New Delhi, May 22 :
In a significant decision, the Delhi High Court has laid down broad parameters for dealing with the issue of suspension of payment of rent by tenants owing to ‘force majeure’ conditions like the COVID-19 lockdown crisis.
Justice Prathiba M Singh, laid down the parameters, while rejecting some Khan Market tenants’ plea seeking suspension of rent payment as they were unable to use the premises due to the COVID-19 pandemic, saying they were not willing to vacate the shop despite an eviction order against them.
“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.
“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.” the judge said.
Laying down the parameters, Justice Singh said where there are agreements between a landlord and tenant which contain a ‘force majeure’ clause, providing for some sort of waiver or suspension of rent, only then the tenant could claim the same.
“The force majeure clause in the contract could also be a contingency under the 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,” the high court said.
Justice Singh said ‘force majeure’ is defined by Black’s Law Dictionary as “an event or effect that can be neither anticipated nor controlled” and according to a normal dictionary, “The term includes both acts of nature (e.g. floods and hurricanes) and acts of people (e.g. riots, strikes and wars)”.
The order said that impossibility of performance, as provided under the Contract law, “would not apply to a lease agreement and other similarly situated contracts”.
The high court said in the absence of contracts or contractual stipulations the provisions of the Transfer of Property Act, 1882 (TPA) would govern tenancies and leases and for a lessee to seek protection under the TPA, “there has to be complete destruction of the property, which is permanent in nature due to the force majeure event”.
