What happens when the court grants a prima facie interim order, and it takes the shape of a long-lasting wait? Suppose investing all your savings in a project, and then the Court puts a stay on that project for five years, with no certainty that, even after five years any final decision will come, or another wait in the mask of an interim order will be there. An interim order is a temporary order taken during the pendency of a case to protect the subject matter. It includes, inter alia, a stay order, a temporary injunction and status quo order. The Court grants such an order to preserve the status quo pending final decision.
The Court relies upon a three-part test, as reaffirmed in Wander Ltd. v. Antox India, to grant an interim order consisting firstly of a prima facie case, which means that the plaintiff is required to establish that the case deserves a full trial. Secondly, balance of convenience, meaning that not granting an interim order must not outweigh the damage caused to the plaintiff if such an order were granted. Lastly, irreparable injury, which means that the plaintiff has to establish that any compensation cannot be adequate to grant relief to the plaintiff. The plaintiff is required to establish the three elements cumulatively for the grant of an interim order.
When COVID broke out, India's second-largest retail company, Future Retail, owing to financial difficulties, was struggling to survive. Stores were closing, creditors demanded repayment, banks started recovery proceedings, and to stop insolvency, it came into an agreement with Reliance Retail to sell its retail business with a proposed transaction of ₹ 247000 cr. However, Future Retail had a pre-existing agreement with Amazon whose terms restrict selling its retail business to Reliance. This led to a dispute reaching emergency arbitration, leading to an interim order that Future Retail could not proceed with the agreement with Reliance Retail until the final arbitral award, which came after five years. The situation after five years was not the same. The agreement between Future Retail and Reliance no longer existed. Future Retail entered into insolvency. An order passed to protect the status quo in reality took down one of the largest retail companies in India. This is not an isolated case. Farmers are waiting to get their land back. Mothers are waiting to take custody of their child. It sometimes takes a lifetime to get resolved.
As per the data provided by the National Judicial Data Grid (NJDG), there are approximately 5.65 cr. pending cases comprising 95,316 cases before the Supreme Court, 64,73,333 cases before the High Courts, and 5,06,57,874 cases before the District Courts. One generally considers the insufficient number of judges or judicial vacancies to be the primary reasons behind pending cases. However, the contribution of cases under interim orders is nevertheless significant.
It is not the case that the court never tried to resolve this issue. In Asian Resurfacing of Road Agency Pvt. Ltd. v. CBI, the Supreme Court restricted the indefinitely continuing nature of an interim order to ordinarily six months unless the court finds it necessary to extend it. However, in the case of High Court Bar Association, Allahabad v. State of U.P, this reasoning was not considered valid as, in the view of the Court, the period of such order depends on the facts of each case. In this context, the Appellants, advocating in favour of non-vacation of the interim order, argued that application of judicial mind is the pre-requisite for granting interim orders and without the application, such orders are arbitrary. Similarly, the vacation of the interim orders cannot be made without the application of judicial mind. They further argued that the vacation of an interim order cannot be made out in the absence of an individual, as the same will vitiate the principle of natural justice.
The period of an interim order therefore depends on the necessity of each case. A particular matter may require two months; another may require six. The law cannot prescribe a one-size-fits-all timeline; equally, it cannot permit interim orders to continue endlessly without periodic assessment. The solution lies not at either extreme but somewhere in between. The following reforms can help in preserving judicial discretion while ensuring that interim orders do not continue indefinitely.
Firstly, the NJDG should maintain and publish data on cases that are pending due to interim orders. Although the NJDG provides detailed statistics on, inter alia, pending civil, criminal, and pre- trial cases. However, it does not provide data that remain pending owing to interim orders. The absence of such data makes it difficult to assess the true impact of prolonged interim relief on judicial pendency. Maintaining such data would help policymakers, researchers, and the judiciary to identify the extent of the problem and formulate evidence-based reforms.
Secondly, the plaintiff should be mandated to establish that the continuance of the interim order is required after every six months from the date on which the interim order was originally granted. The three-part test can be used to establish that the continuance of such order is necessary. It will help in analysing whether the purpose for which the order was passed is being served or not. This process will also ensure that the application of judicial mind, as the court will decide, on the basis of the three-part test, whether the order should be continued or not. Additionally, it will uphold the principle of natural justice, as it will give both parties a valid opportunity to be heard before the vacation or continuance of thes interim order.
Thirdly, priority listing should be given to cases in which an interim order has remained in force for more than a year. This would enable the court to assess whether the continued operation of the interim order remains justified, minimise the prolonged injustice suffered by the parties, thereby helping in analysing the extent of damage caused by the interim order.
Fourthly, the Court should impose costs on the parties to obtain the interim relief merely to delay the proceedings or abuse the judicial process. Such costs would act as a deterrent against frivolous litigation and discourage the misuse of interim orders.
As a further measure, courts may suggest guidelines for timely disposal of cases on a category or case- by-case basis. For instance, criminal cases should be dealt with different timelines, while constitutional, commercial, and Environmental matter should be dealt with different timelines, after analysing the nature, importance, and urgency of the subject matter. This will serve justice without compromising the expeditious disposal of cases. The Supreme Court also supported the idea in the case of Ramrameshwari Devi v. Nirmala Devi. As these are mere guidelines, they only act as a suggestive reform. However, they would put an obligation on judges that, if they are unable to dispose of the case within the prescribed time limit, they should at least provide a reason for the delay.
Interim orders are granted by the Court to preserve the subject-matter of the case. However, when such an order continues for an indefinite period, rather than serving its intended purpose, it may ultimately jeopardise it. While the Supreme Court has rightly recognised that a rigid time limit cannot be prescribed for every case, the indefinite continuation of an interim order cannot be justified. The above-mentioned reforms offer a balanced approach by avoiding both a rigid time limit and the unrestricted continuation of interim orders. An interim order should preserve the subject matter of the dispute until final adjudication and should never become a substitution of the final judgement.
Authors are fourth year B.A. LL.B students at Lloyd Law College. Views are personal.