Supreme Court Overrules Its 2018 Verdict: No Automatic Vacation Of Stay Orders Of High Courts On Civil & Criminal Trials

Supreme Court Overrules Its 2018 Verdict: No Automatic Vacation Of Stay Orders Of High Courts On Civil & Criminal Trials

In a landmark decision, a constitution bench of the Supreme Court overturned its 2018 Asian Resurfacing judgment. The court firmly emphasized that it cannot issue directives mandating interim orders to automatically expire after a specified period under Article 142 of the Constitution.

The latest ruling was delivered by a five-judge bench led by Chief Justice DY Chandrachud, alongside Justices Abhay S Oka, JB Pardiwala, Pankaj Mithal, and Manoj Misra. While the verdict was unanimous, Justice Oka authored the lead judgment, with Justice Mithal providing a concurring opinion.

The 2018 Asian Resurfacing ruling, subject to scrutiny by the Supreme Court, directed that stay orders be automatically vacated without requiring courts to provide reasons or consider the circumstances of each case. It mandated that trial courts could resume proceedings after six months from the issuance of stay orders by higher courts. However, in August 2019, the Supreme Court clarified that the six-month cap on interim stay orders would not apply to Supreme Court orders.

The original judgment, delivered by a three-judge bench comprising Justices AK Goel, Navin Sinha, and Rohinton Nariman, mandated automatic stay vacation after six months unless extended by a speaking order in exceptional cases. This speaking order needed to demonstrate that the case warranted continued stay more than finalizing the trial. Despite reaffirmation by the Supreme Court in October 2020, the verdict faced criticism. In September of the following year, a bench led by Justice BR Gavai remarked orally that it required serious consideration.

In November, a three-judge bench of the Allahabad High Court, while rejecting a reference concerning the directions in the Asian Resurfacing judgment, framed ten questions of law for the apex court to review. It also granted a certificate of appeal to applicants, enabling them to approach the Supreme Court.

During the appeal hearing, a three-judge bench led by Chief Justice Chandrachud expressed reservations about the Asian Resurfacing judgment, citing concerns about potential miscarriages of justice. Consequently, the court referred its earlier decision to a larger bench for reconsideration. In its order, the bench noted that while indefinite stays prolong civil or criminal proceedings, delays may not always be due to the parties' conduct, but also due to the court's inability to expedite proceedings. The principle of automatic vacation of stay, without judicial consideration, was deemed liable to result in serious miscarriages of justice.

Disagreeing with the directives delineated in paragraphs 36 and 37 of the Asian Resurfacing judgment, the court, as articulated by Justice Oka, affirmed that "a direction that all interim orders of stay on proceedings passed by every high court will automatically expire only by reason of lapse of time cannot be issued in exercise of the jurisdiction of this court under Article 142 of the Constitution."

Crucially, the court also emphasized that constitutional courts should refrain from imposing fixed schedules for the resolution of cases in lower courts. It highlighted that directives for time-bound case disposal may only be issued in exceptional circumstances.

Acknowledging the varied patterns of case backlog across different courts, the bench emphasized the significance of judges being attuned to the specific circumstances within their jurisdiction. The court highlighted that assigning out-of-turn priority to particular cases should be entrusted to the discretion of the presiding judge, who is best positioned to assess the local context and allocate resources accordingly.

The court clarified that only the legislature holds the authority to mandate that cases of a specific category must be adjudicated within a designated timeframe. While numerous statutes may include such provisions, the court noted that such directives are typically considered as guidelines rather than strict mandates.

In the judgment written by Justice Oka, it is highlighted that not every litigant can readily afford to approach the constitutional courts for legal proceedings. Therefore, it would be unfair to allow those who can afford such access to gain undue advantage by securing orders for expedited disposal of their cases, while others patiently await their turn. The judgment emphasizes that courts higher in the judicial hierarchy should refrain from interfering with the day-to-day operations of lower courts by dictating that only specific cases be prioritized for expedited resolution within a set timeframe. It underscores the principle that no court is inherently superior to another in the judicial hierarchy, and thus, judges of lower courts should be permitted to establish their case priorities based on rational considerations. The judgment advocates for allowing lower courts to determine their own case management strategies, except in very extraordinary circumstances.

The court observed that "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."

In his concurring opinion, Justice Pankaj Mithal stressed the significance of judicial discretion regarding stay orders, asserting that a stay order backed by reasoning should remain in effect until the conclusion of the main matter or until the order undergoes extension, modification, variation, or vacation, unless explicitly designated as time-bound. His position aligns with the broader perspective of the bench, which prioritizes a case-by-case approach over the application of a uniform rule.

Ateev Mathur, Partner-Head Dispute Resolution, SNG & Partners, Advocates & Solicitors gave his insight on the decision stating, “The earlier regime pursuant to the judgment of Supreme Court in the matter of Asian resurfacing had mandated that the interim orders passed by the Supreme Court or High court would automatically stand vacated after expire of 6 months, unless extended by judicial order. This had caused a lot inconvenience to the litigant and entire judicial system. In a country like India where dockets of the courts are always overflowing, it is not always a litigants fault for a prolonged litigation. It is a welcome judgement by the Supreme Court which is in line with the cardinal principle of law that no one should be condemned unheard. An interim protection granted by a superior court should not be vacated by any automated mode. Supreme Court has today clarified that interim order granted by Supreme Court or High Court would continue to remain in operation until and unless they are modified or varied by a judicial order by such courts. The judgment pronounced today is certainly a much needed verdict by a larger bench.”