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Law relating to Automatic Vacation of Stay by & post-Asian Resurfacing Case
Written by
Vandana Singh Katiyar
Researcher & Advocate
High Court Lucknow Bench
&
Vijay KatiyarDeputy DirectorJTRI, UP, Lucknow
Introduction-
As you know India is a big country and has the second-largest population in the world. Cases in India can take years to be disposed of. The stay of proceedings on account of interim orders has been greatly responsible for causing inordinate delay in the disposal of cases. These orders typically stay effective unless expressly vacated, or until a final order is passed, which then subsumes the interim order. Interim orders that stay proceedings before a subordinate court are often misused by litigants as a dilatory tactic to maintain the status quo in their favor. The subordinate courts account for 87% of India’s pending cases. A greater challenge faced by the judiciary and litigants alike is the delay in the determination of cases at the appellate level, which in turn leads to endless wait for a determination of matters even at the trial stage. The Ministry of Law estimates that a trial is delayed by about 65 years due to the stay of proceedings by higher courts. Due to this situation, Hon’ble Supreme Court has passed an order that speedy justice is a fundamental right under article-21 of the Constitution of India.
Whether stay is automatically vacated after the expiry of six months-
The Hon’ble Supreme Court of India dealt with the issue of undue delay in trials caused by stays and noted that once a stay is granted, disposal of the petition before the High Court takes a long time. The Hon’ble Supreme Court also emphasized the accountability of the courts while granting a stay of proceedings and held that such matters should be disposed of in two-three months without allowing any adjournments. To ensure speedy disposal of such cases, the Supreme Court directed that a stay of trial proceedings before civil and criminal appellate/revisional courts ordered by a High Court or a court below High Court shall automatically expire in six months From the date of order as the case may be unless extended by a speaking order. This direction has been reiterated by the Hon’ble Supreme Court on October 15, 2020, in MA No. 1577 of 2020 in Criminal Appeal Nos. 1375-1376 of 2013. This essentially means that once the six-month period is over, the trial courts may resume the proceedings without waiting for any other intimation, unless an express order extending the stay is passed. No contempt proceedings would lie against the presiding officers of trial courts on having proceeded in terms of Asian Resurfacing after a lapse of six months.
1- Asian Resurfacing Road Agency v. Central Bureau of Investigation, 2018(16) SCC 299.
It is pertinent to mention here that a trial proceeding must be pending before Civil or Criminal Court, under term Civil Court includes JSCC Court, Revenue Curt and in Criminal Court includes Judicial Magistrate Courts, Special Courts, Session Courts, Anti-corruption Courts, CBI Courts, etc. Civil or Criminal proceedings may be pending in the Court of the first instance, or maybe appeal or revision proceeding. It means that if any appeal or revision is pending before District or session Court and any stay order has been passed by appellate authority except Hon'ble Supreme Court, in respect of any appeal or revision during the pendency of trial then Asian resurfacing case would be applicable. It also inculcates that if any appeal or revision is finally decided then principles of the Asian Resurfacing case would not be applicable.
The original text of pronouncement of Asian Resurfacing Road Agency v. Central Bureau of Investigation, 2018(16) SCC 299.
"35. Because of the above, the situation of proceedings remaining pending for long on account of stay needs to be remedied. The remedy is required not only for corruption cases but for all civil and criminal cases where on account of stay, civil and criminal proceedings are held up. At times, proceedings are adjourned sine die on account of stay. Even after the stay is vacated, intimation is not received and proceedings are not taken up. In an attempt to remedy this, situation, we consider it appropriate to direct that in all pending cases where stay against proceedings of a civil or criminal trial is operating, the same will come to an end on expiry of six months from today unless in an exceptional case by a speaking order such stay is extended. In cases where the stay is granted in the future, the same will end on the expiry of six months from the date of such order unless a similar extension is granted by a speaking order. The speaking order must show that the case was of such exceptional nature that continuing the stay was more important than having the trial finalized. The trial Court where the order of stay of civil or criminal proceedings is produced may fix a date not beyond six months of the order of stay so that on expiry of the period of stay, proceedings can commence unless the order of extension of stay is produced."
(emphasis supplied) The dispute before the Supreme Court emanated from criminal proceedings in a case relating to the Prevention of Corruption Act, 1988. The Supreme Court held that the order framing charge is not purely an interlocutory order nor a final order, consequently, the jurisdiction of the High Court is not barred irrespective of the label of a petition, be it under Section 397 or 482 Cr.P.C. or Article 227 of the Constitution. However, the jurisdiction is to be exercised consistent with the legislative policy to ensure expeditious disposal of a trial without the same being in any manner hampered. The Supreme Court, thereafter observed that even where the challenge is entertained and it is considered desirable to stay the proceedings of the trial, the same should be for short period and endeavor should be made to decide the challenge expeditiously, normally within 2-3 months. Even where the matter remains pending for a long time, the duration of stay of the trial should not exceed six months unless an extension is granted by a specific order recording reasons therefor.
