2024 (3) TMI 63 - SC - Indian Laws

Automatic Vacation of the interim order / Stay Order after six months - judicial legislation or not - Whether this 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? - Whether this 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? HELD THAT - There cannot be automatic vacation of stay granted by the High Court. 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, not approved. Such blanket directions cannot be issued in the exercise of the jurisdiction under Article 142 of the Constitution of India - both the questions framed is answered in the negative. Following conclusions have been arrived a. A direction that all the interim orders of stay of proceedings passed by every High Court automatically expire only by reason of lapse of time cannot be issued in the exercise of the jurisdiction of this Court under Article 142 of the Constitution of India; b. Important parameters for the exercise of the jurisdiction under Article 142 of the Constitution of India which are relevant for deciding the reference are as follows (i) The jurisdiction can be exercised to do complete justice between the parties before the Court. It cannot be exercised to nullify the benefits derived by a large number of litigants based on judicial orders validly passed in their favour who are not parties to the proceedings before this Court; (ii) Article 142 does not empower this Court to ignore the substantive rights of the litigants; (iii) While exercising the jurisdiction under Article 142 of the Constitution of India, this Court can always issue procedural directions to the Courts for streamlining procedural aspects and ironing out the creases in the procedural laws to ensure expeditious and timely disposal of cases. However, while doing so, this Court cannot affect the substantive rights of those litigants who are not parties to the case before it. The right to be heard before an adverse order is passed is not a matter of procedure but a substantive right; and (iv) The power of this Court under Article 142 cannot be exercised to defeat the principles of natural justice, which are an integral part of our jurisprudence. c. Constitutional Courts, in the ordinary course, should refrain from fixing a time-bound schedule for the disposal of cases pending before any other Courts. Constitutional Courts may issue directions for the time-bound disposal of cases only in exceptional circumstances. The issue of prioritising the disposal of cases should be best left to the decision of the concerned Courts where the cases are pending; and d. While dealing with the prayers for the grant of interim relief, the High Courts should take into consideration the guidelines prescribed. The reference is answered accordingly.

Summary

Issues Involved:
1. Directions in Asian Resurfacing.
2. Order of reference to Larger Bench.
3. Object of passing interim orders.
4. High Court's power to vacate or modify interim relief.
5. Whether an interim order can come to an end automatically only due to the lapse of time.
6. Scope of exercise of powers under Article 142 of the Constitution.
7. Position of High Courts and its power of superintendence.
8. Whether the Court should deal with an issue not arising for consideration.
9. Clause (3) of Article 226 of the Constitution.
10. Directions issued by the constitutional Courts to decide pending cases in a time-bound manner.
11. Procedure to be adopted by High Courts while passing interim orders of stay of proceedings and for dealing with the applications for vacating interim stay.

Summary:

I. Directions in Asian Resurfacing:
The Supreme Court in Asian Resurfacing dealt with the scope of interference by the High Court with an order of framing charge under the Prevention of Corruption Act, 1988. It held that an order of framing charge was neither interlocutory nor final, allowing the High Court jurisdiction to grant a stay of trial proceedings. The Court emphasized that stays should be granted only in exceptional cases and should be decided within two-three months to avoid undue delays.

II. Order of Reference to Larger Bench:
The Supreme Court referred the decision in Asian Resurfacing to a larger bench for reconsideration, questioning the automatic vacation of stay orders after six months and the directive for High Courts to decide cases on a day-to-day basis.

III. Object of Passing Interim Orders:
Interim orders are granted to aid the final relief sought and to avoid rendering the remedy infructuous. The High Courts should be cautious while granting stays, especially in serious cases, and should avoid orders of remand to prevent delays and increased litigation costs.

IV. High Court's Power to Vacate or Modify Interim Relief:
High Courts have the power to vacate or modify interim relief on grounds such as deliberate prolongation of proceedings, suppression or misrepresentation of facts, or material change in circumstances. Ad-interim orders should be of limited duration and can be converted into interim orders after hearing all parties.

V. Whether an Interim Order Can Come to an End Automatically Only Due to the Lapse of Time:
Interim orders can end by disposal of the main case or by a judicial order vacating the relief after hearing all parties. Automatic vacation of interim relief without hearing the beneficiary is against natural justice and would be manifestly arbitrary.

VI. Scope of Exercise of Powers under Article 142 of the Constitution:
Article 142 allows the Supreme Court to pass orders necessary for complete justice. However, it cannot be used to nullify substantive rights or to issue blanket orders affecting a large number of litigants not party to the proceedings. The power under Article 142 should be used to address extraordinary situations and ensure procedural fairness.

VII. Position of High Courts and its Power of Superintendence:
High Courts are constitutional courts with jurisdiction to issue prerogative writs and are not judicially subordinate to the Supreme Court. The power of superintendence under Article 227 includes the authority to stay proceedings. Limiting High Courts' jurisdiction to pass interim orders valid only for six months would infringe on their constitutional powers.

VIII. Whether the Court Should Deal with an Issue Not Arising for Consideration:
The Supreme Court should not address hypothetical or academic questions without a proper lis. The directions in Asian Resurfacing regarding the duration of interim orders did not arise from the case's specific facts and were thus inappropriate.

IX. Clause (3) of Article 226 of the Constitution:
Clause (3) of Article 226 applies to ex-parte ad interim orders and mandates automatic vacation of stay only if an application for vacating the stay is not decided within two weeks. It does not apply to interim orders passed after hearing all parties.

X. Directions Issued by the Constitutional Courts to Decide Pending Cases in a Time-bound Manner:
Constitution Benches have held that fixing timelines for case disposal amounts to judicial legislation, which is not permissible. While expeditious disposal of cases is ideal, the realities of judicial workload and pendency must be considered. Courts should avoid setting rigid timelines for case disposal unless in extraordinary circumstances.

XI. Procedure to be Adopted by High Courts While Passing Interim Orders of Stay of Proceedings and for Dealing with the Applications for Vacating Interim Stay:
High Courts should grant ad-interim relief for limited durations and prioritize hearing applications for vacating stay. Interim orders should be passed with sufficient indication of judicial application of mind and cannot be vacated without hearing the affected party.

Conclusions:
1. Automatic vacation of stay orders cannot be mandated under Article 142.
2. Parameters for exercising jurisdiction under Article 142 include ensuring complete justice, respecting substantive rights, and adhering to principles of natural justice.
3. Constitutional Courts should refrain from fixing time-bound schedules for case disposal, leaving prioritization to the concerned Courts.
4. High Courts should follow guidelines for granting and vacating interim relief as detailed in the judgment.

Separate Judgment by Justice Pankaj Mithal:
Justice Mithal concurred with the majority opinion, emphasizing that automatic vacation of stay orders should be triggered only by an application for vacating the stay, decided through a speaking order. He highlighted the need for a pragmatic approach to avoid injustice and unnecessary judicial burden.