On 22nd May 2020, Delhi High Court, passed a significant order broadly dealing with the issue of suspension of rent by tenants owing to “force majeure” conditions like COVID 19 situation.
Justice Pratibha M Singh, laid down the parameters to deal with the problem of rent during such conditions, while rejecting some Khan’s market plea seeking for the suspension of rent as they were not using the property due to lockdown. She stated that though they were not using but they also didn’t have the intention to vacate that shop.
The Judge said that the question related to whether the tenants would be allowed to waive off the rent due to lockdown is arising among various cases across the country. Though there are no set rules to deal with such cases, some broad classification can be kept under consideration, in order to determine the manner in which the issues should be dealt.
She added that only those contracts which have force majeure clause in them, providing for some sort of waiver or suspension of rent, will be applicable.
The order said that impossibility of performance, as provided under contract law, “would not apply to a lease agreement and other similarly situated contracts”
The High Court said in the absence of contract law or contractual obligations, Transfer of Property Act will govern the problem of tenants and leases. But lease would seek the protection under the TPA only when “there was complete destruction of the property, which is permanent in nature due to the force majeure event”
Since in the present case neither there was any agreement having force majeure clause nor complete destruction of the property hence the court said case will be dealt under Delhi Rent Control Act. Khan Market Tenants application was rejected as while seeking for suspension of rent they don’t intend to vacant the tenanted premises.
"While holding that suspension of rent is not permissible in these facts, some postponement or relaxation in the schedule of payment can be granted owing to the lockdown," the court said and directed that use and occupation charges of March 2020 should be paid on or before 30th May 2020 and charges of April and May should be paid before 25th June 2020.
