The Hindu Business Line : Interim relief: A word of caution

Over the years, the Supreme Court itself has specified the principles which the High Courts and trial courts are expected to follow while considering petitions for interim relief. However, where the apex court believes that the principles have been given the go-by, it may intervene to ensure that no injustice is done to the parties concerned, as it did in a recent FERA violation case.

THE judicial process in India is such that it has become almost a miracle to expect the final verdict from a court of law in any matter within a reasonable time.

No doubt, much will depend on the facts and circumstances of each case, as also on the attitude of the litigants and their advocates.

But the fact remains that due to mounting arrears in all the courts across the country, the situation in every court is almost the same.

In such a grim situation, what can a poor litigant do? That is when the concept of `interim relief' can come to the rescue of such a litigant.

Knowing that it will take years for the case to reach its logical end, a litigant invariably attempts to obtain interim relief from the court.

Even the advocates who have to deal everyday with the courts attempt to obtain `interim relief' for their clients, so as to get some immediate redressal from the court.

As the expression `interim relief' itself indicates, it is a relief granted by the court either at the beginning of the proceedings or at any time in the course of legal proceedings before the case reaches its logical conclusion. Now, the questions that arise in this context are:

Can every litigant demand `interim relief'? Is the court bound to grant `interim relief' sought by an applicant/petitioner? What are the parameters that a court would take into account while considering a plea for grant of interim-relief? Over the years, the Supreme Court itself has specified the principles which the High Courts and trial courts are expected to follow while considering applications/petitions for interim relief.

However, where the apex court believes that the principles have been given the go-by, it may intervene to ensure that no injustice is done to the parties concerned. Recently, the Supreme Court considered an issue relating to grant of `interim relief' in the case of Special Director vs Mohd. Ghulam Ghouse ([2004] 50 SCL 93 (SC)) ("FERA Case"). The brief facts of this FERA case are that one Mohd. Ghulam Ghouse (the accused) was accused of violating the provisions — of FERA and FEMA. The Enforcement Directorate had issued a notice alleging the various infractions which had led to large-scale illegal transactions worth over Rs 270 crore.

In addition, the Directorate alleged that Ghouse had forged documents and manipulated the accounts. Consequently, the Enforcement Directorate was conducting inquiries and proceeding against Ghouse.

As often happens in such cases, the accused ran to a court of law and put up a battery of lawyers to represent their case.

In the FERA case also, it was no different. Ghouse approached the Bombay High Court for relief. He filed a writ petition questioning the legality of the Enforcement Directorate (the Directorate) show-cause notice holding him guilty of various provisions of FERA and FEMA.

The violation of writ petition prayed for interim relief and that pending hearing and final disposal of the writ petition, the court should pass an order of injunction restraining the Directorate from initiating any proceeding pursuant to the show-cause notice.

The High Court passed an order granting immediate stay on the proceedings initiated by the Directorate, which appealed before to the Supreme Court.

Before the apex court, the Directorate contended that the High Court should not have granted interim relief, terminating further action in the matter.. The Directorate also submitted that the interim order amounted to granting the final relief itself.

It was also argued that the petitioner wanted stay on the proceedings against him and the interim order itself granted that prayer, thereby virtually disposing of the writ petition without hearing.

The apex court observed that in a large number of cases it had deprecated the practice of High Courts entertaining writ petitions questioning the legality of show-cause notices, resulting in stalling of inquiries and retarding of the investigative process.

It also observed that, unless the High Court was satisfied that the show-cause notice was patently illegal and suffered from the lack of jurisdiction of the authority to even investigate into facts, writ petitions should not be entertained for the asking.

The Supreme Court felt that writs should not be entertained as a matter of routine, and the petitioner should invariably be directed to respond to the show-cause notice.

The apex court also advised that, when a Court passed an interim order it should ensure that the statutory functionaries specially and specifically constituted for the purpose were not denuded of powers.

It is the duty of the court to ensure that ultimate relief, which may or may not be finally granted in the writ petition, is not accorded to the petitioner at the threshold by way of interim protection.

The apex Court also noted that the High Court had not indicated any reason while giving interim protection.

It believed that while passing the interim order, it was not necessary for the High Court to have elaborately dealt with the merits, though it was desirable and proper for it to have indicated the reasons while granting such an extraordinary relief in the form of an interim protection.

After considering the facts and circumstances of the FERA case, the apex court directed that the proceedings emanating from the show-cause notice were to be continued.

It further directed that the final order passed pursuant to the proceedings by the Directorate should be communicated to the accused only after obtaining approval from the High Court.

In other words, the Supreme Court removed the shackles placed on the Enforcement Directorate as a result of the stay granted by the High Court.

It is imperative that High Courts and trial courts view with seriousness the observations of the apex court and be circumspect while entertaining applications/petitions for grant of interim relief.

(The author is a Mumbai-based practising company secretary. He can be reached at sdisrani@vsnl.com)