Supreme Court Sets Aside Six-Month Timeline For Automatic Vacation Of Stay Orders

There cannot be an automatic vacation of stay orders passed by trial courts and high courts only due to a lapse of time, the Supreme Court said on Thursday.

A stay order refers to a temporary pause on a proceeding or a ruling of a court in order to secure the rights of the party until the matter is finally adjudicated upon.

A five-judge constitution bench, led by Chief Justice of India DY Chandrachud, held that constitutional courts should generally refrain from laying down time-bound schedules for disposal of cases, saying this power should only be exercised in exceptional circumstances.

The bench said the pattern of pendency in every court is different and, therefore, the issue of giving priority to certain cases shall be best left to the court concerned.

It is in the interest of justice that a reasoned stay order in any civil or criminal proceeding, if not specifically ordered to be time-bound, will remain in operation till a final decision is reached upon or an order is passed either vacating, modifying or extending the stay, according to the apex court.

The judgment is in line with the cardinal principle of law that no one should be condemned unheard, according to Ateev Mathur, partner at SNG & Partners.

An automatic vacation of stay after the expiry of six months caused a lot of inconvenience to the litigants and the entire judicial system. In a country like India where dockets of the courts are always overflowing, it is not always the litigants' fault for a prolonged litigation, Mathur said.

In 2018, the top court had held that in all matters, civil or criminal, orders of stay that have once been granted should not continue beyond a period of six months unless specifically extended. The stay shall stand vacated automatically as soon as the six-month timeline lapses.

However, last year, the court expressed reservations in regard to the correctness of this principle.

The court had observed that although an indefinite stay unquestionably prolongs the proceedings, 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, it said.

"An automatic vacation of stay without the application of a judicial mind as to whether the stay should or should not be extended further is liable to result in a serious miscarriage of justice," the court had held.

Since the 2018 decision of the court was delivered by a three-judge bench, the apex court deemed it appropriate to refer the matter to a five-judge bench.