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This article has been written by Preeti Bhandari, pursuing the Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from LawSikho.


Covid -19 was declared a pandemic by the World Health Organization (WHO) which continues impacting the world. Its devastating impact continues to unleash on lives and all the world and has as well impacted business and commerce. Different countries and governments took various measures to control the spread of the virus and the major one being declaring lockdown and restricting movement between the states and the countries.

India went into lockdown on March 24, 2020 and all the activities were put to a standstill. Businesses and trade have been impacted and the parties are revisiting their obligations under the contracts. Government and the various regulatory organizations took various measures with the objective of providing relief to the people and ensured that negative impact is mitigated as far as possible in the minds of the people. The administration was imposing measures to control the spread of the virus on one hand while on the other hand the judiciary also insured that the litigants are not put to hardships due to lockdown.

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Guidelines issued   

The guidelines issued by the government ensured no coercive action is taken against the parties if they are unable to perform their part of the obligations caused due to COVID-19

We in India though have not made any action to alleviate the consequences that the Covid-19 pandemic has brought to people, businesses and trade, However, for the same the government and different regulatory organizations introduced guidelines and orders to this effect. The guidelines and orders have been issued keeping in mind the following:

  1. a) To provide temporary relief to parties for failure to perform their part of the contract.
  2. b) To extend the timelines to fulfil their obligations.

Category of Scheduled Contracts

Insolvency and Bankruptcy Code, 2016 (IBC) and reliefs: To mitigate the impact of COVID 19 Central Government introduced some changes in the IBC and its processes which are as follows:

  1. Threshold limit increased to 1 crore: The Central government raised the threshold for invoking insolvency to Rs. 1 crore from existing Rs, 1 lakh. This step is taken mainly to prevent micro, small and medium enterprises (MSMEs) which are facing hardships due to COVID-19 and the lockdown.
  2. Corporate Insolvency Resolution Process suspension: The process of corporate insolvency resolution process has been suspended for a year to safeguard the companies from potential disturbances from financial creditors.
  3. Exclusion of COVID-19 related debt from the purview of default.

Court Proceedings

Apex Court of India taking suo motu cognizance of the problems of the litigants extended the period of limitation of all the proceedings at all courts/ tribunals across the country including itself with effect from March 15th, 2020.  The order further mentioned that the extension of limitation would be irrespective of the limitation prescribed under the general law. 

The Supreme Court further extended the limitation periods applicable to proceedings under the Arbitration & Conciliation Act, 1996 and the Negotiable Instruments Act, 1881, thus making the extension comprehensive vide its order dated May, 06, 2020.

The Supreme Court also issued directions to have the hearing through video conferencing.

Lease Agreements 

Ministry of Home Affairs (MHA), Government of India exercising its powers under Section 10(2)(I) of the Disaster Management Act, issued order dated 29th March, 2020 for directing state government and union territory to implement measures to ensure the following:

  1. that landlords do not demand one month rent from the workers, including migrants and students living in rented accommodation.
  2. that landlord not complying with the above direction and forcing students and workers to vacate the rented accommodation will be liable for action under the act.

The order gave powers to the District Magistrate / Deputy Commissioner and Senior Superintendent of Police / Superintendent of Police / Deputy Commissioner of Police and made them responsible for the implementation of the said guidelines in the order.

Construction Contracts 

The Ministry of Housing and Urban Affairs issued an advisory dated May 28th, 2020 to extend the dates of all approvals, NOCs, certificates required to commence a project or to construct a real estate project for a period of 9 months. Keeping in terms of the same various states extended the timelines as per the circulars and notifications issued by them from time to time from six months to one year, as the case may be. It was applicable for all those projects whose validity has expired on or after 25th March, 2020. The advisory further directed the states to issue directives so that various approvals, payments of charges and compliances may be rescheduled without any requirement of individual application form from building proponent in this regard.

