Interim Orders Will Not Automatically Expire After Six Months—A Boon For Litigants

In a significant judgment, the Supreme Court of India, on February 29, held that interim orders passed by Courts will not automatically expire after six months even if they were not specifically extended.

Bench comprising Chief Justice of India DY Chandrachud, Justice Abhay S Oka, Justice JB Pardiwala, Justice Pankaj Mithal and Justice Manoj Misra overturned the Supreme Court's judgment in Asian Resurfacing of Road Agency Pvt. Ltd. VS. Central Bureau of Investigation (2018).

The Court said that when a High Court passed an interim order of stay, though the interim order might not expressly say so, the three factors, viz; prima facie case, irreparable loss, and balance of convenience, are always in the back of the judges' minds.

"Though interim orders of stay of proceedings cannot be routinely passed as a matter of course, it cannot be said that such orders can be passed only in exceptional cases. Nevertheless, the High Courts, while passing orders of stay in serious cases like the offences under the PC Act or serious offences against women and children, must be more cautious and circumspect," the Court added.

Welcoming the judgment, Nikhil Varshney, Director, Cyril Amarchand Mangaldas said that, "Litigants would no longer be required to approach the High Court towards expiry of six months’ time period to get a stay order passed earlier, extended. There have been instances wherein the Trial Courts have chosen to proceed with trial when the last order passed by the High Court extending stay has not been a reasoned one (post expiry of six months). In such cases, the litigants had to first file an application seeking early hearing of the matter, to get the last order extending stay clarified. This judgment would not only put an end to such last-minute requirements, but would also save costs for litigants and valuable time of the Courts, which otherwise are quite burdened."

Varshney commented that the Apex Court has drawn a balance by asking the High Courts to normally grant ad-interim relief for a limited duration and the Court may or may not confirm the earlier ad-interim order after hearing the contesting parties.

The Court went on to hold that by a blanket direction in the exercise of power under Article 142 of the Constitution of India, the Apex Court could not interfere with the jurisdiction conferred on the High Court of granting interim relief by limiting its jurisdiction to pass interim orders valid only for six months at a time.

Explaining Article 142 of the Constitution, Nikhil Varshney said that, "Article 142 of the Constitution confers jurisdiction on the Supreme Court to pass such a decree or make such order necessary for doing complete justice in any matter pending before it. The plenary jurisdiction is the residual source of power which the Apex Court may draw upon as necessary, whenever it is just and equitable to do so, in order to ensure observance of due process of law and complete justice being rendered to the parties."

The Court opined that without application of mind, an order of interim stay could not be vacated only on the ground of lapse of time when the litigant is not responsible for the delay.

It was reasoned by the Court that, "An interim order lawfully passed by a Court after hearing all contesting parties is not rendered illegal only due to the long passage of time."

The instant case was an appeal against the judgment handed down by the Allahabad High Court wherein the Court had differed with Asian Resurfacing and had framed ten questions of law for the Apex Court to consider.

The Apex Court further held that higher constitutional courts must abstain themselves from setting out timelines for disposal of specific or particular cases and leave it to the judge or magistrate hearing the case to schedule them as per their docket magnitude.

Justice Abhay S Oka and Justice Manoj Misra pronounced their separate but concurring opinions.

High Court Bar Association, Allahabad vs. State of UP & Ors. [2024]