Case BriefsCOVID 19Supreme Court

Supreme Court: After taking suo motu cognizance of problems and miseries of migrant labourers who had been stranded in different parts of the country on Tuesday and receiving a response from Government, the 3-judge bench of Ashok Bhushan, SK Kaul and MR Shah, JJ has issued interim directions and has held that no fare either by train or by bus shall be charged from any migrant workers.

“The railway fare shall be shared by the States as per their arrangement as submitted by the learned Solicitor General and in no case any fare should be asked or charged from any migrant workers by the States and the Railways.”

The Court had, on 26.05.2020, taken up the issue suo motu based on, newspaper and media reports and several letters and representations it received from different sections of society highlighting the problem of migrant labourers. The Court had directed the Solicitor General Tushar Mehta to assist the Court and by the next date of hearing bring in the notice of the Court all measures and steps taken by the Government of India and to be taken in this regard.

Submissions by Solicitor General Tushar Mehta

  • from 01.05.2020, the migrant workers have been sent to their destination i.e. home town by Shramik trains and also by road. 50 lacs migrant workers have been shifted by Shramik trains and about 41 lac migrant workers have been transported by road transport.
  • food and water are provided by the originating concerned State from where the migrant workers start their journey and when the journey is undertaken by railways, the railways provides the meal.
  • the receiving State takes care of the migrant workers and drop them to their home by buses. It also takes steps for quarantining those workers and necessary screening is also conducted.
  • the fare is borne either by the originating State or the receiving State as per their internal arrangement.
  • all the States have set up different relief camps where migrant workers are provided water, food, stay etc. and with regard to migrant workers who are staying in different places in the country, they are provided under the scheme of the Government ration to them even without they having any ration card.
  • all the migrant workers do not intend to go back to their native place due to opening up of so many industries / establishments.
  • wherever the migrant workers are found walking on-foot, there are instructions to the State Authorities to facilitate a bus or a vehicle for them to take to their onward journey or they are sent to relief camps and provided shelter and food.

Observations of the Court

The Court noticed that although there is no doubt that the concerned State Governments/Union Territories are taking steps to do the needful but there are several difficulties and lapses which are being noticed. It was, however, of the opinion that

“both the Central Government and the State Governments / Union Territories are required to be given some reasonable time to bring the steps taken by them on the record.”

It, hence, issued interim directions pending consideration of the detailed reply and affidavits from the State Governments and the Central Government.

Interim Directions

  1. No fare either by train or by bus shall be charged from any migrant workers.
  2. The migrant workers who are stranded at different places in the country shall be provided food free of cost by the concerned States/Union Territories at different places which shall be publicized and notified to them during the period they are waiting for their turn to board the train or bus.
  3. The originating State shall provide water and meal and during the journey, the railways shall provide meal and water to the migrant workers and same facilities shall be extended when the migrant workers are transported by bus. The State shall take care of providing necessities water and meal during the period of transportation either in the bus or in the camps on the way.
  4. The State shall simplify and speed up the process of registration of migrant workers and also provide help desk for registration at the places where they are stranded.
  5. The State shall try to endeavour that after registration the workers should be asked to board the train or bus at the earliest and complete information should be publicized to all the concerned regarding mode of transport.
  6. Those migrant workers who are found walking on the highways or roads shall be immediately taken care by the concerned State / Union Territories and they shall be provided the transport to the destination and all facilities including food and water be provided to those found walking on the road.
  7. The receiving State, after the migrant workers reach his native place, shall provide transport, health screening and other facilities free of cost.

The Court will next take up the matter on 05.06.2020.

[In re : Problems and Miseries of Migrant Labourers, SUO MOTU WRIT PETITION (CIVIL) No(s). 6/2020, order dated 28.05.2020]

Case BriefsCOVID 19Supreme Court

Taking suo motu cognizance of problems and miseries of migrant labourers who had been stranded in different parts of the country, the 3-judge bench of Ashok Bhushan, SK Kaul and MR Shah, JJ has issued notice to the Union of India and all States / Union Territories to submit their responses by Thursday i.e. 28.05.2020, looking into the urgency of the matter.

The Court took sup motu cognizance based on, newspaper and media reports and several letters and representations it received from different sections of society highlighting the problem of migrant labourers.

The Court said that the newspaper reports and the media reports have been continuously showing the unfortuanate and miserable conditions of migrant labourers walking on-foot and cycles from long distances. They have also been complaining of not being provided food and water by the administration at places where they were stranded or in the way i.e. highways from which they proceeded on-foot, cycles or other modes of transport.

“In the present situation of lockdown in the entire country, this section of the society needs succor and help by the concerned Governments especially steps need to be taken by the Government of India, State Governments/Union Territories in this difficult situation to extend helping hand to these migrant labourers.”

Noticing that although the Government of India and the State Governments have taken measures yet there have been inadequacies and certain lapses, the Court was of the view that effective concentrated efforts are required to redeem the situation. It said,

“The adequate transport arrangement, food and shelters are immediately to be 1 provided by the Centre and State Governments free of costs.”

The Court, hence, directed the Solicitor General Tushar Mehta to assist the Court and by the next date of hearing bring in the notice of the Court all measures and steps taken by the Government of India and to be taken in this regard.

[In re : Problems and Miseries of Migrant Labourers. SUO MOTU WRIT PETITION (CIVIL) No(s). 6/2020, order dated 26.05.2020]

Case BriefsCOVID 19Supreme Court

Supreme Court: Considering the hardship of the passengers who are stranded on foreign soil at the airports after they were issued valid tickets for travel, the 3-judge bench of SA Bobde, CJ and AS Bopanna and Hrishikesh Roy, JJ has directed that Air India be allowed to operate the non-scheduled flights with the middle seats booking upto 6th June, 2020. However,

“after that the Air India will operate non-scheduled flights in accordance with the interim order to be passed by the Bombay High Court thereafter.”

The hearing was conducted through video conferencing on Eid holiday, considering the urgent nature of the matter.

The said order of the Court came after Solicitor General Tushar Mehta submitted before the Court that the stranded passengers are under a lot of anxiety and difficulties arising from want of proper shelter, money, etc., at the foreign airports. Also, in some cases, the travel plan of families who were travelling together has been disrupted because those in the families who had middle seats have to be off loaded and remain behind.

The Court, hence, remanded the matter to the Bombay High Court and asked it to pass an effective interim order after hearing all concerned on the date fixed i.e. 2nd June, 2020 by it or soon thereafter. It also asked the High Court to arrive at a prima facie finding regarding the safety and health of the passengers qua the COVID-19 virus, whether the flight is scheduled flight or a non-scheduled flight.

The Court, however, made it clear that the Director General of Civil Aviation is free to alter any norms he may consider necessary during the pendency of the matter in the interest of public health and safety of the passengers rather than of commercial considerations.

[Union of India v. Deven Yogesh Kanani, SPECIAL LEAVE PETITION (CIVIL) Diary No(s).11629/2020, order dated 25.05.2020]

OP. ED.

When the existence of the novel Coronavirus started featuring in the news space following China’s confirmation of its spread in the month of January, 2020, it was considered a novel, elusive actuality. It did not qualify as sufficient cause for concern and alarm which could have potentially sparked much needed preparations. However, in the past three months, the number of confirmed cases and resultant deaths due to Covid-19 (the disease caused by Coronavirus) has risen exponentially across the globe leading the World Health Organisation (WHO) to officially declare the corona virus outbreak as a “pandemic” on 11-3-2020[1].

