Stay Granted by High Courts Cannot Be Vacated Automatically | Supreme Court

Case Details: High Court Bar Association vs. State of U.P. - [2024] 160 taxmann.com 32 (SC)

Judiciary and Counsel Details

• • Pankaj Mithal, J.

Facts of the Case

In a landmark judgement, the Supreme Court has struck down the automatic vacation of stay orders. This means that if a High Court grants a stay on a case, it won’t automatically expire after a certain period. The Court must hear the matter and decide whether to vacate the stay.

In 2018, a three-judge Bench of the Supreme Court, in the case of Asian Resurfacing of Road Agency (P) Ltd vs CBI, criminal appeal nos. 1375-1376 of 2013 issued a directive stipulating that in all ongoing cases where a stay had been granted against civil or criminal trial proceedings, such stay would automatically lapse six months after the date of judgment unless extended by a speaking order.

The court decision in the case of Asian Resurfacing was met with a lot of criticism. People said the judgement was arbitrary and violated the principles of natural justice. The Court was also accused of overstepping its boundaries and trying to legislate. Thus, the matter reached before the larger bench of the Supreme Court for reconsideration.

Supreme Court Held

The Apex Court held that the directions issued in that case were obviously issued under Article 142 of the Constitution, which conferred jurisdiction on the Court to pass such a decree or make such order necessary for doing complete justice in any pending case.

This jurisdiction can be exercised to do complete justice between the parties before the Court. However, 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 were not parties to the proceedings.

Further, Article 142 did not empower the Court to ignore the substantive rights of the litigants. While exercising jurisdiction under Article 142 of the Constitution of India, the Apex Court can always issue procedural directions to the Courts to streamline procedural aspects and iron out the changes 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 the power of the Supreme Court under Article 142 cannot be exercised to defeat the principles of natural justice, which are an integral part of our jurisprudence.

Therefore, there cannot be automatic vacation of stay granted by the High Court. The Court also said that it was not possible to lay down any time schedules for the conclusion of civil/criminal proceedings.

The Court has also laid down procedures to be adopted by High Courts while passing interim orders of stay of proceedings and dealing with applications for vacating interim stay.