A full bench of Justices Anoop V Mohta, A S Oka and Riyaz Chagla held that the amendment was prima facie "unconstitutional" and violated the right to life guaranteed by Article 21 of the Constitution.
Today's stay order restores the "position prior to August 10 notification (amending the rules)", the bench said.
Hearing of the matter earlier before a division bench headed by Justice Oka had led to a confrontation, with the state government alleging that he was "biased". The matter was eventually placed before a full bench, and the state tendered an apology to Justice Oka.
The Maharashtra government, however, decided against immediately notifying existing silence zones afresh, in effect doing away with noise restrictions near schools, hospitals, courts and religious shrines among other places.
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Activists challenged the amendment in the High Court through PILs, alleging that it violated constitutional rights, and was an "appeasement move" ahead of Ganapati and Dahi Handi celebrations when loudspeakers are used liberally.
The amendment also resulted in nullifying a 2016 judgement of the Bombay HC which had forbidden use of loudspeakers within 100 meters of hospitals, educational institutions, courts and religious places even outside the declared silence zones.
"If a state government chooses not to exercise its powers to re-declare silence zones, how can that be a ground to challenge the Centre's policy?" Singh argued.
The Maharashtra government refused to commit to imposing fresh noise norms, saying it was granting permission for use of loudspeakers during Ganapati festival using the previous 1,573 silence zones as "guiding principles."
When the court asked whether this meant it would impose restrictions similar to silence zones, the government pleader did not make any categorical statement.
"If we were to accept the Centre and the state's arguments, then as of today there are no silence zones in the city. One can begin using loudspeakers even within five or ten metres of a hospital or court," the bench said.
"This is in violation of Articles 21 and 14 of the Constitution...Especially in the light of the Supreme Court's order upholding that a citizen cannot be compelled to listen," it said.
The court said the state government had conceded that there were no law and order problems when silence zones existed prior to the amendment.
The court sought the Attorney General's reply on the Union government's position by October 6, when the date for final hearing of these petitions would be fixed.