In such persisting circumstances, the Government of India, in its endeavour to contain the extraordinary outbreak of the Coronavirus and its staggering effects, declared a nationwide lockdown. In the face of the unprecedented situations which have arisen as a result of the complete lockdown, many facets of our system find themselves temporarily inoperative. The disruption of the supply chain is one such inevitable corollary. Given this context, it is likely that performances under many existing contracts will be interrupted, postponed or cancelled. Such state of affairs then throws open many questions viz: Can the present day situation posed by COVID-19 pandemic qualify as “Force Majeure”, whether or not parties to the contracts/agreements can plead for being excused from performing their part of the contract citing force majeure and how will the contracts/agreements wherein, there is no specific force majeure clause would be governed in situation of supervening impossibility etc. This article would attempt to cover answers to all the afore-mentioned questions in light of the existing statutory provisions and the law laid down by the various courts of law in form of case laws.

Meaning of Force Majeure

The concept of force majeure[2] owes its origin to Roman Law which recognised the principle of “clausula rebus sic stantibus” which provides that obligations under a contract are binding so long as the situation existing at the time the contract was entered into fundamentally remains the same. The term force majeure refers to an event or effect that can be neither anticipated nor controlled. To put it differently, any event or circumstance which is within the reasonable control of the contracting parties does not qualify as force majeure. Legally, it is a contractual provision allocating the risk of loss if performance becomes impossible or impracticable, especially as a result of an event that the parties could not have anticipated or controlled[3]. From a contractual perspective, the concept gains significance in as much as it provides protection to contracting parties in cases of virtual and actual impossibility of performance of contract. Hence, where reference is made to force majeure, the intention is to save the performing party from consequences of anything over which he has no control[4].

Force Majeure and Contract Act, 1872

While the provisions contained in the Contract Act, 1872 neither define the term ‘force majeure’ nor do they typically spell out the specific circumstances and events which would qualify as ‘force majeure events’, nevertheless the references to the same may be gathered from certain specific provisions laid therein.

In cases where the contract entered into between the parties contains an express or implied force majeure clause, defining the type of events, such as war, terrorism, earthquakes, hurricanes, acts of government, plagues or epidemics etc., the dissolution of the contract would take place under the terms of the contract itself and such cases would be dealt with under Section 32 of the Contract Act, 1872[5]. A force majeure clause should be construed in each case with a close attention to the words which precede or follow it, and with due regard to the nature and general terms of the contract. The effect of the clause may vary with each instrument[6]. The relevant provision as contained in Section 32 of the Contract Act, 1872 is as follows:

32. Enforcement of Contracts contingent on an event happening.- Contingent contracts to do or not to do anything if an uncertain future event happens, cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such contracts become void.

However, when no relevant event is mentioned in a contract, the occurrence of which frustrates the very purpose of the contract, the provision contained in Section 56 of the Act comes into play. Section 56 of the  Contract Act, 1872 embodies the “doctrine of frustration”. Briefly, “frustration” is an English contract law doctrine that acts as a device which serves to dissolve a contract when, as a result of an unforeseen instance, the obligations covered by it are rendered impossible to fulfil or the principal purpose for entering into the contact on the part of either party is fundamentally altered[7]. Generally speaking, the doctrine of frustration as embodied in Section 56 is relied upon for termination of contract. Section 56 of the  Contract Act, 1872 reads as follows:

56. Agreement to do impossible act.- An agreement to do an act impossible in itself is void.

Contract to do act afterwards becoming impossible or unlawful. A contract to do an act which, after the contract made, becomes impossible or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.

Compensation for loss through non-performance of act known to be impossible or unlawful. Where one person has promised to do something which he knew or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promise for any loss which such promisee sustains through the non-performance of the promise.

As is manifest from the perusal of the aforementioned provision, the first paragraph of Section 56 provides that an agreement to do an act impossible in itself is voidwhile the second paragraph of the same lays that a contract to do an act becomes void when such an act becomes: (a) impossible; or (b) unlawful by reason of some event which the promisor could not prevent. Under Section 56, the court can proceed to grant relief on the ground of subsequent impossibility when the very foundation of the contract becomes upset by the happening of an unforeseen event which was not anticipated by the parties at the time when the contract was entered into by them[8]. Such event or change must be so fundamental as to be regarded by law as striking at the root of contract as a whole[9]. Therefore, where performance is rendered invalid by intervention of law, or where the subject-matter assumed by the contracting parties to continue to exist is destroyed or a state of thing assumed to be the foundation of the contract fails, or does not happen, or where the performance is to be rendered personally by a person who dies or is disabled, the contract stands discharged[10]. Thus, in a nutshell, it can be said that where there is clear stipulation in the terms of the contract upon which the performance of the contract is dependant, such contracts would be governed by Section 32 of the Contract Act, 1872 and wherever, there is no such stipulation in the contract, such contracts would be governed by Section 56 of the  Contract Act, 1872 in cases a supervening impossibility arises. The said applicability of Section 32 vis-à-vis Section 56 of the Contract Act, 1872 has recently been delved into by the  Supreme Court of India as an ancillary issue in  National Agricultural Cooperative Marketing Federation of India v. Alimenta S.A.[11]

Whether situation posed by COVID-19 pandemic qualifies as Force Majeure event?

In response to the potential ramifications of the Covid-19 pandemic in the functioning of the economic and industrial machinery, notifications and advisories have been issued by the Government of India in an attempt to bring in some semblance of stability.

For instance, on 19-2-2020, the Ministry of Finance, Government of India issued a notification[12] clarifying that the disruption of supply chains due to the spread of coronavirus should be considered as a case of natural calamity and force majeure clause may be invoked, wherever considered appropriate, following due procedures. The aforementioned notification further stipulates that “coronavirus should be considered as a case of natural calamity and force majeure may be invoked, wherever considered appropriate, following the due procedure…a force majeure clause does not excuse a party’s non performance entirely, but only suspends it for the duration of the force majeure. The firm has to give notice of force majeure as soon as it occurs and it cannot be claimed ex-post facto…If the performance in whole or in part or any obligation under the contract is prevented or delayed by any reason of force majeure for a period exceeding ninety days, either party may at its option terminate the contract without any financial repercussion on either side”. However, the aforesaid Office Memorandum may not necessarily or implicitly serve as binding document for the contracting parties, being more in the form of an advisory or recommendation. 

In addition to the above, the question as to whether COVID-19 outbreak along with its consequential restrictions including the quarantines, travel restrictions or other related limitations on normal business imposed by government would qualify as force majeure, would depend on the language of the clause and the rules of legal interpretation of force majeure clauses[13]. Hence, the wordings used in different clauses of the contract assume salience in order to find out as to whether or not parties to the contracts/agreements can plead for being excused from performing their part of the contract citing force majeure given the situation posed by the COVID-19 pandemic. For the aforesaid purpose, further discussion in this article is broadly categorised into two headings — (i) Firstly, cases where force majeure clause is enshrined in the contract itself, and (ii) Secondly, cases where force majeure clause is not enshrined in the contract.