The Supreme Court also observed thus:-
"In all pending matters before the High Courts or other courts relating to PC Act or all other civil or criminal cases, where a stay of proceedings in a pending trial is operating, stay will automatically lapse after six months from today unless extended by a speaking order on above parameters. The same course may also be adopted by civil and criminal appellate/revisional courts under the jurisdiction of the High Courts. The trial courts may, on expiry of the above period, resume the proceedings without waiting for any other intimation unless express order extending stay is produced. "
Observation of Hon’ble Supreme Court in the order dated, October 15, 2020, in MA No. 1577 of 2020 in Criminal Appeal Nos. 1375-1376 of 2013 Asian Resurfacing Road Agency vs. Central Bureau of Investigation-
we are constrained to point out that in our directions contained in the judgment delivered in Criminal Appeal Nos. 1375-1376 of 2013 [Asian Resurfacing of Road Agency Pvt. Ltd. & Anr. vs. Central Bureau of Investigation] and, in particular, para 35, it is stated thus: “35. … …. In cases where the stay is granted in the future, the same will end on the expiry of six months from the date of such order unless a similar extension is granted by a speaking order. The speaking order must show that the case was of such exceptional nature that continuing the stay was more important than having the trial finalized. The trial Court where the order of stay of civil or criminal proceedings is produced may fix a date not beyond six months of the order of stay so that on expiry of the period of stay, proceedings can commence unless the order of extension of stay is produced.” Learned Additional Chief Judicial Magistrate, Pune, by his order dated 04.12.2019, has instead of following our judgment in the letter as well as spirit, stated that the Complainant should move an application before the High Court to resume the trial. The Magistrate goes on to say: “The lower court cannot pass any order which has been stayed by the Hon’ble High Court, Bombay with due to respect of ratio of the judgment in Asian Resurfacing of Road Agency Pvt. Ltd. & Anr. (supra).” We must remind the Magistrates all over the country that in our pyramidical structure under the Constitution of India, the Supreme Court is at the Apex, and the High Courts, though not subordinate administratively, are certainly subordinate judicially. This kind of order flies in the face of para 35 of our judgment. We expect that the Magistrates all over the country will follow our order in letter and spirit. Whatever stay has been granted by any court including the High Court automatically expires within a period of six months, and unless an extension is granted for good reason, as per our judgment, within the next six months, the trial Court is, on the expiry of the first period of six months, to set a date for the trial and go ahead with the same. With this observation, the order dated 04.12.2019 is set aside with a direction to the learned Additional Chief Judicial Magistrate, Pune to set down the case for hearing immediately. Miscellaneous Application is disposed of accordingly. ..........…
Whether Stay automatically vacated only at the trial stage of litigation
High Courts and Tribunals were approached with varying interpretations of the Asian Resurfacing judgment. Parties sought an all-encompassing interpretation of the judgment such that the stay of all kinds would stand automatically vacated. Because of this, the scope of the exception created by Asian Resurfacing was clarified by various High Courts. The Karnataka High Court [1], Allahabad High Court [2] and the Andhra Pradesh High Court [3] have respectively, held that the directions in Asian Resurfacing shall apply only when the trial proceedings have stayed. The courts specifically held that there will be no automatic vacation of stay on proceedings before a court post the trial stage when the judgment and decree have been passed. Even at the trial stage, the power of granting a stay is to be used only on rare occasions held by the Delhi High Court.[4]
1- Order dated January 10, 2019, in Writ Petition 100648-100649 of 2019 and Order dated March 15, 2019, in R.F.A. No.1344 of 2012.
2- Dharam Vir Sood vs. Savitri Devi and Ors., S.C.C. Revision No. 205 of 2016, order dated April 5, 2019, 2019 (134) ALR 442.
3- K. Ranga Prasad Varma vs. Kotikalapudi Sitarama Murthy and Ors., AIR 2020 AP 22.
4- Ganga Ram Hospital v. State, 2020 SCC OnLine Del 662.
Whether Stay by Supreme Court vacated automatically or not?
The applicability of the judgment to the orders of the Hon’ble Supreme Court was clarified While dealing with the question of eviction proceedings, the division bench held that the directions in Asian Resurfacing would not apply to the interim orders issued by the Hon’ble Supreme Court. It was clarified that if the interim order granted by the Hon’ble Supreme Court is not vacated and continues beyond a period of six months because of the pendency of the appeal, it cannot be said that the interim order would automatically stand vacated. See the below case law-
1- Fazalullah Khan vs. M. Akbar Contractor and Others, Order dated July 22, 2019, in I.A. No. 27524 of 2019 in Civil Appeal No. 6088 of 2011.
