'Automatic Stay Vacation Prejudices Litigant' : Supreme Court Reserves Judgment In Reference Against 'Asian Resurfacing' Judgment

The Supreme Court today (December 13) reserved its judgement in the reference against the 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 trials will automatically expire after a period of six months unless the orders are specifically extended. The bench comprised Chief Justice of India DY Chandrachud, Justice Abhay S Oka, Justice JB Pardiwala, Justice Pankaj Mithal and Justice Manoj Misra. As per the Asian Resurfacing dictum, trial courts can automatically resume trials in criminal and civil cases, after six months from the stay orders passed by the higher courts (except the Supreme Court), without any further notice to the parties, if there is no extension order.

During the hearing, the CJI underscored two problems arising from the automatic vacation of stay orders– first, that it can adversely impact litigants irrespective of their conduct and second, that the act of vacating a stay was not administrative but judicial, requiring a thoughtful application of mind. However, in an automatic vacation directive, there could be no corresponding application of mind. 

The CJI remarked–

"There are two problems. One, the automatic vacation of stay prejudices the litigant irrespective of the conduct of that litigant. Because there are circumstances over which a litigant has no control. Second, the vacation of an order of stay is also a judicial act. It is not an administrative act. So by directing that the stay will stand vacated without application of mind a judicial order is enforced as a result of which the stay is effected without application of mind."

Courtroom Exchange

Delays In Court Proceedings A Result Of Systemic Issues, Not The Fault Of Individual Judges: CJI

Senior Advocate Rakesh Dwivedi, appearing for the High Court Bar Association Allahabad, argued against the automatic vacation of stay orders. Dwivedi contended that such a mechanism could interfere with the constitutional structure, particularly Article 226, and may be seen as judicial legislation. He proposed the creation of separate benches to consider extensions, emphasizing the importance of a nuanced approach to different case types.

He started by acknowledging the delay in court proceedings, specifically in certain High Courts such as the Allahabad High Court and the Patna High Court. To this, the CJI remarked–

"That is also what weighed with the judges. Otherwise, stay just continues for decades, particularly in larger High Courts."

Dwivedi pointed out that delays in legal proceedings are often exacerbated when accused individuals secure interim orders, taking advantage of the situation. He highlighted the adverse impact on trials, including frustration and potential memory lapses among witnesses as time elapses. He noted that delays were not solely the result of individual actions but could also be attributed to systemic faults within the judicial process. This included overburdened judges who struggled to manage extensive caseloads, leading to challenges in providing timely resolutions.

Chief Justice DY Chandrachud agreed with Dwivedi's assessment, particularly emphasizing the magnified problem in Allahabad and other larger High Courts like Karnataka and Bombay. He clarified that the issue stemmed not because of fault of individual judges but rather a consequence of the sheer volume of cases, making it practically impossible to address every matter on the docket promptly.

Solution Should Not Be Worse Than The Problem

When the CJI asked for solutions to the issue of vacation of stay, Dwivedi asked– "Do we find a solution which is greater than the disease?...the question is do we come up with some sort of formula to ensure there is application of mind...this is automatic vacation."

He asked if the correct approach to tackle delays was calling for the establishment of specialized benches in various legal disciplines. He stated that these dedicated benches would be responsible for considering and justifying the extension of stay orders.

Solicitor General (SG) Tushar Mehta highlighted instances where contempt cases were filed against judges, for not resuming trials on the strength of Asian Resurfacing, particularly in states like Punjab and Haryana. Mehta echoed Dwivedi's sentiment, suggesting that the solution might be more severe than the underlying issue of delayed justice.

Article 226 Part Of Basic Structure Of Constitution, Cannot Be Whittled Down: Senior Advocate Rakesh Dwivedi

The arguments by Senior Advocate Dwivedi covered the following points–

1. Article 226 Cannot Be Whittled Down 

Dwivedi highlighted the significance of Article 226 as a fundamental aspect of the constitutional framework. He argued that automatically vacating a stay meant that there was no application of mind by the judiciary and the same resulted in interference with the process of judicial review. He asserted that Article 226 was a part of the basic structure of the Constitution. "It can neither be shut out not whittled down either by constitutional amendment or by legislation and ought not to be whittled down or shut out in exercise of powers under Articles 141 and 142," he said by underlining that the High Court enjoyed a high constitutional status and it was not subordinate to the Supreme Court. 

2. Court Cannot Participate In Judicial Legislation

The Senior Advocate contended that the direction for the automatic vacation of interim orders constitutes judicial legislation, a departure from the court's usual role. Dwivedi argued that Article 226's constitutional standing should remain intact, safeguarded against undue interference, even through constitutional amendments or legislation. He said– "This direction for automatic vacation of interim order lays down a general norm and therefore it is in the nature of judicial legislation. This court doesn't engage in judicial legislation."