1. If Force Majeure Clause is enshrined in the Contract

Pertinently, if the force majeure clause in the contract refers to a pandemic or an epidemic, the same may be pleaded and urged by contracting parties where performance of the contract entered between them has become practically and commercially impracticable on account of COVID-19 outbreak. Where a contracting party seeks to claim relief under the force majeure clause, the occurrence of one of the events set out in the force majeure clause is needed to be proved and the burden of proof lies on the party which invokes the force majeure clause.

Now, in contracts where the force majeure clause explicitly covers pandemics and epidemics or situations arisen by responses to the pandemic or epidemic, the discharge of the aforementioned burden remains fairly uncomplicated. However, complications arise in a scenario where a force majeure clause simply uses the phrase ‘event beyond the reasonable control of parties’. Here, to facilitate swift and favourable discernment of disputes, it becomes vitally important for the party invoking the force majeure clause to maintain any and all documents related to the event in question which may prove to be consequential in the ascertaining process. In regard to this discussion, the said documents may include (i) any notification and/or guideline issued by the national and/or state governments imposing restrictions on trade, (ii) definite forms of information from reliable media sources related to COVID-19 outbreak, restrictions on public movement and/or mandatory shutdown of modes of travel (iii) documents revealing any cancellations disrupting travel itinerary, such as cancelled/rejected visa et al.

2. If Force Majeure Clause is not enshrined in the Contract

As has been discussed earlier, when an event which is not mentioned in the contract takes place which frustrates the very purpose thereof, the provision contained in Section 56 of the Contract Act, 1872 shall come into play. The  Supreme Court of India, while explaining the concept of frustration in contract law in Satyabrata Ghosh v. Mugneeram Bangur & Amp; Co.[14] has held that the word “impossible” has not been used with respect to physical or literal impossibility. Where an unexpected occurrence or change in circumstances decimates the very objective of the contract the same may be considered as “impossibility” to do as agreed.

A study of the landmark judgments rendered by the  Supreme Court of India over the course of time showcases a very high threshold to apply the concept of force majeure which requires the entire foundation of the contract to be shown to be obliterated. An existing contract shall cease to bind the contracting parties only when consideration of the terms of the contract, in light of the circumstances existing when it was entered into, shows that there was no agreement to be bound in a fundamentally different and unexpected situation. The performance of a contract is never discharged merely on the ground that the same may become onerous to one of the parties[15]. In order elucidate and highlight the threshold defined by the Indian courts for citing force majeure by contracting parties, certain celebrated judgments rendered by the Supreme Court are discussed below:

In Satyabhrata Ghose case (supra), it was held by the Supreme Court of India that the contract of sale for a chunk of land was not frustrated and performance thereunder could not be said to be rendered impossible under Section 56 of the Contract Act, 1872 merely because the said land had been requisitioned by the Government for military purposes during the Second World War. The Supreme Court even went ahead to observe that during the war, the parties could naturally anticipate restrictions of various kinds which would make performance under contracts more difficult than in times of peace and therefore, the requisitioning of the land which formed the subject matter of the contract of sale could not be said to affect the fundamental basis upon which the agreement rested or strike at the roots of the adventure.

Likewise, in Alopi Parshad & Sons Ltd. v. Union of India[16], the claim of the appellant for enhanced prices for supply of ghee for Army personnel during the second world war was rejected by the Supreme Court despite enormous scarcity and enhanced procurement expenses owing to conditions of war and it was categorically held by the court that the parties to an executory contract are often faced with a turn of events which they did not at all anticipate, such as, an abnormal rise or fall in prices, a sudden depreciation of currency etc. However, the same does not per se affect the bargain they have made.

In Naihati Jute Mills Ltd v. Hyaliram Jagannath[17] while observing that it is not hardship or inconvenience or material loss which brings about the principle of frustration into play, the Supreme Court held that rejection of an import licence to a jute supplier sourcing Pakistani jute could not be said to have rendered performance under the contract entered into between the parties as impossible.

More recently, in Energy Watchdog v. Central Electricity Regulatory Commission[18] the rise in price of coal consequent to change in Indonesian Law, which though admittedly rendered the contract commercially impossible, was not treated as a force majeure event by the Supreme Court as neither was the fundamental basis of the contract, which in this case was to generate and supply energy from coal, was shown to be dislodged nor was any frustrating event, except for a rise in the price of coal, pointed out. On the contrary, the Court observed that where alternative modes of performance of obligations under the contract were available, albeit at a higher price, the same could not be treated to have been frustrated.

Conclusion

There is no gainsaying that the behemoth of COVID-19 has inter alia virtually brought economic activity to a halt and has disturbed the chain of production, supply and distribution. However, it would be extremely difficult, if not impossible; to prove beyond reasonable doubt that disruptions qua unprecedented outbreak of COVID-19 pandemic have radically and irreversibly dislodged the very bargain contemplated in a contract, particularly in view of the temporariness of such disruptions or for that matter the full probability of resumption of the “pre-Corona” times. Mere inconveniences, difficulty, pause or delay in performance of obligations under a contract owing to COVID-19 pandemic and its consequential restrictions would not hold ground to treat the same as a force majeure event given the little judicial importance offered by the courts of law to such parameters while defining the high benchmark for force majeure to apply. However, given that the Courts would assess the application of concept of force majeure in light of the facts and circumstances of each case presented before them, by either resorting to principle of equity or by adopting a more technical approach, it would be imperative for the contracting parties be thorough with the terms and clauses incorporated in the contract as well as their contractual rights and obligations thereunder.


*Author is a graduate of University of Cambridge (United Kingdom) with a specialisation in Commercial Laws. Currently practicing law before the Lucknow Bench of Allahabad High Court.

**Co-Author is a gold medallist in law from Unity Post Graduate and Law College Lucknow (affiliated to Lucknow University, Lucknow). Currently practicing law before the Lucknow Bench of  Allahabad High Court.

The authors deeply acknowledge the guidance of Mr. Gaurav Mehrotra, Advocate

[1] See World Health Organisation Virtual Press Conference on Covid-19, 11th March 2020 available at https://www.who.int/docs/default-source/coronaviruse/transcripts/who-audio-emergencies-coronavirus-press-conference-full-and-final-11mar2020.pdf?sfvrsn=cb432bb3_2

[2] The term force majeure has been borrowed from French, the literal translation whereof is “superior force” in English.

[3] Black’s Law Dictionary, 11th Edition, at page 788.

[4] Dhanrajamal Gobindram v. Shamji Kalidas & Co., (1961) 3 SCR 1020

[5] Satyabrata Ghose v. Mugneeram Bangur & Co., 1954 SCR 310

[6] Lebeeaupin v. Crispin, (1920) 2 K.B. 714 

[7] Taylor v. Caldwell , (1863) 3 B & S 826

[8] Naihati Jute Mills Ltd. v. Khyaliram, (1968) 1 SCR 821 

[9] Satyabhrata Ghose v. Mugneeram Bangur, 1954 SCR 310

[10] Raja Dhruv Dev Chand v. Harmohinder Singh, (1968) 3 SCR 339 

[11] 2020 SCC OnLine SC 381  

[12] Office Memorandum No.F. 18/4/2020-PPD titled ‘Force Majeure Clause’, issued by Department of    Expenditure, Procurement Policy Division, Ministry of Finance, Government of India

[13] Mulla & Pollock on Indian Contract Act, 1872 & Specific Relief Act, 1967, page 1181.

