other proceedings as has been done in Asian Resurfacing. When the time limit has been prescribed or is fixed for deciding a particular nature of proceeding, it has been held to be directory in nature rather than mandatory. So, appears to be the position with regard to the applicability of Article 226(3) of the Constitution of India.
• Observed that, no one can be made to suffer on account of any mistake or fault of the Court which means that even delay on part of the Court in deciding the proceedings or any application therein would not be detrimental to any of the parties to the litigation much less to the party in whose favour an interim stay order is passed.
• Opined 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.
• Noted that, Article 226(3) of the Constitution of India, the automatic vacation of the stay order envisages making of an application to the High Court for the vacation of the interim stay order. Therefore, filing 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) of the Constitution of India if such an application is not decided within the time prescribed of two weeks.
• Held that, 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. 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.

(Author can be reached at info@a2ztaxcorp.com)