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Karnataka High Court Clarifies That Supreme Court’s Direction On Expiry Of Stay Orders Is Valid Only For Trial Proceedings, Not Execution Proceedings
In Asian Resurfacing of Road Agency Pvt Ltd v CBI, the High Court Of Karnataka explained that the Supreme Court’s direction regarding automatic lapse of stay orders after 6 months is applicable only to trial proceedings. Earlier in 2018, the Supreme Court ordered that in all pending cases of a civil or criminal nature where stay orders are in operation, the same will come to an end on the expiry of six months from the date of judgment unless in an exceptional case by a speaking order such stay order is extended. In this landmark judgment, the Supreme Court clarified that only in exceptional cases, the continuing the stay should be given more importance than having the trial finalized. Supreme Court’s verdict is not applicable to stay on execution proceedings granted by an appellate court. The Karnataka High Court clarified it in view of a trial court’s decision to resume the procedures for the enforcement of a decree, despite the stay order granted by the Court of Appeal in December 2017. The action of the trial court took place considering the fact that after the directions of the Apex Court, the order of suspension of the appeal expires automatically. The High Court noted that the Trial Court’s approach was erroneous. The High Court held that it is necessary to take into account that when a superior Appellate Court has granted the suspension of the execution of the judgment and the impugned decree was challenged before it in an appeal, the trial court cannot insist on the fact that, in spite of this suspension of the operation of the judgment and decree, they would do the same.
In such cases, the trial Court or any other Court subordinate to the High Court cannot claim an additional order of the High Court to continue the suspension of such orders at the expiration of six months from the date on which the stay order was given. The HC added that if a particular judicial order of the trial Court or the Court subordinate to the High Court is suspended and the proceedings of the trial is not suspended, in such circumstances, the decision of the Hon’ble Supreme Court would not be applicable. After the Supreme Court’s directions, the High Court, by the issuance of a circular - Circular No. 7/2018, ordered the subordinate courts to comply with the directives of the SC.
In explaining the scope of the circular, the HC noted that it cannot be understood in the sense that, although the judgment and decree of a trial court impugned before Appellate Court is stayed by the Appellate Court, the suspension of the judgment and decree of the Trial Court is operative only for a period of six months and, after six months, the suspension would automatically expire, which would allow the Executing Court to continue with the executing/ enforcement procedures. Such an interpretation of the decision of the Hon’ble Supreme Court and the said Circular is erroneous and improper.
