6 month lapse of stay orders applicable to Trial Court Proceedings and not orders, judgments, Karnataka HC clarifies Asian Resurfacing case

A recent order of the Karnataka High Court has served to clarify the law laid down by the Supreme Court in Asian Resurfacing of Road Agency Pvt. Ltd. v CBI with respect to time-bound lapse of appellate court stay orders..In the Asian Resurfacing case, the Supreme Court had directed that a stay issued by an appellate court on trial court proceedings would stand lapsed after the expiry of six months, unless it is extended in exceptional cases by a speaking order of the appellate court. Directions to this effect were issued in the interest of expediency in paragraphs 35, 36 and 37 of the judgment..Accordingly, the Karnataka High Court issued Circular No. 7/2018 directing all subordinate courts to comply with the directions in paragraphs 35-37 of the Asian Resurfacing judgment..Relying on this circular, an Executing Court had ordered the execution of a 1999 Hoshiarpur Trial Court decree against a judgment debtor. This, despite a stay issued on the Trial Court order by a District Court in 2017..The judgment debtor challenged this execution order before the High Court, contending that the Supreme Court’s Asian Resurfacing judgment and the Karnataka High Court circular only meant to curtail prolonging of stay of proceedings in trial courts. It would not be applicable to orders, decrees and judgments passed by the trial court..Concurring with this view, the Karnataka High Court has clarified,.“…the judgment of the Hon’ble Supreme Court as well as Circular No.7/2018 apply only when the proceedings of trial are stayed. Further, if any particular order of the trial Court or the Court subordinate to the High Court is stayed and the proceeding of the trial is not stayed, in such circumstances the judgment of Hon’ble Supreme Court would not apply.“.The Court went on to emphasise that a trial court does not have the authority to insist on the performance of a judgment or decree that has subsequently been stayed by a superior court, regardless of how much time has passed..“It is necessary to observe that when once a superior Appellate Court has granted stay of the operation of the judgment and decree impugned before it in an appeal, the trial court cannot insist that despite such stay of the operation of the judgment and decree, it would execute the same. .In such Cases, the trial Court or any other Court subordinate to the High Court cannot insist that there has to be a further order made by the High Court continuing the stay of such orders on the expiry of six months from the date on which stay order was passed. “.The High Court, therefore, concluded,.“It is further clarified that if any Appellate Court in the State in any Regular Appeal or this Court in a Regular First Appeal or Regular Second appeal grants an interim stay of an impugned judgment and decree either of the trial Court or of the first Appellate Court, as the case may be, then so long as the said stay of the execution of the judgment and decree is in force, there can be no execution of the judgment and decree whose operation has been stayed based on General Circular No.7/2018.“.Read the order: