1. The object of implementing Force Majure clause (FMC), (expressed in an agreement or contract), is not forbidden by law, neither it is of such nature that, if permitted, it would defeat the provision of any law, or is fraudulent or opposed to public policy. Hence FMC in any contract, expressed, is lawful. Hence Force Majure (FM) events include an act of God or natural disasters, strikes, epidemics, pandemics, etc. FM is an exception to what would otherwise amount to a breach of contract. Hence contracts with FMC come within the category of Contracts contingent on an event happening or not happening, and governed U/S 32 onwards, Chapter III, and Chapter IV of the Contract Act, 1872 (i.e. until S. 56 of the Contract Act, 1872). Hence from the said provisions it can be seen that FMC cannot be implied and must be expressly agreed upon under the contract executed.
2. What happens if FMC is not expressly agreed upon in the contract. If the contract does not include FMC, then the aggrieved party can claim relief U/S 56 of the Contract Act 1872, (Doctrine of Frustration), which deals with agreements to do impossible acts, and termed in itself as void. Allocation and assumption of risk is not simply a matter of express or implied provision but may also depend on less defined matters such as the contemplation of parties, and the application of doctrine can be a difficult one. In such circumstances, test of radically different is important and that the doctrine is not to be lightly invoked. Mere incidence of expenses or delay or onerousness is not sufficient, and that there has to be as it were a break in identity between contract as provided for and contemplated and its performance in the new circumstances. The said observations and ratio was laid down by the Hon’ble Apex Court in Energy Watchdog Vs CERC (2017) 14 SCC 80. Hence the said doctrine is applicable at 2 instances, when the object of a contract becomes impossible to execute or when any unforeseen event occurs which is beyond the control of the aggrieved or affected party. Thus the said doctrine plays vital roles in non fulfillment of performance of contracts.
3. It is submitted that the World Health Organisation (WHO) declared COVID 19 as a pandemic on 11/03/2020. Admittedly Lockdown was implemented by the Hon’ble Prime Minister from 23/03/2020, and extended from time to time, due to said pandemic Covid-19. From 01/06/2020 until 30/06/2020, fresh guidelines were issued by MHA. In Pune city the lock down had been withdrawn partially w.e. from 08/06/2020, except in containment zones. The Ministry of Health and Family Welfare advised that mass gatherings be avoided or possibly postponed till the disease is contained. Hence any sort of disruption in any supply chains, transportation, services, distribution of goods, due to spread of Corona Virus is covered under FMC, and the same may be invoked, wherever considered appropriate whether or not expressed in the contract. As a result in pursuance of lockdown, Limitations have been placed on the movement of men and material under the provisions of Disaster Management Act, 2005, and the respective State and UT Governments, from time to time, have severely affected the volume of vehicular traffic. In such situation, considering the extra ordinary events or circumstances, beyond human control, leading to delays in or non fulfillment of contractual obligations, and such period of contract during lockdown implemented which may have become unremunerative, and therefore it is at the discretion of the parties to the contract, thereby allowing flexibility, to invoke FMC following prescribed due procedure, and which may be decided based on the specific circumstances of the case, and taking into consideration the period.
4. It is now well settled that clause in the agreement even if expressed cannot override the law embodied in the Acts, governing such agreements. The Government has issued orders under the Disaster Management Act, 2005, (more specific U/S 69 of the said Act), and the said order shall prevail over any such agreements executed between the Board and Contractor, and although FMC is not expressed in the contract between the order issued by Government will prevail over the agreement. Thus the Government has issued an order U/S 69 of the DM Act, 2005, delegating its power U/S 10 of the said Act, to Secretary, Ministry of Health and Family Welfare, Government of India, to enhance the preparedness and containment of COVID 19 etc.
5. Hence in my considered opinion concession/waiver to the Contractor/Aggrieved Party specially when there is no express clause of waiver/force majure in the Agreement or contract, can be granted taking into consideration, other facts and circumstances.