TaxTMI 
TaxTMI 
2024 (3) TMI 63
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.... Mr. Anil Kumar, Adv. Mr. Gunjesh Ranjan, Adv. Mr. Animesh Tripathi, Adv. Mr. Anant Prakash,, Adv. Mrs. Kanupriya Mishra, Adv. Mr. Amit Kumar Singh, Adv. Mr. Salil Srivastava, Adv. Mr. Shaurya Vardhan Singh, Adv. Mr. Ankit Dwivedi, Adv. Mrs. Mukti Chowdhary, Adv. Mr. Gyanendra Kumar, Adv. Mrs. Vijaya Singh, Adv. Mr. Shashwat Anand, Adv. Mr. Apoorv Mishra, Adv. Mr. Shashank Shukla, Adv. Mr. Ashutosh Thakur, Adv. Mr. Vaibhav Jain, Adv. Mr. Rituvendra Singh, Adv. Mr. Aniruddh Kumar, Adv. Mr. Rajrshi Gupta, Adv. Mr. Imran Ullah, Adv. Mr. Tarun Agarwal, Adv. Mr. Ankit Saran, Adv. Mr. Namit Srivastava, Adv. Mr. Rakesh Dubey, Adv. Mr. Swetashwa Agarwal, Adv. Mr. Javed H Khan, Adv. Mr. Praval Tripathi, Adv. Mr. Shariq Ahmed, Adv. Mr. Satwik Misra, Adv. Mr. Ishit Saharia,, Adv. Mr. Ashish Singh, Adv. Mr. Amit Singh, Adv. Mr. Sanjay Kumar Singh, Adv. Mr. Piyush Kumar,, Adv. Mr. Paritosh Kumar Singh,, Adv. Ms. Babita Kushwaha, Adv. Mr. Pai Amit, AOR Mr. N. Ashwani Kumar, Adv. Ms. Pankhuri Bhardwaj, Adv. Mr. Abhiyudaya Vats, Adv. Mr. Tathagata Dutta, Adv. Ms. Vanshika Dubey, Adv. Mr. Kushal Dube, Adv. Mr. Nikhil Pahwa, Adv. Mr. P. Ashok, Adv. For the Respondent : Mr. Tushar Mehta, SG Mr. Aj....
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.... By the order dated 1st December 2023, a Bench of three Hon'ble Judges of this Court expressed a view that a decision of this Court in the case of Asian Resurfacing of Road Agency Private Limited & Anr. v. Central Bureau of Investigation (2018) 16 SCC 299 requires reconsideration by a larger Bench. I. Directions in Asian Resurfacing 1. In Asian Resurfacing1, this Court dealt with the scope of interference by the High Court with an order of framing charge passed by the Special Judge under the provisions of the Prevention of Corruption Act, 1988 (for short, 'the PC Act'). The issue was whether an order of framing charge was an interlocutory order. The High Court held that an order of framing charge under the PC Act was interlocutory. A Bench of two Hon'ble Judges of this Court, by the order dated 9th September 2013, referred the case to a larger Bench to consider the issue of whether the case of Mohan Lal Magan Lal Thacker v. State of Gujarat AIR 1968 SC 733 was correctly decided. A Bench of three Hon'ble Judges held that the order of framing charge was neither an interlocutory nor a final order. Therefore, it was held that the High Court has jurisdiction in appropriate cases....
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....st 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 stay is granted in future, the same will end on expiry of six months from the date of such order unless 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 finalised. The trial court where 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 period of stay, proceedings can commence unless order of extension of stay is produced. 37. Thus, we declare the law to be that order framing charge is not purely an interlocutory order nor a final order. Jurisdiction of the High Court is not barred irrespective of the label of a petition, be it under Sections 397 or 482 CrPC or Article 227 of the Constitution. However, the said jurisdiction is to be exercised consistent with the legislative policy to ensure expeditious disposal of a trial without the same bei....
