Supreme Court Doubts 'Asian Resurfacing' Judgment On Automatic Stay Vacation; Refers To 5-Judge Bench

In a significant development, the Supreme Court on Friday (December 1) expressed reservations about its 2018 judgment in Asian Resurfacing of Road Agency P. Ltd. Director V. Central Bureau of Investigation as per which interim orders of stay granted by High Courts and other courts in civil and criminal cases will automatically expire after a period of six months unless the orders are specifically extended. 

In Asian Resurfacing, the Court further stated that the trial courts may, on expiry of the period of six months, can resume the proceedings without waiting for any other intimation unless express order extending stay is produced.

Observing that automatic vacation of stay can result in miscarriage of justice in some cases, a three-judge bench comprising Chief Justice of India DY Chandrachud, Justice JB Pardiwala and Justice Manoj Misra referred the matter to a larger bench for reconsideration. This was in view of the fact that Asian Resurfacing was also rendered by a coordinate bench of three judges.

The bench was considering an appeal filed by the High Court Bar Association Allahabad based on a Certificate of Appeal granted by the Allahabad High Court which raised a set of doubts regarding the Asian Resurfacing judgment. In its judgment delivered on November 3, a 3-judge bench of the Allahabad High Court framed ten questions for the deliberation of the Supreme Court in relation to the dictum of automatic vacation of stay.

Senior Advocate Rakesh Dwivedi, appearing for the High Court Bar Association, submitted that the judgment was creating several difficulties. He pointed out that in Asian Resurfacing, the bench was considering another legal issue and the directions relating to automatic stay vacation were in fact in the nature of obiter.

The bench led by the CJI expressed agreement with some of the concerns raised by Dwivedi.

"While there is no gainsaying that stays off indefinite nature will result in prolonging the civil or criminal proceedings unduly, at the same time, it needs to be factored in that the delay is not always on account of the conduct of the parties involved. Delay may also be occasioned by the inability of the courts to take up the proceedings expeditiously," the bench observed in the order.

The bench also noted that in Asian Resurfacing, the actual issue was whether an order framing charges was an interlocutory order and whether the High Court had the power to stay an order framing charges. However, while answering these issues, the bench in Asian Resurfacing proceeded to issue directions regarding the automatic vacation of stay orders passed by High Courts and other Courts in relation to civil and criminal trials.

The bench observed in the order as follows : 

"The above directions of this court indicate that in all matters, whether civil or criminal, orders of stay, which have once been granted, should not continue beyond a period of six months, unless specifically extended and the stay shall stand vacated automatically.

We have reservations in regard to the correctness of the the broad formulation of the principles in the above terms.

We are of the view that the principle which has been laid down in the above decision to the effect that a stay shall be automatically stand vacated (which would mean an automatic vacation of stay without the application of judicial mind to whether the stay should or should not be extended further) is liable to result in a miscarriage of justice."

While referring the matter to a larger bench of five judges, the Court also requested the assistance of either the Attorney General for India or the Solicitor General of India.

CJI said that the matter will be listed on an early date. "We have to really reconsider Asian Resurfacing. In fact, the Registrar told me that there is a review pending in Asian Resurfacing itself. We will list it early. In fact it won't take more than half an hour to resolve", CJI told Dwivedi after dictating the order.

Recently, a bench comprising Justices BR Gavai and PK Mishra had orally observed that the Asian Resurfacing judgment was creating difficulties.

In August 2019, the Supreme Court had clarified that the six months cap on interim stay orders will not be applicable to Supreme Court orders. If the interim order granted by the Supreme Court is not vacated and continues beyond a period of 6 months by reason of pendency of the appeal, it cannot be said that the interim order would automatically stand vacated, the Court had said.

Case Title : HIGH COURT BAR ASSOCIATION ALLAHABAD v. THE STATE OF UTTAR PRADESH AND ORS | Crl.A. No. 3589/2023

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