[14] 1954 SCR 310 (12) 

[15] Alopi Parshad & Sons Ltd. v. Union of India, 1960 (2) SCR 793

[16] 1960 (2) SCR 793

[17] (1968) 1 SCR 821

[18] (2017) 14 SCC 80

COVID 19Hot Off The PressNews

The Supreme Court Registry has notified the list of 1239 matters that are likely to be heard by the Supreme Court through Video Conferencing from June 1, 2020.

Earlier, the Registry had notified the new schedule for summer vacations of the Court. The Notice read:

“the period from 18th May, 2020 to 19th June, 2020 (both inclusive) shall be declared as period functioning for the Supreme Court of India.”

The Court was originally supposed to remain closed from May 18, 2020 to July 5, 2020 but the same was changed due to the ongoing Coronavirus Pandemic.  The Court had, on March 23, 2020, opted to hold video-conference to hear urgent matters in an unprecedented move

Click here to access the list of matter.


Also read: 

COVID-19| No in-person hearings in SC till further notice; Extremely urgent matters to be heard via video conference

COVID-19| Here’s the list of directions issued by CJI Bobde in the light of Coronavirus lockdown

COVID-19| SC extends limitation period for filing petitions/applications/suits/appeals, etc

COVID-19| SC extends limitation prescribed under the A&C, 1996 and the NI Act,1881

COVID 19Hot Off The PressNews

In a communication to the States, Union Ministry of Home Affairs (MHA) has noted that fear of COVID-19 infection and apprehension of loss of livelihood are the main driving factors for the movement of stranded workers towards their homes.

In order to mitigate the distress of migrant workers, the communication stresses on a number of measures that may be taken by the State governments, pro-actively in coordination with the Centre. These are:

  • Operation of more special trains by pro-active coordination between States and with Ministry of Railways;
  • Increase in number of buses for transporting migrants; allowing entry of buses carrying migrants at inter-state border;
  • More clarity may be given about departure of trains/ buses, as lack of clarity coupled with rumours caused unrest amongst the workers;
  • Arrangement of designated rest places, with adequate facilities for sanitation, food and healthcare, could be made by the States on routes where migrants are known to be already travelling on foot;
  • District Authorities may guide workers moving on foot to designated rest places, nearby bus terminals or railway stations by arranging transportation;
  • Special attention may be given to the specific requirements of women, children and elderly amongst the migrant workers;
  • District Authorities may involve NGO representatives at rest places etc, to alleviate the notion of long quarantine at rest places. Workers may also be encouraged to remain at places where they are;
  • Enlisting the migrants with their addresses and contact numbers. This may be helpful in contact tracing in due course.

The communication reiterates that District Authorities must ensure that no migrant worker has to resort to walking on roads or railway tracks to reach his/her destination. They may request Ministry of Railways for running trains, as per requirement.

Click here to see Official Communication to States


Ministry of Home Affairs

[Press Release dt. 19-05-2020]

[Source: PIB]

COVID 19Hot Off The PressNews

Office of the Districts & Sessions Judge, Tis Hazari Court, Delhi issues a Circular dated 18th May, 2020 in view of the Coronavirus Pandemic with following directions:

  • Lawyers/Munshis/Litigants/Naib Courts/Police Officials may be asked through court staff not to use saliva while affixing court fee stamps on the application/petition and envelopes containing summons/notices etc.

  • Officials are also directed to not use saliva while doing the pagination of files etc.

  • Court Staff advise the lawyers to use plastic sponge damper pad while inspecting judicial file.


Office of The District & Sessions Judge (HQs)

Tis Hazari Court, Delhi

[Circular dt. 18-05-2020]

COVID 19OP. ED.

The world we live in today is bigger in size than what it was hundred years ago when it saw its last major pandemic. Nowadays, it is a matter of few hours for a viral infection to travel from one part of the world to another through human carriers. However, business houses are seldom concerned about the issues that don’t affect their profit earning capacity. In January 2019, World Economic Forum (WEF) in collaboration with Harvard Global Health Institute released a report titled “Outbreak Readiness and Business Impact Protecting Lives and Livelihoods across the Global Economy[1]” (‘hereinafter the Report’) emphasising the need for business leaders to be more aware of the dialogue about global health, a topic which is rarely considered a subject worthy of attention, investment and advocacy. The aim of the Report was to warn the corporate houses about the threat that may haunt them in the worst of their dreams, which has now become a reality after the outbreak of COVID-19. Therefore, in this article, the authors have analysed the relation of the Report to the current situation along with crisis management tools necessary to be deployed in such a situation.

International obligation

Considering the shared vulnerability of all the countries due to global outbreak of diseases, 196 countries of the world (including all member nations of the WHO) being a part of International Health Regulations (IHR), had agreed to help the international community prevent and respond to acute public health risks that could potentially cross borders and threaten people worldwide. The regulations have two primary objectives which focus on strengthening preparedness and capacity to respond public health threats and support international response to outbreaks.

Key aspects of the Report

The Report suggested that more than 80% of countries that have assessed their preparedness to date, were not ready to find, stop or prevent an epidemic. A year later, this proves to be correct and we see the whole world coming to a standstill[2] and waiting for the situation to improve. Had this Report been taken seriously, the world could have been in a better situation to face this crisis.

The Report also stated that “Investments needed to improve pandemic preparedness are not large relative to the risk of being unprepared. After all, responding to outbreaks once they have occurred is far more expensive, in lives and money.”[3] Such analysis, a year ago, cannot be considered a mere prediction but based on facts and past precedents as was the case in Ebola, SARS, MERS etc. Using data from the flu pandemics of the 20th century, a report by the Commission on a Global Health Risk Framework for the Future estimated the annualised impact of flu pandemics at roughly $60 billion[4], more than doubling the previous estimates. In the current situation, however, it is difficult to predict the amount of loss the whole world would be suffering from.

The Report also stated how, many companies assume that operational continuity insurance would compensate them for any losses arising from outbreaks, being unaware that such policies mostly exclude infectious disease outbreaks as a contingent event. Such policies are therefore, bound to change in future and more attention would now be given to mitigate such a situation. In times when only a few companies would have thought about pandemic insurance, Wimbledon paid around £25.5 million as premium over 17-year period. Defying many experts this proved to be a very sensible investment[5], as they are now set to receive an insurance pay-out of around £114 million on this year’s cancelled tournament.

During an outbreak, loss of access to a major mineral deposit (or in other contexts to production facilities, among others) through border closures, quarantines or worker illness represents a significant threat to firms. Extensive layoffs can have far-reaching effects, including reductions and disruptions in investment in human capital, leading to concerns for broader investment and development goals for the affected regions. In the present scenario as well, though advisories have been issued by the government prohibiting layoffs, it can neither be considered as law nor a solution to those companies who are left with no other option. For example, fitness group ‘Cure. Fit’[6] axed 800 employees and is now inclined towards all digital move. Therefore, until and unless the Government takes an initiative to protect these companies, extensive layoffs are bound to happen.

Analysing it further, taking example of the new recruits selected through campus placements we can see that many law firms including CAM, Khaitan & Co. have pushed their joining dates to October[7]. However, in many sectors, companies have restricted themselves from issuing new joining letters in these immediate months of financial stringency. Thus, along with layoffs this will lead to a situation of rampant unemployment in the country which would eventually result in decrease in aggregate demand. As a consequence, production would be reduced bringing us to the similar situation where companies would be compelled to reduce their workforce.