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.... order dated 25th April 2022, did not apply the direction issued in Asian Resurfacing1 to the facts of the case before it. An attempt was made to apply the directions to an order of stay of the order of the learned Single Judge of the High Court passed by a Division Bench in a Letters Patent Appeal. II. Order of reference to Larger Bench 4. In the order of reference dated 1st December 2023, in paragraph 10, this Court observed thus: "10. We have reservations in regard to the correctness of the broad formulations of principle in the above terms. There can be no gainsaying the fact that a stay of an indefinite nature results in prolonging civil or criminal proceedings, as the case may be, unduly. At the same time, it needs to be factored in that the delay is not always on account of conduct of the parties involved. The delay may also be occasioned by the inability of the Court to take up proceedings expeditiously. The principle which has been laid down in the above decision to the effect that the stay shall automatically stand vacated (which would mean an automatic vacation of stay without application of judicial mind to whether the stay should or should not be extende....
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....Constitution, an interim order cannot be automatically vacated unless a specific application is made for vacating the interim order; i. A provision of automatic vacation of the Appellate Tribunal's stay order was incorporated in Section 254 (2A) of the Income Tax Act, 1961 (for short, 'the IT Act'). It provided that if an appeal preferred before the Appellate Tribunal was not disposed of within 365 days, the stay shall stand vacated even if the delay in disposing of the appeal is not attributable to the assessee. This court struck down the provision in the case of Deputy Commissioner of Income Tax & Anr. v. Pepsi Foods Limited (2021) 7 SCC 413 on the ground that it was manifestly arbitrary; and j. The automatic vacation of interim relief is unjust, unfair and unreasonable. 7. Shri Tushar Mehta, the learned Solicitor General appearing for the State of Uttar Pradesh, supported the submissions of Shri Dwivedi. In addition, he submitted that: a. As held by the Constitution Bench in the case of Raza Buland Sugar Co. Ltd. v. Municipal Board, Rampur AIR 1965 SC 895, laws of procedure are grounded in principles of natural justice, which require that no dec....
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.... any case or matter pending before it. The issue of the duration of the order of stay did not arise in the case of Asian Resurfacing1; and d. A successful litigant whose application for stay is allowed by the High Court cannot be prejudiced only on the ground that the High Court does not hear the main case within six months for reasons beyond the control of the said litigant. 10. Shri Amit Pai, the learned counsel appearing for the appellant in one of the appeals, while adopting the submissions, relied upon a decision of this Court in the case of Deoraj v. State of Maharashtra & Ors. (2004) 4 SCC 697 and contended that recourse is taken to the order of grant of interim relief as the conclusion of hearing on merits is likely to take some time. He submitted that the said object has not been considered in Asian Resurfacing1. He urged that passing an interim order of stay is a judicial act. Therefore, such an order must be vacated only by a judicial act. 11. Prof (Dr) Pankaj K Phadnis, representing the intervenor - Abhinav Bharat Congress, has filed written submissions. He has contended that he was not permitted to join the hearing through video conferencing. He has come....
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....ediately. While entertaining a challenge to an order passed in a pending case, if the pending case is not stayed, the trial or the appellate Court may decide the pending case, rendering the remedy before the High Court ineffective. Such a situation often leads to the passing of an order of remand. In our legal system, which is facing a docket explosion, an order of remand should be made only as a last resort. The orders of remand not only result in more delays but also increase the cost of litigation. Therefore, to avoid the possibility of passing an order of remand, the grant of stay of proceedings is called for in many cases. II. High Court's power to vacate or modify interim relief 14. When a High Court grants a stay of the proceedings while issuing notice without giving an opportunity of being heard to the contesting parties, it is not an interim order, but it is an ad-interim order of stay. It can be converted into an interim order of stay only after an opportunity of being heard is granted on the prayer for interim relief to all the parties to the proceedings. Ad-interim orders, by their very nature, should be of a limited duration. Therefore, such orders do not pose an....
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....e directions issued in Asian Resurfacing1 regarding automatic vacation of interim orders of stay passed by all High Courts are applicable, irrespective of the merits of individual cases. If a High Court concludes after hearing all the concerned parties that a case was made out for the grant of stay of proceedings of a civil or criminal case, the order of stay cannot stand automatically set aside on expiry of the period of six months only on the ground that the High Court could not hear the main case. If such an approach is adopted, it will be completely contrary to the concept of fairness. If an interim order is automatically vacated without any fault on the part of the litigant only because the High Court cannot hear the main case, the maxim "actus curiae neminem gravabit" will apply. No litigant should be allowed to suffer due to the fault of the Court. If that happens, it is the bounden duty of the Court to rectify its mistake. 17. In the subsequent clarification in the case of Asian Resurfacing1, a direction has been issued to the Trial Courts to immediately fix a date for hearing after the expiry of the period of six months without waiting for any formal order of vacating s....
