Thursday 2 September 2021

Whether Judgment passed by high court will amount to precedent if it is stayed by Supreme Court?


In cases where an appeal remains pending before the Supreme Court and an order of stay remains operative in such a pending appeal, such stay of order does not amount to any “declaration of law” under Article 141 of the Constitution of India but is merely binding upon the parties to the said proceedings.

..Such an order of stay, which is interim in nature, does not obliterate the binding effect of the judgment of the concerned High Court as a precedent for the reason that while granting the interim order of stay of such order of the High Court, the Supreme Court had no opportunity to lay down any proposition of law which was in variance to the one declared by the High Court, which is impugned before the Supreme Court. 

Accordingly, if a Single Judge bench of the high Court is seized with the question of applicability of a Division Bench judgment which is subject to an order of stay in a pending appeal before the Supreme Court, the learned Single Judge shall apply the ratio as laid down by the Division Bench of the Court, as per the doctrine of precedent.

The coordinate bench shall made reference if not agree with earlier..

As per the law laid down in Shree Chamundi Mopeds Ltd the effect of an interim order staying the operation of an impugned order and the quashment of an impugned order are considerably different from one another. While the former merely ensures that the order impugned would not be operative from the date of the passing of the order of stay, without annihilating the said impugned order from existence, the latter ensures that such quashment results in the restoration of the position as it stood on the date the impugned order was passed, with the impugned order ceasing to exist in the eyes of the law.

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