This article is written by Vandana Shrivastava, a student of B.A. L.L.B.(Hons.) at the Institute of Law, Nirma University, Ahmedabad. This article highlights several issues that would arise due to the recent outbreak of the pandemic in India. Those issues belong to different forms of litigation. The issues and their respective laws have been discussed.
Determination of current and potential work is essential for survival in the legal profession. With temporary cancellation of Court proceedings, there are abundant cases to be taken up before the Courts after the resumption. A lockdown does not signify a pause on legal disputes. In fact, lawyers should utilise this time to identify emerging disputes so that those issues could be thoroughly researched beforehand.
These are hard times. Despite considerable efforts by the government of India, certain disputes are bound to arise, such is their nature. The placement of lockdown was inclusive of a sudden halt on all activities, which largely comprises the day-to-day lives of people. This article is an illustration of all possible disputes of legal action which could arise in India due to the pandemic of COVID-19 in the country.
Kinds of litigation that can arise out of disputes caused by COVID-19 crisis
Breach of contracts
Breach of a contract makes the party which has so breached the contract liable to pay compensation to the aggrieved party. A similar situation of breach of contract is becoming prevalent in India. Landlords across the country have been harassing their tenants who are engaged in medical and aviation services to evict their residencies.
Before renting out a property to someone, a written agreement has to be drafted and signed by the owner and tenant. The Acts associated with rental services, which differ from State to State have specified the sole grounds for the eviction of a tenant. The grounds include non-payment of rent, subletting the property to a third-person without the landlord’s permission, doing acts in the property or acting in a non-acceptable manner.
None of the grounds are breached by the medical and aviation staff. On the contrary, unwilling doctors are being forced to perform their duty or face suspension. Similarly, aviation staff was not allowed to take leave to avoid travel. They are required to be quarantined at home by the government, except when duty calls.
Additionally, a tenant who is using the property for residential purposes is also a consumer as per Section 2(1)(d) of the Consumer Protection Act, 1986. Any breach in the agreement or a disturbance to the tenants would be wrong against a consumer.
Frustration of Contract
Market operations had to be stopped within 4 hours of the announcement of the lockdown. Market trust is based on contracts. There are manufacture, sale, and delivery of goods under a contract. The lockdown was inapplicable only on essential services, which were decided by the government. Among all things, the order would’ve had a significantly adverse effect on the sale of perishable goods.
The frustration of a contract is based on the Doctrine of Frustration. The doctrine could be enforced in situations where performance of the object has become impossible due to an unforeseen event. Essentially, none of the parties to the contract have a fault in frustration of a contract. Force Majeure is covered under the doctrine. It exempts the parties to the contract from their liabilities and/or obligations when an unforeseeable or unavoidable event takes place. It includes events such as riots, strikes, epidemics and events like floods, tsunamis, earthquakes and volcanic eruptions that are covered under the Act of God.
Every non-performance of contracts, except for contracts concerned with essential services would be covered under Force Majeure, as long as the same can be proven before the Court.
The doctrine of Frustration is divided into specific categories, to help in the interpretation of the applicability of the doctrine in cases:
- Destruction of subject matter
- Death or Incapacity of party
- Subsequent Impossibility
- Government Intervention
Extension of Limitation
Before moving forward, it shall be noted that the Supreme Court was taking up Court proceedings via video conferences after the placement of lockdown. Proceedings were being conducted in subordinate Courts as well. Later, on realisation that most of the Courts do not have access to the same technology and continuation of physical proceedings would endanger the lives of many, the Court passed an order of discontinuation of all proceedings in all the Courts of the country and extension of the limitation period under all types of cases.
The Court has the special power to pass such orders under Article 141 of the Indian Constitution. The Limitation Act, 1963 allows suits, applications and appeals to be filed before the Courts till a specific period. The apex Court’s decision would be binding on all Courts under Article 142 of the Indian Constitution.
Hereafter, all the disputes discussed under this article fall under the ambit of the Limitation Act and would be bound by the Supreme Court’s order on the extension of the limitation period.
- Health/Mediclaim and Life Insurance: The patient count of the novel coronavirus is rising in India every day. Many of those patients have health insurances or mediclaim policies. If a person who has any of these insurances is diagnosed with COVID-19, claiming insurance would not be easy.
Commonly, insurance companies give a detailed account of the types of diseases which will be covered under insurance claims. COVID-19 is new, and there could not be a special category for the virus in insurance premiums. Therefore, insurance companies will make attempts to pull the novel virus out of any of their insurance categories, to avoid indemnity. The same will cause disputes.
- Corporate Insurance: The lockdown led to a sudden stop of all market activity. For unforeseen or inevitable situations where there is a loss of profit, Corporations take insurance of material damage and business interruption. In case of any of these, the Corporations could claim insurance. However, material damage is only inclusive of loss by fire or flood or any pre-decided cause. Business interruption can be claimed solely when there is material damage. Identification of enforceability of Corporate Insurance could cause disputes between the parties.