Changes in business model so as to overcome pandemic like situations

The Report under discussion had enumerated how infectious diseases may pose potential threats on various variables of the trade and commerce which would lead to a shift in their traditional ideologies regarding suppliers, employees, chains of trade, customers and even investors and other regulatory regimes. This change was earlier experienced during liberalisation in favour of cross-border trade and now, after the outbreak of COVID-19, a limitation to global integration is thought upon. Companies should employ both domestic and multinational variables in their operations. For instance, supplier of raw materials should not belong to one particular country so that any adverse event in that particular nation does not affect their potency. Therefore, domestic suppliers must also be identified. Furthermore, maintaining a varied customer base might ensure continued sale even if a part of the world faces adversities and prevent a total shut down of the operations during such crisis.

Economists had estimated that, in the coming decades, pandemics would cause average annual economic losses of 0.7% of global GDP[8] – a threat similar to that estimated for climate change, which businesses can no longer afford to ignore. Thus, public-private cooperation has become essential in order to mitigate costs and strengthen health security effectively. Also, businesses should apply their vision to provide for any similar risk that may occur like creating a provision in advance for the salaries to be paid during lockdowns i.e. at the time of non-contribution to the business. The provisions must also be made for any contributions that the company, in order to appear socially committed and to fulfil their CSR obligations, have to contribute towards national funds. Moreover, alternatives to the already existing suppliers must also be identified keeping themselves ready to pay any higher amount for raw materials at the time of emergencies.

Crisis Management

Companies that effectively put a business continuity plan in place in the occasion of unforeseen contingencies can mitigate the effects of any negative event that occurs. Where risk management is to plan for future unforeseen events, the crisis management is to manage the already occurred negative event. In order to have a business continuity plan in the aftermath of a crisis, most firms start by conducting risk analysis on their operations. However, the question remains whether the companies globally have ever wondered to consider pandemic as a major risk to their operations?

A model to cope up with the changing dimensions of the diversified variables in the business domain may include supply chain modifications, developing infrastructure for work from home to avoid disruptions and shifting from total human force to machine intensive model (to some extent) in order to keep the factory running even at the times of human absence.

This episode of economic duress outlines the importance of savings and maintaining a contingency fund (might coin a term “pandemic fund”) to deal with fixed costs during business shutdowns become necessary. Taking the example of US Airlines, the Senate had approved a $50 billion bailout package in order to save the airline industry. However, such bailouts using taxpayers’ money would have been easier to stomach if airlines had not spent their cash flow during boom years on stock buybacks and rather conserved it for the times of unforeseen economic shock[9].

In this event of crisis, the organisation which is able to swiftly diversify and succumb to the need of the hour wins the battle of gaining public reputation by yielding the benefits of operating in another field. For example, quick action to undertake production of hand sanitizers and masks by companies who were known for different line of production[10]. Therefore, companies must have a proper management to take quick decisions during emergencies and to immediately capture the emerging opportunity in the business environment.

Pertaining to the current circumstance, the development of sensitive gears fostering health care requires proper regulatory clearance and certification. This is where the role of the Government sneaks in to undertake the certification on a priority basis. It can also lure business organisations by offering tax benefits, including their operations under their CSR activity, reducing their licensing fee, fixing minimum support price for the products to be manufactured and ensuring availability of duty-free raw material.

Conclusion

Since the Report was issued in 2019, in a way, it had a capacity to warn the world at large which was totally unprepared to contain an unforeseen emergency in the form of a global disease outbreak. Since, no country paid adequate attention to it at that time; the unprepared world continues to suffer from the pandemic.During COVID-19, the world is experiencing an extraordinary blow in terms of health and economy, which eventually are somehow connected. Stern measures and policy decisions should be undertaken to prevent such losses in future. Post COVID-19, the world may experience a steep shift from globalisation to domestication owing to the fear attached with the spread of the disease, affecting sectors like EXIM, tourism, aviation, etc. the most. Therefore, a comprehensive plan, both by the Government and companies, should be devised to fight the upcoming economic depression and proper crisis management tools must be deployed by the companies for any future unprecedented event.


* IIIrd Year, BA LLB (Hons.) students at Dr. RMLNLU, Lucknow

[1] World Economic Forum, Outbreak Readiness and Business Impact Protecting Lives and Livelihoods across the Global Economy (White Paper, January 2019).

[2] Rosamond Hutt, ‘Here’s what countries are doing to slow the coronavirus outbreak’ (World Economic Forum, 14 April 2020) < https://www.weforum.org/agenda/2020/02/coronavirus-spread-virus-disease-countries-epidemic/> accessed on 1 May 2020.

[3] The Report (n 1).

[4] The Commission on a Global Health Risk Framework for the Future, ‘The Neglected Dimension of Global Security: A Framework to Counter Infectious Disease Crises’ (National Academy of Medicine, May 2016).

[5] ‘Wimbledon Shows How Pandemic Insurance Could Become Vital for Sports, Other Events’ (Insurance Journal, 13 April 2020) <https://www.insurancejournal.com/news/international/2020/04/13/564598.htm>.

[6] ‘Covid-19: Fitness group cure.fit axes 800 employees, mulls all-digital move’ (Livemint, 4 May 2020) <https://www.livemint.com/companies/start-ups/covid-19-fitness-group-cure-fit-axes-800-employees-mulls-all-digital-move-11588602490506.html>.

[7] Pallavi Saluja, ‘Cyril Amarchand Mangaldas, Khaitan & Co. push joining dates of freshers to October’ (Bar & Bench, 2 May 2020) <https://www.barandbench.com/news/corporate/exclusive-cyril-amarchand-mangaldas-khaitan-co-push-joining-dates-of-freshers-to-october>.

[8] The Report (n 1)

[9] Clancy Morgan, ‘Airline salaries compared to stock buybacks show why so many people are angry at the bailout’ (Business Insider, 22 April 2020).

[10] ‘From perfume to hand sanitiser, TVs to face masks: how companies are changing track to fight COVID-19’ (World Economic Forum, 24 March 2020).

COVID 19Hot Off The PressNews

What did Ministry of Home Affairs state in the May 17th, 2020 Order with regard to the ‘Payment of Wages’?

On 29th March, 2020, Ministry of Home and Affairs had issued an Order wherein additional measures to alleviate the hardships of migrant workers was the focus.

Following the above, National Executive Committee in exercise of its powers conferred under Section 10(2)(1) of Disaster Management Act, 2005, State/UTs were asked to issue necessary order and 5 additional measures were issued amongst which, following was with regard to payment of wages to workers,

All employers, be it in the Industry or in the shops and commercial establishments, shall make payment of wages of their workers, at their work places, on the due date, without any deduction for the period their establishments are under closure during the lockdown.

According to the said order, Employers were asked to may payment of wages without any deduction for the period of closure to the workers.

Whereas, according to the May 17, 2020 Order wherein the guidelines for Lockdown 4 has been issued, Ministry of Home Affairs has explicitly stated that the following:

“Whereas, save as otherwise provided in the guidelines annexed to this Order, all Orders issued by NEC under Section 10(2)(1) of the Disaster Management Act, 2005, shall cease to have effect from 18.05.2020”

According to the said statement, the measure regarding payment of wages by the employers without any deduction for the period of closure to the workers shall have a ceased effect which came into effect from 18th May, 2020.

