The "resurfacing" conundrum of the Supreme Court's Asian Resurfacing verdict

The March 2018 decision of the Supreme Court in Asian Resurfacing of Road Agency Pvt Ltd v. Central Bureau of Investigation ‘resurfaced’ on October 15 this year, and has given rise to anxious legal and constitutional issues at the institutional level.

Both the original and the recent judgments are authored by Justice Rohinton Fali Nariman, who is an unparalleled constitutional wizard, and that makes it a tough and teasing puzzle to grapple with. Let us try.

In its epochal order, the apex court, concerned with the ‘perennial pendency’ of causes before the ‘hierarchical courts’ in the wake of interim orders of stay granted by the High Court, ordered as follows:

“ 35. ... .... 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 finalized. 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.”

It was a huge development in the judicial field. In one fell swoop, by an omnibus order from the pulpit, the Supreme Court possibly dissolved thousands, if not lakhs of interim stay orders passed by the high courts in India, in civil and criminal cases, where the interim stay orders continued beyond the ‘six months’ of its grant, ‘without an extension by a speaking order’.

The reverberations of this have been driven home and felt only when the the orders passed in March 2018 in “Asian Resurfacing”’ resurfaced before the top court.

It would make robustly common and good sense to quote the erudite judge himself:

“Learned Additional Chief Judicial Magistrate, Pune, by his order dated 04.12.2019, has instead of following our judgment in 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 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 orders fly 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 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."

Honestly, a trained lawyer would say that the Judicial Magistrate was not disregarding or disrespecting and/or surely not being in contempt of the orders of the apex court. The Magistrate was under the disciplinary thrall of the High Court. He faced a direct order staying the proceedings before him. Technically, the interim stay order of the High Court was still in force. Propriety impelled the obedient Magistrate to seek specific orders from the High Court, duly vacating the orders of interim stay before he could proceed. Could the Magistrate be accused of disobedience?

This act or conduct of the Judicial Magistrate was directly escalated to the Supreme Court, and the result is the order dated October 15. The Supreme Court made it clear that by virtue of para 35 of its March 2018 order, the interim stay orders of the concerned High Court, being beyond the the six months rule, stood dissolved ‘automatically’. What happened to the considered interim stay order of the High Court? It gets dissolved if the ‘six months rule’ applied to it.

To the academically inclined and constitutionally devoted, the consequences of the orders in Asian Resurfacing are worrisome.

Yes, under Article 141 of the Constitution of India, what the Supreme Court uttered in March 2018 is ‘law of the land’, binding on us all. Yes, the concern expressed by the Supreme Court on ‘perennial pendency’, and the need to expedite the process, is commendable. Most welcome for those of us in the know of things, particularly those facing the rough end of the stick and unable to get our applications to vacate the interim orders of stay, listed among the humongous competing claims.

Yet, the direct impact of the apex court order is to wipe the slate clean of the interim stay orders of the High Court ‘automatically’ (underlined as well by the top court), which do not come within the ambit of the excepted viz. unless extended by a speaking order.

In the constitutional scheme of our system, the high courts in the states occupy a huge status. The interim stay orders passed by them, in hundreds and thousands, have meaning and significance, to the beneficiary and the aggrieved.

And perennial pendency is a huge bane. The sheer numbers are mind boggling. It is a struggle to get cases listed. The corridors often say, “Once a stay, forever stay”. Yet, just by sheer efflux of time of the ‘six months rule’, without the High Court getting to know or having the benefit of considering an extension, to hold, by an omnibus order that the interim stay orders shall stand dissolved ‘automatically’, sounds incredible, to say the least. What of the constitutional status of the High Court? Does it not matter? To be bypassed, as it were, by one stroke of the pen!

The resurfacing of Asian Resurfacing by orders dated October 15 may have opened the floodgates. The subordinate courts could be faced with a tough choice. Accept the binding force of the apex court and dissolve the interim stay orders of the High Court ‘automatically’? Not easy at all, considering that it is the High Court that sits immediately up, above and over the subordinate courts.

Be that as it may, there is another conundrum let loose. There is an eternal battle going on, not settled yet by the Supreme Court, as to whether Article 226(3) is ‘directory’ or ‘mandatory’. The views of the high courts on this provision are hugely differing and divergent. The said provision talks of the automatic dissolution of interim stay not heard and decided within the stipulated timeline. Of course, Asian Resurfacing did not surface under Article 226 jurisprudence.

There is every reason to believe that the Executive, manned by irrationally exuberant bureaucrats, may/could be inclined to embrace the ‘six months rule’ in writ jurisdiction too.On genuine misunderstanding or ‘convenient misunderstanding’ as recently surfaced before Justice V Parthiban, the Madras High Court (that is a whole new and fascinating story which can wait), the powers that be could conclude that the interim stay orders not extended by a speaking order, stood dissolved ‘automatically’, on the foundation of the ‘six months rule’.

It could be utterly chaotic if it were to happen. The status, position and majesty of the high court in the constitutional pyramid is and would/could be at stake. As a sincere and obedient student of law, the author feels that Asian Resurfacing may need to be Reconsidered. Lest, the practising advocates and the litigants and the judiciary at large, may see the resurfacing of the dictum in ‘Resurfacing’, in multiple forms, possibly clogging the over-burdened judiciary, with more of the perennial pendency.

Surely, the least and last of the expectations with which Justice Rohinton F Nariman may have authored his hugely impactful judgment on March 28, 2018 and clarified beyond doubt on October 15, 2020. Legal practitioners may love the conundrums, as it has directly proportional commercial content. But what of the impacted stakeholders and the litigants at large?And the constitutional status of the high courts in the respected hierarchy? I would love to be proved wrong or horribly paranoid, which I believe, I am not.

The author is an advocate practicing at the Madras High Court.