2021 (11) TMI 1183 - HC - Indian Laws

Writ appeal allowed after stay vacated without permitting counter-affidavit violating natural justice principles

The Chhattisgarh HC allowed a writ appeal challenging an order that vacated a stay without permitting the appellant to file a counter-affidavit. The court ... Proviso to Section 2(1) of the Chhattisgarh High Court (Appeal to Division Bench) Act, 2006 - interlocutory order and element of finality - maintainability of writ appeal - right to file counter affidavit in a writ petition - appellate interference with discretionary interlocutory orders - grant of ad interim stayProviso to Section 2(1) of the Chhattisgarh High Court (Appeal to Division Bench) Act, 2006 - interlocutory order and element of finality - right to file counter affidavit in a writ petition - maintainability of writ appeal - Whether the impugned order dated 28-9-2021 is a pure interlocutory order barred from appeal by the proviso to Section 2(1) of the Act of 2006 or is appealable because it vitally affects rights and has an element of finality - HELD THAT: - The Court applied the Full Bench principle in Ajay Gupta that only wholly interlocutory orders which do not decide matters of moment and lack finality are barred by the proviso; orders that vitally affect rights, cannot be undone at the final hearing, or bear on final adjudication are appealable. On facts the Single Judge, while deciding an application to vacate stay, recorded prima facie findings on merits and granted respondents liberty to finalise the freight terminal project at the risk and cost of respondent No. 5. The writ petitioner was deprived of the opportunity to file a counter affidavit opposing the application to vacate stay - a valuable right in writ proceedings - and the impugned liberty to finalise the project was held likely to have a material and potentially irreversible effect on the final adjudication. For these reasons the impugned order could not be characterised as a pure interlocutory order barred by the proviso and the preliminary objection on maintainability was repelled. [Paras 6, 7, 8, 14, 15]The writ appeal is maintainable; the preliminary objection that the impugned order is a non appealable interlocutory order is rejected.Admission of writ appeal - prima facie case - arguable on merits - Whether the writ appeal should be admitted for hearing - HELD THAT: - Having considered the record and submissions, and in view of the Court's conclusion that the impugned order was not a pure interlocutory order, the appeal was found to be arguable on merits. The Court exercised its discretion under the Act of 2006 to admit the writ appeal for hearing and issued notices to the respondents. [Paras 17]The writ appeal is admitted for hearing.Grant of ad interim stay - interim relief to prevent irreparable prejudice - Whether part of the impugned order directing liberty to respondents to finalise the freight terminal project should be stayed pendente lite - HELD THAT: - Balancing the prejudice caused by the deprivation of the writ petitioner's right to file a counter affidavit and the prima facie findings recorded by the Single Judge that could bring the project to an irreversible stage, the Court restrained that portion of the impugned order which granted liberty to respondents No. 1 to 4 to proceed to finalise the project. The stay was limited in scope and duration, to remain in force until the next date of hearing, with directions to issue notice and permit filing of replies. [Paras 23]Part of the impugned order permitting respondents No. 1 to 4 to finalise the freight terminal project shall remain stayed until the next date of hearing.Final Conclusion: The preliminary objection that the impugned order was a non appealable interlocutory order is repelled; the writ appeal is admitted as arguable and, limitedly, the High Court has stayed that portion of the impugned order which granted liberty to respondents to finalise the freight terminal project pending further hearing. Issues Involved:1. Maintainability of the writ appeal.2. Admission of the writ appeal.3. Application for grant of ad-interim stay.Issue-wise Detailed Analysis:1. Maintainability of the Writ Appeal:The primary issue was whether the writ appeal was maintainable under Section 2(1) of the Chhattisgarh High Court (Appeal to Division Bench) Act, 2006. The respondents argued that the impugned order dated 28-9-2021 was a pure interlocutory order, thus barring the appeal. They cited the Full Bench decision in Ajay Gupta v. State of Chhattisgarh, which states that appeals are barred against interim orders that are purely interlocutory and do not decide matters of moment or have an element of finality attached to them.The appellant countered by stating that the interim order dated 26-7-2021 was passed with all parties present and that the application for vacating stay was taken up without granting them the opportunity to file a reply. This, they argued, deprived them of the right to respond, thereby making the order not purely interlocutory. They cited the Supreme Court decision in Shah Babulal Khimji v. Jayaben D. Kania to support their claim that the order affected their rights and had an element of finality.The court noted that the Full Bench in Ajay Gupta clarified that if an order vitally affects the rights of the parties and has a bearing on the final adjudication, it cannot be termed purely interlocutory. The court found that in this case, the appellant was deprived of the opportunity to file a counter-affidavit, which is a valuable right. Additionally, the order allowed the finalization of the project, affecting the appellant's rights. Therefore, the court held that the writ appeal was maintainable.2. Admission of the Writ Appeal:Upon determining the maintainability, the court considered the admission of the writ appeal. The appellant argued that they had a prima facie case and that the impugned order affected their rights significantly. The court, after reviewing the records and submissions, found the appeal to be arguable on merits. Consequently, the writ appeal was admitted for hearing, and notices were issued to the respondents.3. Application for Grant of Ad-Interim Stay:The appellant sought a stay on the impugned order, arguing that allowing the project to proceed would cause irreparable harm and render the appeal infructuous. The respondents opposed this, arguing that the order was discretionary and should not be interfered with unless shown to be arbitrary or perverse. They cited the Supreme Court's decision in Wander Ltd. v. Antox India (P) Ltd. and State of U.P. v. Ram Sukhi Devi to support their stance.The court, considering that the appellant was deprived of the opportunity to file a counter-affidavit and that the project finalization would cause irreparable harm, deemed it appropriate to stay the part of the impugned order allowing the project to proceed. The stay was granted until the next hearing date, and the respondents were given three weeks to file a reply to the application for stay.Conclusion:The court concluded that the writ appeal was maintainable as the impugned order was not purely interlocutory, admitted the writ appeal for hearing, and granted an interim stay on the project finalization. The case was listed for a subsequent hearing after three weeks, with respondents required to file their replies in the meantime.