COVID 19Law made Easy

As the world is struggling to overcome the mass destruction that deadly COVID-19 disease is causing, India is also scuffling to eradicate and aware the citizens about the effects that spitting in open public spaces leads to.

Spitting in India is as common as that warning sign of “no spitting” at all places possible. Though a number of laws and provisions by the Centre and State have been laid down, yet this particular issue is a major hurdle that our country needs to surpass.

Especially in these times of COVID-19, spitting could be one of the major stumbling block that would only increase the precariousness of this disease and if we as a country could overcome this peril then we could probably be able to move one step ahead in defeating this deadly pandemic.

Laws against Spitting in India

Central Acts & Rules [List is inclusive, not exhaustive]

Spittoons- (1) In every factory there shall be provided a sufficient number of spittoons in convenient places and they shall be maintained in a clean and hygienic condition.

(2) The State Government may make rules, prescribing the type and the number of spittoons to be provided and their location in any factory and provide for such further matters relating to their maintenance in a clean and hygienic condition.

(3) No person shall spit within the premises of a factory except in the spittoons provided for the purpose and a notice containing this provision and the penalty for its violation shall be prominently displayed at suitable places in the premises.

(4) Whoever spits in contravention of sub-section (3) shall be punishable with fine not exceeding five rupees.

Rule 3 Clause (b) read with Rule 4

Rule 3 talks about the — Prohibition of activities affecting cleanliness and hygiene in the railway premises

Under the above rule, clause(b) specifically talks about that No Person shall cook, bathe, spit, urinate, defecate , feed animals or birds, repair or wash vehicles , washing utensils or clothes or any other objects or keep any type of storage in any railway premises except in such facilities or conveniences specifically provided for any of these purposes

Further, Rule 4 is the penal provision for violation of the above stated Rule, wherein the Fine would amount to Rupees 500.

What is to be read in the said regulation?

Regulation 98 [sub-rule (2) in specific] 

Now, Regulation 98 specifically talks about “Spittoons”

  1. In every portion of a dock including warehouses and store places, sufficient number of spittoons shall be provided in convenient places and they shall be maintained in a clean and hygienic condition.
  2. No person shall spit in the dock area except in the spittoons provided for the purpose and a notice containing this provision shall be prominently displayed at suitable places.
  3. Whoever spits in contravention of sub-regulation (2) shall be punishable with a fine not exceeding one hundred rupees.
  4. The spittoons shall be of an approved type.
  5. The spittoons shall be emptied, cleaned and disinfected at least once in every day.

State Acts

Almost every State has similar provisions against the menace of spitting in public in their Municipal Acts. Similar anti-spitting provisions are also noticed in Police Acts of various States. However, a few States also have specific Acts prohibiting/penalising spitting in public. Again, the following list is inclusive, not exhaustive.

  • Kerala Prisons and Correctional Services (Management) Act, 2010 : Section 81(9) r/w Section 82 Madhya Pradesh Public Health Act, 1949
  • Nagaland Municipal Act, 2001 : Section 441 r/w Sections 471, 472
  • Orissa Urban Police Act, 2003 : Sections 80 [clause (c) to be specific], 83 r/w Section 84
  • T.N. Prohibition of Smoking and Spitting Act, 2002 : Sections 4, 5, 8 r/w Section 2(h) r/w Sections 9(1), 12
  • W.B. of Smoking & Spitting and Protection of Health of Non-smokers and Minors Act, 2001 : Sections 5, 6, 10 r/w Section 2(8) r/w Sections 11(1), 14

Below is an awareness video by Ministry of Health and Family Welfare highlighting the dangers that is lead towards on spitting in public spaces in view of the Coronavirus Pandemic.

Following are the points that have been featured in the video:

  • Spitting in public spaces is in itself “PROHIBITED” and the same stand can be maintained various Central and State Rules and Regulations as underlined above.
  • Spitting in public places increased the dangers of COVID-19.
  • To contain the outbreak of COVID-19, cleanliness of circumambient should be looked after
  • Spitting in public places and open surfaces adds to the danger and outbreak of COVID19.

Please follow the link to have a look at the video:

Video

COVID 19Hot Off The PressNews

National Directives for COVID-19 Management

  • Compulsory wearing of face cover in public and work places.
  • Spitting in public and work places punishable with fine.
  • Social distancing to be followed in public places and in public transport.
  • Marriage related gathering shall ensure social distancing and maximum number of guests not to be more than 50.
  • Funeral/last rites related gathering shall ensure social distancing and max. number allowed not to be more than 20.
  • Consumption of liquor, paan, gutka, tobacco etc. in public places not allowed.
  • Shops to ensure minimum six feet distance among customers and not more than 5 persons allowed in shops.

Ministry of Home Affairs ORDER

Case BriefsCOVID 19High Courts

Allahabad High Court: A Division Bench of Govind Mathur, CJ and Siddharth Varma, J., while addressing the present Public Interest Litigation stated that,

“We have no doubts that the State of Uttar Pradesh is leaving no stone unturned in extending medical relief to all.”

It was stated in the application filed by Standing Counsel Gaurav Kumar Gaur that Sri V.K. Singh died owing to the negligence of medical staff he added that no attention was being paid to the complaints of his wife who is also at present being treated along with other family members.

Bench stated that on perusal of the photographs of ward and hospitals where COVID-19 Patients are being treated it is not difficult to conclude that state of affairs is not very good.

Court asked the State to provide information with regard to the following:

  • What is the reason that despite various orders and directions of the State Government to keep the Covid-19 virus hospitals clean and sanitized, they are neither cleaned nor sanitized?
  • Why state of the art medical facilities are not being made available in the T.B. Supru Hospital, the Colvin Hospital and in the 105 other Samudayik Chikitsalayas at Prayagraj.
  • When the State has to, in the present times, cater to all the Non-COVID-19 patients also, as the private hospitals have been virtually non-functional then the State hospitals should have all the other required facilities, namely, the various machines, test facilities and the Doctors. The instructions reveal that apart from S.R.N. Hospital the other hospitals do not have ICCU.

Further the Bench added that to minimize the contagion State is also requested the following suggestions may also be incorporated in the its guidelines:

  • Authorities in the State of Uttar Pradesh may form a composite list of such persons who might be entering in the State of Uttar Pradesh after the lockdown was imposed – be they migrant labourers or anyone.
  • A responsible officer be appointed over every 400 such persons who might have come into the State of Uttar Pradesh after the lockdown was imposed.
  • All such officers shall:

-enquire about their well being

-Officers shall on daily basis enquire about the health of such persons.

-Make proper arrangement of food, in case the same is not available to them.

  • If by any chance anyone entering though the various Highways on personal vehicles has not been located and his/her name was not in the list and information is provided that such person/ or persons has or have entered in State of U.P. then the name of that person shall also be incorporated in the list of migrants.
  • If any unknown person is seen residing in neighbourhood then the State authorities shall be informed.
  • 15 days of quarantine for migrants.

Court states that whatever work is being done by State of Uttar Pradesh shall be done in a more organised manner.

