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MADHYA PRADESH HIGH COURT IMPOSES MORATORIUM DUE TO COVID-19

{IN RE SUO MOTO VS. UNION OF INDIA AND ORS. [WP 8820 OF 2021] DECIDED BY THE HIGH COURT OF MADHYA PRADESH ON 23.4.2021}

BY ABHINAV SHRIVASTAVA & SHRUTIKA GARG

The 2^nd wave of Covid-19 and sudden surge of cases in India has rattled the entire Country. Various States have been severally hit by the problem, and High Courts of various States stepped up to pass necessary directions to ease the burden of its citizens inter alia with regard to day to day difficulties arising in Court functioning.

Madhya Pradesh High Court also took suo moto cognizance of the current scenario by invoking its extra ordinary jurisdiction and power of superintendence under Article 226 and Article 227 of Constitution of India, with inherent power and power of superintendence over criminal matters under Section 482 and 483 of CrPC and inherent powers over civil matters under Section 151 of CPC in the matter of In Re (Suo Moto) vs. Union of India and Ors. [Writ Petition no. 8820/2021][1], and on 23.4.2021 has passed detailed directions with regard to functioning of judicial machinery and other public sectors.

The High Court has directed that interim orders passed by High Court or subordinate courts which are not of limited duration and meant to operate till further orders will continue, till the time a specific order is passed by the said Court. Apart from this, the High Court has extended the time or imposed various restrictions till  15^th June 2021, which includes continuation of interim orders, extension of time for filing written statements, Unexecuted orders to remain in abeyance, Extension of interim protection in Anticipatory Bail, Extension of interim bail granted under Section 439 CrPC which has expired or set to expire after 10^th March 2021, Extension of Parole granted after 9^th March 2021, Restriction on arrest of accused for cognizable offence punishable upto 7 years, Restriction on action for eviction and demolition of any property by State Government Municipal Corporation, Council, Board, other local bodies which are being symbolically or physically possessed by individual or party or body corporate, and Restriction on action to be taken by State Government or Central Government or its department pursuant to orders passed by High Court or other subordinate court etc.

But one such restriction which may cause some problems is the Restriction on Banks or other financial institution to take action for auction in respect of any property of any citizen or body corporate.

There can be no doubt that the directions issued by the Court were warranted due to the present day crisis. However, the Restriction on Banks or other financial institution to take action for auction in respect of any property of any citizen or body corporate would affect the functioning of banks and financial institutions and this will have an impact on public money. The High Court passed the said directions without hearing the Banks or Financial Institutions or keeping their interest in mind. The banking sector is facing severe difficulties and preventing them from taking steps to recover their monies will hamper their business.

Further, the restriction is capable of being misused by such individuals who are unwilling to honor their contracts with the Banks or Financial Institutions. After lifting of moratorium by the Supreme Court vide its Judgment dated 23.3.2021 in WP (C) No. 476 of 2020.

Incidentally, taking a leaf out of the book of Madhya Pradesh High Court, the Punjab & Haryana High Court passed similar restrictions vide their Judgment dated 28.4.2021 in CWP-PIL77 of 2021[2].

In our view, the High Courts ought to have struck a balance between the rights of citizens as well as the rights and liabilities of banking sector and to ensure that the direction does not impact the banks or financial institutions as well.

Abhinav Shrivastava is Co-Founding Partner of GSL Chambers and an Advocate on Record of Supreme Court of India; Shrutika Garg is an Associate with GSL Chambers.