A constitutional bench of the Supreme Court of India ("SC") has held that there shall be no automatic vacation of stay orders granted by a High Court ("HC"), reversing the earlier position expressed in a 3-judge SC decision in Asian Resurfacing of Road Agency Private Limited & Anr v Central Bureau of Investigation1 ("Asian Resurfacing").
Background
In the Asian Resurfacing case, the SC exercised its powers under Article 142 of the Constitution to rule that a stay order from a superior court must be reasoned, it will automatically expire after 6 months if not extended, and the court which was hearing the stayed proceedings must list the matter for a hearing after 6 months have lapsed from the date of the stay order. Additionally, the court should hear those cases where a stay has been granted on a day-to-day basis.
Despite the ruling in Asian Resurfacing, the lower courts were not listing stayed cases after 6 months had elapsed from the stay order. The present ruling arose out of multiple appeals from different courts filed for non-compliance with the Asian Resurfacing ruling.
Issues before the SC
- Does Article 142 of the Constitution of India empower the SC to order the automatic vacation of stay orders upon the expiration of a specific time period?
- Can the SC direct the HCs to adjudicate, on a day-to-day basis, those cases involving an interim stay order?
Ruling of the SC
The Constitution Bench concluded that automatic vacation of stay orders cannot be mandated. The reasons were:
- The objective of interim orders is to aid in the final relief sought in a case. Since an interim stay order is granted after hearing both the parties, the automatic vacation of such orders without hearing both parties would violate the principles of natural justice. Such orders should end either with case disposal or specific and reasoned vacation orders.
- The powers under Article 142 cannot be used to mandate the automatic vacation of a stay orders as it amounts to judicial legislation, and a court's constitutional power of granting a stay or its powers to decide the frequency of hearing cases cannot be curtailed, save for certain situations such as offences against women and children, etc.
- The SC differentiated the powers of the High Court under Article 226(3) to automatically vacate interim orders by reasoning that this is available only for ex-parte ad interim orders (which are temporary) and the said power is directory. Ex-parte ad interim orders, by their very nature, have a limited duration and are not a covered under the present ruling.
- The High Court must prioritize applications to vacate the stay orders and if it is found that an interim relief was obtained by the suppression of facts, an application seeking its revocation must be heard at the earliest.
Conclusion
An order granting stay on the proceedings that is passed after hearing both the parties will not be automatically vacated after 6 months and will only be vacated by an order of a court on an application seeking the vacation of a stay.
Footnote
* Crl Appeal No 3589 of 2023
1. (2018) 16 SCC 299
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