To check whether a list has been prepared and whether a responsible officer has been made responsible for every four hundred migrants detailed instructions may be produced on the next date.

Matter listed on 18-05-2020. [Inhuman Condition at Quarantine Centres and for Providing Better Treatment to Corona Positive , In Re. v. State of U.P., 2020 SCC OnLine All 590 , decided on 14-05-2020]

Case BriefsCOVID 19High Courts

Delhi High Court: A Division Bench of D.N. Patel, CJ and C. Hari Shankar, J., addressed a grievance of petitioner was with regard to official website of GNCTD (Respondents) meant for registration of migrant workers for transit to their respective native place, no proper working of the helpline numbers and need of appointment of Nodal Officers in all the Districts of Delhi.

Counsel for GNCTD submitted that Principal Secretary of Social Welfare Department, P.K. Gupta is appointed as the State Nodal Officer and all the District Magistrates in Delhi are the Nodal Officers of their respective districts. Names and contact details have been given on the website of Government of NCT of Delhi.

Respondent 1 further submitted that they do no object to any of the prayers made in the present petition.

On the contrary, they are already looking into the difficulties which are being faced by the public at large and all possible actions are being taken by them to send the migrant workers to their native places.

Counsel for respondent 3/Railways submitted that as and when such request shall be received from any State, they will provide necessary trains.

Thus, in view of the above, Bench stated that respondent 1 is ready and willing to accept the registration of workers who want to migrate, as and when they would approach the nodal officers, it will be taken care of by GNCTD for their migration in accordance with the SOP issued by Union of India.

With regard to “helpline numbers”, respondent 1 is directed to ensure uninterrupted working of their helpline number so that people may approach Nodal officers.

“…very purpose of helpline number is to help the people and, therefore, the same must be functional.”

Further, the Court also stated that, Nodal Officers shall remain easily available to migrant workers so that after the online registration, follow up action in accordance to Centre issued SOP for movement of migrant workers to their native places could be taken place.

Petitions stands disposed of. [National Campaign Committee for Eradication of bonded labour v. GNCTD, 2020 SCC OnLine Del 595 , decided on 15-05-2020]

COVID 19Hot Off The PressNews

Ministry of Home Affairs issues order to extend the nationwide lockdown till 31st May, 2020.

Operative Portion of the NDMA Order:

“Considering the fact that the lockdown measures need to be implemented for a further period in the country to contain the spread of COVID 19, NDMA, in exercise of powers under Section 6(2)(i) of the Disaster Management Act, 2005, hereby directs the ministries/Departments of Government of India, State Governments and State Authorities to continue the lockdown measures upto 31st May, 2020. The Authority further directs NEC to issue modifications in the guidelines as necessary, keeping in view of the need to open up economic activities while containing the spread of COVID 19.”

List of Activities “NOT” allowed in Lockdown 4.0

  • Domestic and International Air travel of passengers, except for domestic medical services, domestic air ambulance and for security purposes or permitted by MHA.
  • Metro rail services.
  • School, Colleges, educational/training/coaching institutions etc. to remain closed. Online/Distance learning permitted.
  • Hospital, restaurants and other hospitality services, except those meant for housing/health/police/Government officials/healthcare workers/stranded persons including tourists and for quarantine facilities. Restaurants shall be permitted to operate kitchens for home delivery of food items.
  • All cinema halls, shopping malls, gymnasiums, swimming pools, entertainment parks, theatres, bars and auditoriums, assembly halls and similar places. Sports Complexes and stadia will be permitted to open; spectators not allowed.
  • All social/political/sports/entertainment/academic/cultural/religious functions/other gatherings and large congregations.
  • Religious Congregations strictly prohibited. Religious places/places of worship shall be closed for public.

Following activities shall be permitted with restrictions, except in the Containment Zones.

  • Inter-State movement of passenger vehicles and buses, with mutual consent of State/UTs involved.
  • Intra-State movement of passenger vehicles and buses, as decided by the States and UTs.
  • SOPs issued earlier to be continued.

National Directives for COVID-19 Management to be followed throughout the country.

Containment, Buffer, Red, Green and Orange Zone

  • Delineation of Red, Green and Orange Zone will be decided by respective State and UT’s.
  • Within the Red and orange Zones, Containment Zones and buffer Zones will be demarcated by District Authorities, after taking into consideration the MoHFW Guidelines.
  • Essential activities allowed in Containment Zones.
  • In Containment Zones: There shall be intensive contact tracing, house-to-house surveillance.

Night Curfew

Movement of individuals to remain strictly prohibited between 7 pm to 7 am, except for essential activities. Local Authorities shall issue orders such as prohibitory order under Section 144 of CrPC.

Persons above 65 years of age, persons with co-morbidities, pregnant women and children below age of 10 years shall stay at home, except for essential and health purposes.

States/UTs based on their assessment of situation may prohibit or impose restrictions as deemed fit.

With a view to ensuring safety in offices and work places, employers on best effort basis should ensure that Arogya Setu is installed by all employees having compatible mobile phones.

 

All States/UTs shall allow inter-State and intra-State movement of medical professionals, nurses and para medical staff, sanitation personnel and ambulances without any restriction.

All States/UTs shall allow inter-State movement of all types of goods/cargo, including empty trucks.

Dilution of the said guidelines by any State/UT not allowed.

National Directives for COVID 19 Management

  • Compulsory wearing of face cover in public and work places.
  • Spitting in public and work places punishable with fine.
  • Social distancing to be followed in public places and in public transport.
  • Marriage related gathering shall ensure social distancing and maximum number of guests not to be more than 50.
  • Funeral/last rites related gathering shall ensure social distancing and max. number allowed not to be more than 20.
  • Consumption of liquor, paan, gutka, tobacco etc. in public places not allowed.
  • Shops to ensure minimum six feet distance among customers and not more than 5 persons allowed in shops.

Additional Directives for Work Places

  • As far as possible, practice of work from home should be followed.
  • Staggering of work/business hours shall be followed in offices, work places, shops, markets and industrial and commercial establishments.
  • Provision of thermal scanning, hand wash and sanitizer to be made available at entry and exit points and common areas.
  • Frequent sanitization of entire workplace, common facilities and all points which come into human contact shall be ensured.
  • All persons in charge of work places shall ensure social distancing through adequate distance between workers, adequate gaps between shifts, staggering the lunch breaks of staff, etc.

Access the detailed guidelines issued by MHA, Here:

GUIDELINES


Ministry of Home Affairs

[Order dt. 17-05-2020]

COVID 19Hot Off The PressNews

Karnataka High Court alongwith all the District Judiciary, Family Courts, Labour Courts and Industrial Tribunals in the State shall be closed till 6th June, 2020 for the purpose of Section 4 of Limitation Act, 1963.

Access the Notification here:

NOTIFICATION 1

NOTIFICATION 2


Karnataka High Court

[Notification dt. 15-05-2020]

 

Case BriefsCOVID 19Supreme Court

Supreme Court: The 3-judge bench of L. Nageswara Rao, Sanjay Kishan Kaul and BR Gavai, JJ has issued notice in a number of petitions challenging clause (iii) of the Ministry of Home Affairs order dated March 29, 2020 directing the industries, shops and commercial establishments to pay full salary/wages to all its staff, workers, contract workers, casual workers during the period of lockdown. The notice is returnable next week.