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....e Finance Act, 2007 to mitigate the rigour of the first proviso to Section 254(2-A) of the Income Tax Act in its previous avatar. Ordinarily, the Appellate Tribunal, where possible, is to hear and decide appeals within a period of four years from the end of the financial year in which such appeal is filed. It is only when a stay of the impugned order before the Appellate Tribunal is granted, that the appeal is required to be disposed of within 365 days. So far as the disposal of an appeal by the Appellate Tribunal is concerned, this is a directory provision. However, so far as vacation of stay on expiry of the said period is concerned, this condition becomes mandatory so far as the assessee is concerned." 21. .. .. .. .. .. .. .. .. .. .. 22. Since the object of the third proviso to Section 254(2-A) of the Income Tax Act is the automatic vacation of a stay that has been granted on the completion of 365 days, whether or not the assessee is responsible for the delay caused in hearing the appeal, such object being itself discriminatory, in the sense pointed out above, is liable to be struck down as violating Article 14 of the Constitution of India. Also, the said pro....
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....ner, U.P. and Ors. 1962 SCC Online SC 37, in paragraphs 12 and 13 held thus: "12. Basing himself on this decision, the Solicitor-General argues that the power conferred on this Court under Article 142(1) is comparable to the privileges claimed by the members of the State Legislatures under the latter part of Article 194(3), and so, there can be no question of striking down an order passed by this Court under Article 142(1) on the ground that it is inconsistent with Article 32. It would be noticed that this argument proceeds on the basis that the order for security infringes the fundamental right guaranteed by Article 32 and it suggests that under Article 142(1) this Court has jurisdiction to pass such an order. In our opinion, the argument thus presented is misconceived. In this connection, it is necessary to appreciate the actual decision in the case of Sharma [(1959) 1 SCR 806 at 859-860] and its effect. The actual decision was that the rights claimable under the latter part of Article 194(3) were not subject to Article 19(1)(a), because the said rights had been expressly provided for by a constitutional provision viz. Article 194(3), and it would be impossible to hold t....
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.... procedure is necessary to do complete justice between the parties." (Emphasis added) 21. Another Constitution Bench in the case of Supreme Court Bar Association v. Union of India & Anr. (1998) 4 SCC 409, in paragraphs 47 and 48, held thus: "47. The plenary powers of this Court under Article 142 of the Constitution are inherent in the Court and are complementary to those powers which are specifically conferred on the Court by various statutes though are not limited by those statutes. These powers also exist independent of the statutes with a view to do complete justice between the parties. These powers are of very wide amplitude and are in the nature of supplementary powers. This power exists as a separate and independent basis of jurisdiction apart from the statutes. It stands upon the foundation and the basis for its exercise may be put on a different and perhaps even wider footing, to prevent injustice in the process of litigation and to do complete justice between the parties. This plenary jurisdiction is, thus, the residual source of power which this Court may draw upon as necessary whenever it is just and equitable to do so and in particular to ensure the....
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....yond merely disputesettling. It is a "problem-solver in the nebulous areas" (see K. Veeraswami v. Union of India [(1991) 3 SCC 655 : 1991 SCC (Cri) 734] but the substantive statutory provisions dealing with the subject-matter of a given case cannot be altogether ignored by this Court, while making an order under Article 142. Indeed, these constitutional powers cannot, in any way, be controlled by any statutory provisions but at the same time these powers are not meant to be exercised when their exercise may come directly in conflict with what has been expressly provided for in a statute dealing expressly with the subject." (Emphasis added) 22. It is very difficult to exhaustively lay down the parameters for the exercise of powers under Article 142 of the Constitution of India due to the very nature of such powers. However, a few important parameters which are relevant to the issues involved in the reference are as follows:- (i) The jurisdiction can be exercised to do complete justice between the parties before the Court. It cannot be exercised to nullify the benefits derived by a large number of litigants based on judicial orders validly passed in their favour ....
