Case: Court on its own Motion v. State of NCT of Delhi and Ors.

Introduction:

The writ petition has been taken up by the Delhi HC on its own motion for intervention in regards of the State’s handling of the COVID-19 pandemic. The bench Comprises of Hon’ble The Chief Justice Hon’ble and Mr. Justice Prateek Jalan.

Facts:

Learned Amicus Curiae has, in his report, pointed out to this court that the mobile application namely “Delhi Corona Mobile Application” by the Delhi Govt. is not being updated regularly. That there was a mismatch of data and facts provided by the Govt. and Pvt. Hospitals especially regarding the availability of beds and ventilators. It is also submitted that some of the hospitals run by the Central Government/Government of NCT of Delhi is not updating the data. It is further submitted that helpline numbers as provided by Govt. of NCT of Delhi, are not properly working.

It is further submitted by the learned Amicus Curiae that real-time updation of data should be done by the hospitals or data should at least be updated every 8 hours. He also submitted that there should be no denial in testing and asymptomatic patients should also be tested for Covid-19 immediately.

Learned Standing Counsel appearing for the Government of NCT of Delhi filed an affidavit in which it pointed out various steps initiated by the Govt. Of NCT of Delhi:

• A Centralized toll-free helpline number 1031 has been developed by merging all the helplines, which provide seven types of services.

• That the Standard Operating Procedure has also been evolved for receiving calls and effectively responding to the callers.

• That a special helpline number dedicated only to the Corona positive patients/cases have recently been initiated.

• Four Grievance Officers have been appointed for redressal of complaints regarding availability of the ambulance, hospital, beds and ventilators, etc.

Holding:

The court having heard the Amicus Curiae and the counsels for respondents/intervener and held that there was a need of a real-time update of the data by all hospitals including the Delhi Government-run hospitals, the Central Government-run hospitals and private hospitals. The court hence directed the Govt. of NCT of Delhi as well as Central Govt. that they shall take all necessary steps for ensuring real-time update of the data, without too much of a time lag, so that the information being received by the public is current. The court also directed the Central Govt. that testing will be carried out by the central govt. as well as the state government prioritizing persons approaching with a doctor’s recommendation. The court listed the matter on 25/06/2020.

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Covid-19 has had a drastic impact on the legal sector of every country. In the wake of this pandemic, it becomes highly essential to modify the laws to suit the changes brought in by Covid-19. Huge number of pendency of cases, loss of livelihood, frustration/non-performance of contracts, cancellation of projects, unprecedented unemployment etc are few of the consequences of this pandemic. This article provides an analysis of the impact on few sectors of the law.

Role of technology:

Due to the outbreak of Covid-19, On 6^th April 2020, a notification was passed by the Supreme Court setting out guidelines for the conduct of court proceedings virtually on important/urgent matters and subsequently various states passed necessary notifications abiding by the virtual court proceedings as directed by the Supreme Court. This situation has forced the Indian Courts to gradually make a paradigm shift from the traditional courts to the virtual mode of court proceedings. The guidelines passed by the Supreme Court includes awareness of access to technology, technology upgradation to facilitate the proceedings, participation of common people along with the parties involved. With the modifications made in the technology due consideration has also been given to protect the digital platforms from hacking, cybercrimes etc.

As the courts are only hearing important/urgent matters, limitation period in all the cases have been extended until any further notice by the Supreme Court. Due to the present circumstances, it will be hard for the litigation sector to recover from the quantity of delayed cases in the future as India already has a huge backlog of pending cases.

Mergers & Acquisitions:

The Covid-19 crisis has affected M&A transactions deeply. They are seeing a tough time in honouring agreements or putting them on hold. Cross- border transactions have also been severely affected. In this context, it is likely to review the material adverse effect (MAE) clauses in respect of transactions relating to mergers and acquisitions. The scope of MAE clauses is different according to the different type of transactions. MAE/MAC clauses typically state that any event, occurrence, fact, condition, change, development that had reasonable material adverse effect either individually or in  aggregate, on the target company’s position affecting it financially, its assets, liabilities, intellectual property etc. Also, there is an inability to continue or honour present business agreements due to the material effect. Taking this as a defence many transactions will be put on hold by the party facilitating the merger or acquisition. Steps will be taken by the appropriate authorities governing the acquisition or merger by taking up cases through virtual means, getting approval from the board through remote e-voting etc. Considering that parties will not be able to fulfil all the formalities certain closing down requirements have to be relaxed. Therefore, it is important that necessary updates are maintained by the parties and the appropriate authorities of the impact of Covid-19 on their noted transactions and the market conditions respectively.

Competition Law:

In the wake of Covid-19 pandemic it becomes essential to analyse the market in terms of the provisions of Competition law. To analyse the impact of Covid-19 it is important to consider the concept of coordinated behaviour between the suppliers/competitors. The competitors may collaborate for legitimate reasons to fulfil the demand of the people. As lockdown was imposed for a period of 60 days and all the sectors were closed except outlets for essential commodities. It was seen that many few geographical areas were over-stocked while on the contrast few geographical areas faced shortage of supplies. However, in the interest of uninterrupted supply and access to consumers, coordinated behaviour though illegal per se under Competition law is essential during such emergency. Various countries have relaxed provisions under Competition law in order to facilitate proper distribution and meet demand effectively. The Australian Competition and Consumer Commission (ACCC) has granted temporary leave/permission to retailers to share data, stock/supplies in order to meet demand. The Federal Trade Commission and the U.S. Department of Justice Antitrust Division have issued guidelines facilitating collaborations in order to ensure health and safety of its citizens. The Indian Government has so far not passed any exemptions with respect to the application of Competition law. Such an exemption for an interim period will allow the competitors to collaborate for the purpose of meeting demand in respect of essential commodities, medical supplies, R&D to develop vaccines etc. It is also pertinent to note that such relaxations can lead to exploitation in the form of dominating practices, cartelisation etc. A great initiative that was taken up the Indian Government was by covering masks, sanitisers under the ambit of essential commodities and putting a cap on the maximum price. Therefore, strict set of guidelines, thresholds are to be set in order to regulate the market dynamics effectively.

Indian Contract & the Force Majeure clause:

The principle w.r.t Force Majeure clause is that the party who has an obligation to perform the contract is given exemption due to the occurrence of any event it is no longer under the control of the party and relives the party from performing it. It has an obligation to prove that it took all the reasonable steps to honour the commitment of the contract. Due to the impact of Covid-19 globally, commercial contracts through out the world has disrupted. Therefore, parties are taking the defence of FMC clause. The Ministry of Finance, Government of India clarified with respect to ‘Manual for Procurement of Goods, 2017’, and stated that due to the disruption of supply chain because of the spread of Covid-19 such a scenario will be covered under FMC clause and the doctrine of Force Majeure can be invoked in the bonafide interest. Similarly, the Ministry of New & Renewable Energy with respect to ‘solar project developers’ declared that contractual obligations disrupted due to Covid-19 will be covered under Force Majeure clause in order to provide financial security. 

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