The Court, granted interim relief in two of the petitions, namely, by Hand Tools Manufacturers Association and Indian Jute Mills Association [WP (Civil) Diary No(s). 11281/2020] and directed that “no coercive action shall be taken in the meantime”. However, no such relief was granted to other petitioners like Ficus Pax Private Limited [WP (CIVIL) Diary No(s). 10983/2020], Ludhiana Hand Tools Association [WP (Civil) Diary No(s). 10993/2020], Twin City Industrial Employers Association [WP(Civil) Diary No(s). 11018/2020], etc.

MHA Order dated 29.03.2020:

The said order issued after a large number of migrant workers had started marching towards their hometowns amidst Coronavirus Lockdown. It lays down directions for adequate arrangements of food and shelter for migrant workers. It also directs the landlords to not demand the payment of rent from migrant workers.

However, only Clause (iii) of the impugned MHA order is under challenge in the present batch of petitions. The said clause reads:

“All the employers, be it in the industry or in the shops and commercial establishments, shall make payment of wages of their workers, at their work places, on the due date, without any deduction, for the period their establishments are under closure during lockdown period.”

Hand Tools Manufacturers Association’s case

Hand Tools Manufacturers Association is an association formed and registered under Societies Registration Act, 1860 and as amended by Punjab Amendment Act, 1957. Petitioner comprises of around 52 members, which constitutes of sole proprietorship firms, partnership firms and private limited companies engaged in the manufacturing and distribution of the hand tools.

It has challenged the order on the ground of it being,

“illegal, violative of law, impossible to implement and have a cascading effect which may lead to winding up, closure or shut down of various industrial establishments, factories etc. rendering the workers, employees and other ancillary staff as unemployed.”

The petition also states,

“when hundreds of Crores of unclaimed provident fund and Employees State Insurance Corporation contribution lies in banks attracting interest and Government of India is enjoying benefit out it, Government of India completely erred in directing the private establishments to pay full wages, instead of using this contribution of the industry towards the welfare of workers/employees, and therefore, arbitrary and unreasonable.”

The Association, apart from seeking a direction to quash the impugned MHA order, has prayed before the Court that Section 10(2)(I) of the Disaster Management Act, 2005, in the event that the same are interpreted as conferring power on the Central Government, to direct private establishments to make full payments of wages to the employees during the lock-down period, be declared as illegal, arbitrary and violative of Articles 14, 19(1)(g), and 300A of the Constitution. It also sought a stay on the operations of the Impugned MHA order till the final disposal of the case before the Supreme Court.

[Hand Tools Manufacturers Association v. Union of India, WRIT PETITION (CIVIL) Diary No(s). 11193/2020, order dated 15.05.2020]


Click here to read the MHA order dated 29.03.2020

Hot Off The PressNews

On 13.05.2020, the Supreme Court notified that all the advocates to wear “plain white-shirt/white-salwar-kameez/ white saree, with a plainwhite neck band” during the hearings before the Supreme Court of India through Virtual Court System till medical exigencies exist or until further orders. The said decision was taken after considering the medical advice, as a precautionary measure to contain spread of Coronavirus (COVID-19) infection under the prevailing conditions.

Click here to read the Notification.

Case BriefsCOVID 19High Courts

Bombay High Court: Bharati Dangre, J., addressed a bail application of a 43 year old person who sought the same for reasons of spread COVID19 in Arthur Road Jail.

Senior Advocate A.H.H. Ponda for the applicant submitted that inmates and staff members have been tested positive in the jail.

He further added to his submission that, applicant is a chronic diabetic patient, hyper tension and high Blood Pressure along with sinus problem and according to studies, persons suffering from such chronic ailments is more susceptible to Corona Virus.

Bench noted that no doubt that the situation is precarious as more than 100 inmates of Arthur Road Jail have been found to have tested positive.

It is for the State Government and policy makers to take a decision in this regard.

Further if the above-stated figures are true, then it is for the authorities to arrange for their affairs and ensure that inmates housed in the jail are not infected by the virus on account of over crowding and need not be reminded of the Right of inmates of a safety and healthy environment as even while incarceration.

There is always a hope and expectation that the jail authorities are sensitive to the aforesaid situation and would take appropriate steps.

Thus, Court held that it is open for the State Government and Jail authorities to take appropriate policy decision to tackle the situation and since no imminent health impediment is reflected in the present application, it stands rejected. [Ali Akbar Shroff v. State of Maharashtra, 2020 SCC OnLine Bom 635 , decided on 08-05-2020]

COVID 19Legislation UpdatesNotifications

Section 6 of the Income-tax Act, 1961 (the Act) contains provisions relating to residency of a person. The status of an individual as to whether he is resident in India or a non-resident or not ordinarily resident, is dependent, inter-alia, on the period for which the person is in India during a year.

Various representations have been received stating that there are number of individuals who had come on a visit to India during the previous year 2019-20 for a particular duration and intended to leave India before the end of the previous year for maintaining their status as non-resident or not ordinary resident in India. However due to declaration of the lockdown and suspension of international flights owing to outbreak of Novel Corona Virus (COVID-19), they are required to prolong their stay in India. Concerns have been expressed that they may involuntarily end up becoming Indian residents without any intention to do so.

In order to avoid genuine hardship in such cases, the CBDT has decided vide circular no 11 dated May 8, 2020, that for the purposes of determining the residential status under section 6 of the Act during the previous year 2019-20 in respect of an individual who has come to India on a visit before 22nd March, 2020 and:

  • has been unable to leave India on or before 31st March 2020, his period of stay in India from 22nd March, 2020 to 31st March, 2020 shall not be taken into account; or
  • has been quarantined in India on account of Novel Corona Virus (Covid-19) on or after 1st March, 2020 and has departed on an evacuation flight on or before 31st March, 2020 or has been unable to leave India on or before 31st March, 2020, his period of stay from the beginning of his quarantine to his date of departure or 31st March, 2020, as the case may be, shall not be taken into account; or
  • has departed on an evacuation flight on or before 31st March, 2020, his period of stay in India from 22nd March, 2020 to his date of departure shall not be taken into account.

Further, as the lockdown continues during the Financial Year 2020-21 and it is not yet clear as to when international flight operations would resume, a circular excluding the period of stay of these individuals up to the date of normalisation of international flight operations, for determination of the residential status for the previous year 2020-21 shall be issued after the said normalisation.


Ministry of Finance

[Press Release dt. 09-05-2020]

[Source:PIB]

COVID 19Hot Off The PressNews

Uttar Pradesh Government promulgates ‘Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020’ to deal with the effects of Novel Coronavirus and revive the economic state.

As reported by media,

Only the Building and Other Construction Workers Act, 1996; Workmen Compensation Act, 1923; Bonded Labour System (Abolition) Act, 1976; and Section 5 of the Payment of Wages Act, 1936 (the right to receive timely wages), will apply in the state, according to the statement. It also said the provisions related to children and women in the labour laws would continue.

In view of the above all other labour laws in the State would be suspended with an exception to the above three stated.

Labour is a concurrent subject under the Constitution of India, the states can frame their own laws but they need the approval of the Centre.

As reported by Business Standard,

“…horticultural and economical activities in the states have been severely affected and slowed down due to the outbreak of Covid-19. This is because businesses and economic activities came to a halt more or less due to the national lockdown.”