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....been conferred with any power of superintendence. If the Supreme Court and the High Courts both were to be thought of as brothers in the administration of justice, the High Court has larger jurisdiction but the Supreme Court still remains the elder brother. There are a few provisions which give an edge, and assign a superior place in the hierarchy, to the Supreme Court over High Courts. So far as the appellate jurisdiction is concerned, in all civil and criminal matters, the Supreme Court is the highest and the ultimate court of appeal. It is the final interpreter of the law. Under Article 139-A, the Supreme Court may transfer any case pending before one High Court to another High Court or may withdraw the case to itself. Under Article 141 the law declared by the Supreme Court shall be binding on all courts, including High Courts, within the territory of India. Under Article 144 all authorities, civil and judicial, in the territory of India - and that would include High Courts as well - shall act in aid of the Supreme Court." (Emphasis added) A High Court is constitutionally independent of the Supreme Court of India and is not subordinate to this Court. This Court has d....
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....olved. We (Judges) are not authorised to make disembodied pronouncements on serious and cloudy issues of constitutional policy without battle lines being properly drawn. Judicial pronouncements cannot be immaculate legal conceptions. It is but right that no important point of law should be decided without a proper lis between parties properly ranged on either side and a crossing of the swords. We think it is inexpedient for the Supreme Court to delve into problems which do not arise and express opinion thereon." (Emphasis added) In Asian Resurfacing1, there was no lis before this Court arising out of the orders of stay granted in different categories of cases pending before the various High Courts. This Court was dealing with a case under the PC Act. Thus, an attempt was made to delve into an issue which did not arise for consideration. VII. Clause (3) Of Article 226 of the Constitution 26. In this case, it is unnecessary for this Court to decide whether clause (3) of Article 226 of the Constitution of India is mandatory or directory. Clause (3) of Article 226 reads thus: "226. Power of High Courts to issue certain writs: (1) .. .. .. .. .. .. ......
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....ically, virtually making the pending case infructuous. In fact, in paragraph 37, this Court directed that the challenge to the order of framing charge should be entertained in a rare case, and when the stay is granted, the case should be decided by the High Court on a day-to-day basis so that the stay does not operate for an unduly long period. 28. The Constitution Benches of this Court have considered the issue of fixing timelines for the disposal of cases in the cases of Abdul Rehman Antulay3 and P. Ramachandra Rao4. In the case of Abdul Rehman Antulay3, in paragraph 83, this Court held thus: "83. But then speedy trial or other expressions conveying the said concept - are necessarily relative in nature. One may ask - speedy means, how speedy? How long a delay is too long? We do not think it is possible to lay down any time schedules for conclusion of criminal proceedings. The nature of offence, the number of accused, the number of witnesses, the workload in the particular court, means of communication and several other circumstances have to be kept in mind. For example, take the very case in which Ranjan Dwivedi (petitioner in Writ Petition No. 268 of 1987) is the acc....
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.... offence - and the delay is too long, not caused by the accused, different considerations may arise. Each case must be left to be decided on its own facts having regard to the principles enunciated hereinafter. For all the above reasons, we are of the opinion that it is neither advisable nor feasible to draw or prescribe an outer time-limit for conclusion of all criminal proceedings. It is not necessary to do so for effectuating the right to speedy trial. We are also not satisfied that without such an outer limit, the right becomes illusory." (Emphasis added) In paragraph 27 of the decision in the case of P. Ramachandra Rao4, this Court observed thus: "27. Prescribing periods of limitation at the end of which the trial court would be obliged to terminate the proceedings and necessarily acquit or discharge the accused, and further, making such directions applicable to all the cases in the present and for the future amounts to legislation, which, in our opinion, cannot be done by judicial directives and within the arena of the judicial law-making power available to constitutional courts, howsoever liberally we may interpret Articles 32, 21, 141 and 142 of the Con....
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....tion over larger States, the daily cause lists of individual Benches of the cases of the aforesaid categories are of more than a hundred matters. Therefore, once a case is entertained by the High Court and the stay is granted, the case has a long life. 30. There is a huge filing of regular appeals, both civil and criminal in High Courts. After all, the High Courts deal with many other important matters, such as criminal appeals against acquittal and conviction, bail petitions, writ petitions, and other proceedings that involve the issues of liberty under Article 21 of the Constitution of India. The High Courts deal with matrimonial disputes, old appeals against decrees of civil courts, and appeals against appellate decrees. There are cases where senior citizens or second or third-generation litigants are parties. The High Courts cannot be expected to decide, on a priority basis or a day-to-day basis, only those cases in which a stay of proceedings has been granted while ignoring several other categories of cases that may require more priority to be given. 31. The situation in Trial and district Courts is even worse. In 2002, in the case of All India Judges' Association & Ors.....
