In a landmark judgement¹ dated February 29, 2024, a five-judge bench of the Supreme Court overturned its 2018 decision by a three-judge Bench in Asian Resurfacing² and held that a direction that all interim orders passed by the High Court or lower Courts will automatically expire after six months cannot be issued in exercise of powers under Article 142 of the Constitution of India³. The Supreme Court, while doing so, also affirmed that the Supreme Court or High Courts should refrain from setting a specific timeframe for resolving pending cases in any court when exercising authority under Article 142 of the Constitution of India.

The 2018 judgement in Asian Resurfacing (supra), which came under Supreme Court’s scrutiny, directed stay orders to be automatically vacated without requiring courts to provide reasons or consider the circumstances of each case. The ruling stipulated that Trial Courts could resume proceedings after six months from issuance of stay orders by higher Courts. Subsequently, the Supreme Court in August 2019 clarified that the six-month cap on interim stay orders will not be applied to Supreme Court orders. Thereafter, in November, a three-judge bench of the Allahabad High Court, while rejecting a reference regarding the directions in Asian Resurfacing (supra), framed ten questions of law for the Supreme Court to consider. It also granted a certificate of appeal to applicants, allowing them to approach the top court.

While hearing the reference, the five-judge bench of the Supreme Court underscored two crucial concerns stemming from the automatic vacation of stay orders. Firstly, they observed that this process might negatively affect litigants without taking into account their individual circumstances or behaviour. Secondly, they stressed that the vacation of a stay order is a judicial action, not an administrative one, requiring a judicious exercise of judicial discretion.

The High Court Bar Association Allahabad, which had intervened in the case before the Allahabad High Court, argued against the automatic vacation of stay orders. They expressed reservations regarding the possible infringement on the constitutional framework, specifically emphasizing Article 226 of the Constitution of India⁴, which grants High Courts the authority to issue writs. Additionally, they proposed the establishment of specialized benches to review extensions, emphasizing the importance of adopting a nuanced approach based on the nature of each case.

The Court clarified that the directives in Asian Resurfacing (supra) concerning the automatic vacation of stay were issued within the jurisdiction exercised under Article 142. The Court started by discussing the purpose behind issuing interim orders, which, according to the judgment in question, seemed to be overlooked. It was elucidated that an interim relief order is typically granted in support of the final relief sought in the case. The need for issuing a stay order on proceedings usually arises when the High Court is addressing a challenge to an interim or interlocutory order issued during the ongoing main case before a trial or appellate Court. The High Court can grant a stay of the main proceedings if it is satisfied that a prima facie case exists and that the failure to stay the proceedings before the relevant Court is likely to render the adopted remedy ineffective.

Addressing the High Court’s authority to revoke or alter interim relief, the Court explored key reasons for such actions. It also alluded to situations when a temporary stay order might cease, either upon the resolution of the main case or through a judicial order revoking the interim relief. Additionally, the Court reiterated the fundamental principles of natural justice, emphasizing the necessity of hearing all affected parties before issuing an order to revoke or modify interim relief. The statement emphasized that a legally sanctioned interim order, made after a comprehensive hearing of all contesting parties, does not become unlawful merely due to passage of time. The Court while expressing concern on the application of Asian Resurfacing (supra) specifically regarding the automatic vacation of interim stay orders by all High Courts, irrespective of the merits of individual cases, stated that if a High Court, after hearing all relevant parties, determines that a case justifies the stay of civil or criminal proceedings, the stay order should not automatically be set aside after six months solely because the High Court could not hear the main case.

Shedding light on the extent of authority conferred by Article 142 of the Constitution, the Court clarified that its purpose is to advance the cause of justice and ensure complete justice and directives should not be issued to obstruct justice. The Court reflected upon a number of its judgements to illustrate that the jurisdiction under Article 142 should not be utilized to issue broad orders nullifying a substantial number of lawful interim orders from all High Courts, especially without giving the opposing parties a chance to be heard. The Court further emphasized that invoking Article 142 is reserved for addressing exceptional situations to achieve complete justice among the parties involved. Additionally, the Court highlighted that a High Court, being a constitutional court and not judicially subservient to the Supreme Court, possesses the power under Article 227 of the Constitution of India⁵ to exercise judicial supervision over all Courts within its jurisdiction, including the authority to stay proceedings before such Courts. The Court argued that imposing restrictions on High Court's power, particularly when utilizing Article 142, could impinge on its jurisdiction to grant interim relief, limiting it to issuing interim orders valid for six months at a time. It further stated that such constraints would undermine the jurisdiction of High Courts under Article 226 of the Constitution which is an integral aspect of the Constitution’s basic structure.

Conclusion
Thereafter, the five-judge bench of the Supreme Court held that while exercising the jurisdiction under Article 142 of the Constitution of India, the Supreme Court can always issue procedural directions to the lower Courts for streamlining procedural aspects to ensure timely disposal of cases. However, while doing so, the Supreme Court cannot affect the substantive rights of the litigants. It was further held that Supreme Court and High Courts, in the ordinary course, should refrain from fixing a time-bound schedule for the disposal of cases pending before any other Courts except 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 as judges of the concerned Courts are more familiar with the situation at the grassroots level. Additionally, the Court issued a directive that, to prevent prejudice to opposite parties, High Courts should typically grant ad-interim relief for a limited duration when providing ex-parte ad-interim relief without hearing the affected parties.

By - Prachi Pandey