Whether the automatic stay is applicable on proceedings before quasi-judicial bodies
Since the Asian Resurfacing judgment specifically referred to only stay on a proceeding before the civil and criminal trial courts, another issue of interpretation is whether the exception would mutandis mutandis apply to cases before the quasi-judicial bodies and statutory tribunals. In this regard, the Central Board of Indirect Taxes and Customs issued a clarification in July 2019,[1] that the Asian Resurfacing judgment would not apply on stay of recovery proceedings before the Customs Excise and Service Tax Appellate Tribunal (“CESTAT”). The Board relied upon an opinion issued by the Ministry of Law and Justice, wherein the distinction between ‘Court’ and ‘Tribunal’ in terms of the CPC was highlighted, to conclude that CESTAT would not be constituted a ‘trial court’ and hence is outside the scope of the judgment in Asian Resurfacing. The Bombay High Court[2] and Gujarat High Court[3] have also held that the stay on income tax recovery proceedings, imposed due to an appeal to Commissioner or the High Court, would not be vacated automatically on expiry of six months.
Thus, it is safe to assume that a similar approach can be adopted for other quasi-judicial bodies and tribunals that are not ‘courts’ and do not conduct ‘trials’, such as the NCLT and NCLAT. Any stay on proceedings before such tribunals would continue until vacated or final order is issued. see the below case laws-
1- Circular no. F. No. 1080/2/DLA/Tech/Action Taken/2019/3514.
2- Oracle Financial Services Software Ltd., Mumbai v. Deputy Commissioner of Income Tax-13(1)(1) & Ors., Writ Petition No. 542 of 2019, decided on February 28, 2019.
3- Commr. of Central Goods and Services Tax vs. Anmol Chlorochem, Civil Application No. 1 of 2019, decided on June 20, 2019.
Whether directions delivered in the case of Asian Resurfacing of Road Agency vs CBI is applicable in Execution cases.
The response is negative because the guidelines would apply only to pending civil and criminal trials. It means that guidelines given in the above case law would not be applicable in Execution cases. The hon’ble supreme court, Hon’ble Karnataka High Court, Allahabad High Court, Andhra Pradesh High Court & Delhi High Court have clarified in their pronouncements these are being mentioned below-
1- Order dated January 10, 2019, in Writ Petition 100648-100649 of 2019 and Order dated March 15, 2019, in R.F.A. No.1344 of 2012.
2- Dharam Vir Sood vs. Savitri Devi and Ors., S.C.C. Revision No. 205 of 2016, order dated April 5, 2019, 2019 (134) ALR 442.
3- K. Ranga Prasad Varma vs. Kotikalapudi Sitarama Murthy and Ors., AIR 2020 AP 22.
4- Ganga Ram Hospital v. State, 2020 SCC OnLine Del 662.
Whether directions rendered in the case of Asian Resurfacing of Road Agency vs CBI would apply in respect of the stay order passed by the division bench in letters patent appeal
The applicant seeks clarification that the order passed by this Court in Asian Resurfacing of Road Agency Private Limited and another vs Central Bureau of Investigation (2018) 16 SCC 299 SC would apply to the facts of the applicant’s case. It must be noted that the applicant is a writ petitioner before the High Court. Learned Single Judge has disposed of the writ petition. The said judgment is challenged before the Division Bench in a Letter Patent Appeal. Accordingly, the miscellaneous application for clarification is disposed of by clarifying that the order of stay granted by the Division Bench in the High Court cannot be treated as having no force. However, we leave it open to the applicant to seek early disposal of the case. see the case law given below-
Asian Resurfacing Of Road Agency ... vs Central Bureau Of Investigation, Mic. application No. 706/2022, DOJ 25 April 2022.
Whether order in respect of no coercive action comes within the purview of Stay under Asian Resurfacing case
It depends on the situation of the case if any order in respect of no coercive action has been passed by the court and the case is under investigation then such order would not come within the purview of stay under Asian Resurfacing case because according to the Asian Resurfacing case proceeding must be pending before Civil or Criminal Courts.
Now the question before us is when it would be deemed that proceeding is pending before Civil or Criminal Courts? The answer is that, the date of the order when the court took cognizance or made an order for the registration of such case by the same.
It must be kept in mind that if an order has been passed in respect of no coercive action in a case that is under investigation and that order itself denotes that no coercive action shall be taken till submission of the charge sheet, in that case, while charge-sheet files order of the stay itself lost his effect. In case of any order passed till the next date of the listing and charge-sheet has been submitted then such kind of the stay order is automatically vacated after the expiry of the six months from the date of the taking cognizance or date of the making order for registration of particular case or proceeding.
Conclusion-
for the above discussion, it is quite clear that the principle laid down by the Supreme Court in the Asian Resurfacing case applies only to trial proceedings before Civil and Criminal Courts, Trial Courts do not include Tribunal and the doctrine propounded in the above pronouncement does not applicable upon Hon’ble Supreme Court. It must also inculcate that over Execution proceeding it would not apply. If there is no clear-cut order in respect of extension of the stay then the trial court must proceed with such case and contempt proceeding is not applicable against such Magistrate.