Regulatory Compliances- Government extended the deadlines for regulatory compliances and tax payments in order to provide relief to individuals, companies, firms.

Direct Taxes- Central Board of Direct Taxes extended the due date of tax filing to November 30, 2020 which was further extended to December 31, 2020 vide   notification dated October 29, 2020 for individual tax-payers and till January 31, 2020, for taxpayers whose accounts are subject to tax audit. 

Various other measures like an extension of the deadline of linking aadhar and PAN to March 31, 2021. Extension for assessments getting barred to March 31, 2021, and September 30, 2021, relaxation in determining the residential status of individuals due to restriction to fly back were some other measures introduced by CBDT.

Indirect taxes- Central Board of Indirect taxes and Customs announced a series of steps to provide the relief like extension in the filing of monthly as well as annual GST return, waiver of interest or charging of interest at a lesser day, extending the validity of e-way bills.

Compliances under Companies Act, 2013 and Limited Partnership Act, 2008 

Ministry of Corporate Affairs (MCA) introduced the following measures to help companies and firms during the COVID times:

  1. No additional fees for late filing during the moratorium period from 1st April to 30th September 2020 in respect of any document, return, statement etc irrespective of its due date.
  2. One- time relaxation of the gap between two consecutive meetings 
  3. Deferment of the Companies (Auditor’s Report) Order, 2020 for the financial year 2020-2021.
  4. Relaxation of compulsory holding of a meeting of independent directors without the attendance of non-independent directors and members of the management.
  5. Extension of time limits of various compliances 

EMI Moratorium by RBI

The Reserve Bank of India (RBI) with the objective of providing relief to borrowers during the lockdown had announced a moratorium on term loan EMIs for three months starting from March 1, 2020, till May 31, 2020. RBI further extended the moratorium by another three months i.e till August 31, 2020. 

The Supreme Court as well in a hearing on the extension of relief to the borrowers directed the banks not to classify loans as non-performing assets if the loans were a standard loan and were not overdue for more than 30 days as on March 1, 2020.

The Central Government as well keeping in terms of the guidelines issued by the Apex Court gave interest waiver on loans of upto Rs. Two Crores under the RBI moratorium scheme.

Global measures

Singapore Government with the objective of controlling the impact of COVID -19 introduced COVID-19 (Temporary Measures) Act, 2020. These measures suspended certain contractual obligations or prevented initiation of legal proceedings. provides temporary relief from actions for inability to perform certain contracts listed in the schedule, which includes a contract for the grant of a loan facility by bank or finance company, a hire-purchase agreement, where the goods hired or conditionally sold under the agreement is any plant, machinery or a fixed asset located in Singapore, where such plant, machinery or fixed asset is used for manufacturing, production or other business purposes or a commercial vehicle.

The Governor of the State of New York by way of an Executive Order No. 202.9[6], has declared the continuation of temporary suspension and modification of laws relating to the disaster emergency. The relevant extract of the Executive Order is as follows:

“Subdivision two of Section 39 of the Banking Law is hereby modified to provide that it shall be deemed an unsafe and unsound business practice if, in response to the COVID-19 pandemic, any bank which is subject to the jurisdiction of the Department shall not grant forbearance to any person or business who has a financial hardship as a result of the COVID-19 pandemic for a period of ninety days.

The Superintendent of the Department of Financial Services shall ensure under reasonable and prudent circumstances that any licensed or regulated entities provide to any consumer in the State of New York an opportunity for a forbearance of payments for a mortgage for any person or entity facing  financial hardship due to the COVID-19 pandemic. The Superintendent shall promulgate emergency regulations to require that the application for such forbearance be made widely available for consumers, and such application shall be granted in all reasonable and prudent circumstances solely for the period of such emergency.”


The above steps are taken to provide relief to businesses and individuals which are affected by the outbreak of COVID -19 and to help the economy revive. The steps are measures to help people to use the relief period to work upon their obligations and avoid disputes.


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