3. Automatic Vacation Of Stay Arbitrary & Discriminatory

Dwivedi underscored the arbitrary and discriminatory impact of the automatic vacation directive, emphasizing its general applicability across diverse cases, such as civil, criminal, and tax matters. He argued that this approach neglects the nuances of each case, disregarding the nature of jurisdiction and the determination of fault. He argued that the automatic vacation was neither hinged on application of mind by the High Court nor by the Supreme Court and such application of mind was the essence of judicial decision making without which the decision would be arbitrary. "The arbitrariness and the discriminatory character of this direction arises from the fact that it lumps together all sorts of cases- civil, criminal, tax irrespective of facticity of cases, nature of jurisdiction, and determination of fault," he added.

4. Speedy Trial Needs To Be Balanced

The Senior Advocate contended that the directive fails to strike a reasonable balance between the need for a speedy trial and the termination of vexatious trials. Dwivedi pointed to the court's past rulings, highlighting precedents like A.R. Antulay v R.S. Nayak, which, in his view, were being overlooked in the current context. He said– "Speedy trial includes early termination of vexatious trials also. This direction does not reasonably balance the two aspects."

5. High Court's Autonomy Has To Be Upheld

Dwivedi expressed concern about the potential downgrading of the High Courts' constitutional status, cautioning against limiting their powers. He urged for a more effective discharge of duties by the High Courts, emphasizing the need to rebuild their status rather than curb their powers.

Stipulating Timeframes Up To Competent Legislature: SG Mehta

1. Judicial Discretion Of Court Cannot Be Curtailed

The submissions of Dwivedi were followed by Solicitor General Mehta  who contended that the judicial discretion of High Courts could not be curtailed by a judicial mandamus or a continuing mandamus. He illustrated a scenario where an accused raised an issue in an Article 227 or 482 jurisdiction, and the High Court, after being satisfied, decided to stay the trial until a valid sanction is granted. SG Mehta argued that the six-month directive interfered with the High Court's discretion to determine the duration of the stay.

2. Strength Of Case Doesn't Diminish After 6 Months

SG Mehta cited the judgement in Indore Development Authority vs Manoharlal And Ors, emphasizing the principle of "actus curiae neminem gravabit", that is, the act of the court can prejudice no one. He also cited the Raza Bulland Sugar Company v Municipal Board of Rampur judgment, highlighting that nothing should be done behind the back of or in the absence of the litigant. Mehta argued that the strength of a case does not diminish after six months, and imposing time limits does not necessarily align with the overall scheme and intent of legislation. He said–

"After 6 months, the case will not become weak. It would remain strong unless heard. Balance of convenience will not tilt just because 6 months passed. Injury also..."

3. Stipulating Timeframe Up To Competent Legislature

SG Mehta argued that whenever a timeframe was stipulated, it was always for the competent legislature to do the same. He drew a distinction between specific legislations, such as the Insolvency and Bankruptcy Code (IBC) and the Arbitration Act, where the right to file an appeal lapses after a designated time frame. He argued that these time limits were implemented for a focused area that the court examined. However, the current directive was too broad, encompassing civil, criminal, appeals etc.

Essence Of Adjudicatory Process Lies In Judicial Discretion: Intervenors

Senior Advocate Vijay Hansaria, representing the Guwahati HC Bar Association, aligned with the concerns raised by Senior Advocate Rakesh Dwivedi and Solicitor General Mehta. Hansaria emphasized that any limitations should be imposed on the litigant and not the court, advocating for the preservation of judicial discretion.  

Advocate Amit Pai brought a real-world example to the forefront, detailing a criminal trial where advocates, accused as conspirators, faced challenges due to the implications of the Asian Resurfacing judgment. The litigants secured a stay in the High Court in 2014, but the stay was subsequently vacated, citing the Asian Resurfacing precedent. Pai argued that the essence of the adjudicatory process lies in judicial discretion, which, according to him, Asian Resurfacing has eroded. He expressed concern that the judgment has curtailed the High Court's discretion in granting interim orders, emphasizing that good intentions alone may not suffice Pai echoed the sentiment expressed by Dwivedi, noting the lack of specificity in the Asian Resurfacing judgment. He contended that while the intent behind preventing trial delays and promoting speedy trials is commendable, the judgment fails to provide clear guidelines, leaving room for ambiguity.

Background

It was on December 1 that a three-judge bench comprising CJI DY Chandrachud, Justice JB Pardiwala and Justice Manoj Misra referred Asian Resurfacing to a 5-judge bench, after expressing reservations about the dictum regarding automatic stay vacation.Incidentally, on the same day, another bench of the Supreme Court, comprising Justices Abhay S Oka and Pankaj Mithal, also expressed reservations about the judgment.

The matter listed before the CJI's bench was 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. The CJI-led bench observed that automatic vacation of stay can result in miscarriage of justice in some cases.

Case Title: High Court Bar Association Allahabad v The State Of Uttar Pradesh And Ors. Crl.A. No. 3589/2023