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....require priority to be given. Bail petitions remain pending for a long time. There are appeals against conviction pending where the appellants have been denied bail. 32. Therefore, constitutional Courts should not normally fix a time-bound schedule for disposal of cases pending in any Court. The pattern of pendency of various categories of cases pending in every Court, including High Courts, is different. The situation at the grassroots level is better known to the judges of the concerned Courts. Therefore, the issue of giving out-ofturn priority to certain cases should be best left to the concerned Courts. The orders fixing the outer limit for the disposal of cases should be passed only in exceptional circumstances to meet extraordinary situations. 33. There is another important reason for adopting the said approach. Not every litigant can easily afford to file proceedings in the constitutional Courts. Those litigants who can afford to approach the constitutional Courts cannot be allowed to take undue advantage by getting an order directing out-of-turn disposal of their cases while all other litigants patiently wait in the queue for their turn to come. The Courts, superior i....
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....irecting that the same should be heard along with the main case. The same principles will apply where ad-interim relief is granted. If an ad-interim order continues for a long time, the affected party can always apply for vacating ad-interim relief. The High Court is expected to take up even such applications on a priority basis. If an application for vacating ex-parte ad interim relief is filed on the ground of suppression of facts, the same must be taken up at the earliest. D. CONCLUSIONS 36. Hence, with greatest respect to the Bench which decided the case, we are unable to concur with the directions issued in paragraphs 36 and 37 of the decision in the case of Asian Resurfacing1. We hold that there cannot be automatic vacation of stay granted by the High Court. We do not approve the direction issued to decide all the cases in which an interim stay has been granted on a day-to-day basis within a time frame. We hold that such blanket directions cannot be issued in the exercise of the jurisdiction under Article 142 of the Constitution of India. We answer both the questions framed in paragraph 5 above in the negative. 37. Subject to what we have held earlier, we summarise o....
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....e orders of automatic vacation of stay shall remain valid. Criminal Appeal No.3589 of 2023 etc. Page 47 of 47 39. The reference is answered accordingly. We direct the Registry to place the pending petitions before the appropriate Benches for expeditious disposal. CJI. [Dr Dhananjaya Y. Chandrachud] Justice [Abhay S. Oka] Justice [J. B. Pardiwala] Justice [Manoj Misra] CRIMINAL APPEAL NO. 3589 OF 2023 WITH S.L.P. (Crl.) Nos. 13284-13289 of 2023 and Criminal Appeal Diary No. 49052 of 2023 Justice (Pankaj Mithal) JUDGMENT PANKAJ MITHAL, J. 1. Concurring with the opinion expressed by my brother Justice Oka for himself and other puisne Judges, including the Hon'ble Chief Justice, I would like to add that in Asian Resurfacing of Road Agency Private Limited & Anr. vs. Central Bureau of Investigation (2018) 16 SCC 299, this Court while deciding the issues arising therein went ahead in observing and directing that where a challenge to an order framing charge is entertained and stay is granted, the matter must be decided on day to day basis so that the stay may not continue for an unduly long time. It was further observed that though no mandatory time limit may ....
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....heless the principles behind the said provision can always be extended to other proceedings as has been done in Asian Resurfacing. It is worth noting that wherever under a statute any such time limit has been prescribed or is fixed for deciding a particular nature of proceeding, it has been held to be directory in nature rather than mandatory. So appears to be the position with regard to the applicability of Article 226(3) of the Constitution of India. 4. It is well recognised that no one can be made to suffer on account of any mistake or fault of the Court which means that even delay on part of the Court in deciding the proceedings or any application therein would not be detrimental to any of the parties to the litigation much less to the party in whose favour an interim stay order is passed. 5. It is settled in law that grant of interim stay order ought to be ordinarily by a speaking order and therefore as a necessary corollary, a stay order once granted cannot be vacated otherwise than by a speaking order, more so, when its extension also requires reasons to be recorded. 6. It is noticeable that under Article 226(3) of the Constitution of India, the automatic vacation o....