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Delhi HC rejects Khan Market tenant’s plea to waive rent due to lockdown, but defers payment

The court rejected the plea, filed on 12 May, on the ground that Covid lockdown can’t be a reason to invoke the force majeure clause.

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New Delhi: The lockdown imposed to curb the spread of the novel coronavirus cannot be a ground to invoke the “force majeure” clause for waiver or suspension of rent, the Delhi High Court has ruled.

The decision Thursday by a bench of Justice Pratibha M.Singh was given on an application filed by a tenant, Ramanand, on 12 May from Khan Market, New Delhi, in connection to a 2017 eviction case.

The petitioner wanted a suspension of his rent as he was unable to use the rented premises for commercial purposes due to the lockdown.

In some relief to the petitioner, however, the judge deferred the payment of rent. 

“The Covid-19 pandemic has had large-scale implications for human life. Contractual relationships and jural relationships between parties are severely affected due to the lockdown. The question as to whether the lockdown would entitle tenants to claim waiver or exemption from payment of rent or suspension of rent, is bound to arise in thousands of cases across the country,” the court said.

“Though there can be no standard rule that can be prescribed to address these cases, some broad parameters can be kept under consideration, in order to determine the manner in which the issues that arise can be resolved,” it said in its ruling.


Also read: From virtual benches to entry curbs — how SC and Delhi HC will work after lockdown


What is force majeure? 

‘Force Majeure’ is defined as an event neither anticipated in law nor controlled by nature. It includes both acts of nature (floods and hurricanes) and acts of people (riots, strikes and wars).

The doctrine of force majeure clause is governed by the Indian Contract Act, 1872, and is also recognised under the Transfer of Property Act.

The high court said for a tenant to invoke the clause there must be an explicit provision of force majeure in the contract where both the parties (tenant and the landlord) unanimously agree to the conditions under which it can be enforced.

The court said different contracts could be differently worded and could also be in the form of a contingency under Section 32 of the Indian Contract Act, which may allow the tenant to claim that the contract has become void and surrender the premises.

“However, if the tenant wishes to retain the premises and there is no clause giving any respite to the tenant, the rent or the monthly charges would be payable,” said the court. 

In this case, the contract did not contain the force majeure clause. But the petitioner’s lawyer said the government had declared the pandemic as a force majeure for GST agreements and the relief should be extended to his client too.

“We had asked the court to consider our plea for remission in view of the government declaration. We wanted a waiver of rent or suspension for the lockdown period,” advocate Rajeev Talwar told ThePrint.

The court, however, said: “Without going into the legality and validity of such executive orders, suffice it to say that the present case is not covered by any of these executive orders.”

Protection under Transfer of Property Act, which is usually applied in the absence of a specific contract between a lessor and lessee, was also denied to the tenant in this case. 

The court said the law can be invoked in circumstances where the property is rendered permanently unfit for use. This was not applicable in the case before it, the court said.

Rent payment deferred

While it dismissed the plea to suspend the rent, the court relaxed the schedule of the payment.

It noted how the tenancy dates back to February 1975 and the rent was enhanced from Rs 300 to Rs 3.5 lakh per month only in September 2017. This was after the tenant lost the eviction suit against which his appeal is still pending before the high court. 

The court directed the tenant to pay charges for March on or before 30 May, and for April and May by 25 June.


Also read: Fans, mosquito nets, pool testing — the plan to get Delhi courts working after lockdown


 

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