- Employee Insurance: COVID-19 and lockdown are causing losses to the business. As a repercussion, many jobs would be lost to recover from losses. If an employee loses their job without their fault, they are entitled to claim “unemployment cash benefit policy” under Employees’ State Insurance (ESI). While the entire purpose of establishing ESI is to provide support to employees, a situation could arise where an employee would have to provide evidentiary support to prove that they became unemployed due to the pandemic and there was no fault on their part.
- Marine Insurance: Due to the imposition of travel ban amidst the outbreak of pandemic in India, a heavy amount of cargo has been left unattended at various ports. The Marine Insurance Act of 1963 governs marine insurance claims.
Because all ports across the nation are in the same, stagnant position, several disputes on the payment of insurance claims will arise. Cases concerned with insurance are governed under the Insurance Act, 1938.
Commercial disputes are governed under the Commercial Courts Act, 2015. The major disputes in the sector would be concerned with frustration of contracts and would distortion of joint ventures. Joint ventures are entered into for a specific period of time or for a specific reason. The lockdown would affect the dates of ventures and develop complexity. All those cases which have a limitation period of 3 years would be a part of the extension of the limitation period.
All disputes relating to the Arbitration and Conciliation Act, 1996 would also be taken up after the lockdown is lifted. Appeals and challenges arising out of Section 34 of the Arbitration Act for a part of the same.
- Negligence: The Government has imposed a lockdown to curb the spread of the pandemic. Due to negligent acts of several people, the rate of people diagnosed with COVID-19 is rising. Performing a negligent act that endangers the lives of other person(s) by posing a risk of a disease is a punishable offense under Section 269 of the Indian Penal Code, 1860 (IPC).
- Disobedience to Quarantine: Prior to the placement of lockdown, the government had ordered all the people arriving from foreign countries to stay under quarantine for a period extending to 14 days. People who disobeyed the order spread the virus to other people. Their carelessness has contributed to the rise in patients. Section 3 of the Epidemic Diseases Act, 1897 has criminalised the act of disobeying the orders of government amidst an epidemic under Section 188 of the Indian Penal Code, 1860.
- Adulteration of Drugs: People have been advised to clean their hands frequently. Given the large population of India, there are not enough sanitisers and disinfectants for all people. Cases of manufacture and sale of adulterated sanitisers, handwashes, and fake drugs, claiming to be a cure for COVID-19 have been exposed. Such acts are crimes under Section 274 and Section 275 of the IPC. Manufacture of drugs and selling them on a false claim of being a cure for COVID-19 would amount to the offense of cheating as defined under Section 415 of the IPC.
- Domestic Violence: Patriarchy is still prevalent in parts of the country. Victims of abuse and violence would be staying with their abusers right now. After the lockdown is lifted, they might break free and file complaints against the same. Section 498A of the IPC criminalises the act of cruelty, which is associated with domestic violence.
- Medical Negligence/Malpractices: People could be wrongly diagnosed with COVID-19 and be treated for the same. If the patient count goes too high, doctors might overwork themselves and act negligently. Also, if hygiene is not maintained by a doctor or medical staff, they could infect innocent people with COVID-19. For foregoing reasons, there is a probability of such cases coming into light very soon. This act will arise liability under Section 304A of the IPC and a consumer complaint under Consumer Protection Act, 1986.
- Right to Life: The State has ordered all people to stay indoors, except to buy essential items. Police posts are established in every region to ensure that no one goes out unless it is urgent. Article 21 of the Indian Constitution states that every person has a right to live peacefully unless there is a reasonable restriction.
Several instances of police brutality have been exposed. Policemen have hit civilians without asking their reason behind coming out on the streets. Such action by the Police is unreasonable and is equivalent to the crime of battery.
- Right to Privacy: False lists of people diagnosed with COVID-19 are being circulated nationwide. Those lists consist of original details of people who are not diagnosed with the virus in reality. Spreading such information without the consent of subjects of information is a violation of the Right to Privacy under Article 21 of the Indian Constitution.
All such acts which amount to interference in another person’s life would be an unconstitutional act.
- Racial Discrimination: People from the North-Eastern parts of India are facing racism in the country. They are harassed by people who allege that they are of Chinese origin and are responsible for the outbreak of the pandemic in the country. Such acts infringe Article 15 of the Indian Constitution which states that there could not be any discrimination on the basis of race.
The world does not witness a pandemic frequently. In the process of doing right, there would be many wrongs. Such wrongs need to be rectified and made just by the application of the law. Law is very broad and people specialize in different laws. There persists an urgent need of combined efforts from all the people involved in the profession to interpret the law in a manner that is most suitable for all.
There are several technical or uncommon forms of disputes which are yet to happen. The current article is an eye-opener to make lawyers realise that there is a need to stay updated with all incidents around the world. It will help in combating potential problems that would arise as a consequence of COVID-19.
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