No Frustration Of Contract Due To Mere Commercial Hardships Caused By Pandemic held Kerala High Court: Suneesh K S Vs Travancore Devaswom Board & Ors

DATE OF JUDGMENT:
1st February 2022

JUDGES:
Justice Anil K. Narendran
Justice P.G. Ajithkumar

PARTIES:
Appellant/Petitioner: Suneesh K.S.
Respondent:

1. TRAVANCORE DEVASWOM BOARD
2. DEVASWOM COMMISSIONER
3. DEPUTY DEVASWOM COMMISSIONER
4. ASSISTANT DEVASWOM COMMISSIONER
5. ADMINISTRATIVE OFFICER, VALLIANKAVU DEVI TEMPLE.
6. SUNILKUMAR T.G.

SUBJECT

In the present case, a writ petition was filed in the High Court of Kerala seeking a writ of mandamus to direct the respondents to grant the remission in default of payment caused due to hardships of COVID-19.

OVERVIEW

1. The facts of the matter are such that the petitioner was the successful bidder in the auction conducted by the Travancore Devaswom Board (1st respondent) for the sale of 'pooja items' and 'flower garlands' inside Valliyamkavu Devi Temple, Mundakkayam, for the period starting from 01.04.2021 to 31.03.2022
2. The auction for the sale of pooja articles was confirmed for Rs.33,33,334/- and that for the sale of flower garlands was confirmed for Rs.4,44,444/- in the name of the petitioner. As per clause (6) of the tender agreement, the petitioner had to remit 50% of the amount on the date of the auction itself and the balance installments within the prescribed time limit, failing which the Board had the right to cancel the bid and to conduct re-auction.
3. The petitioner successfully remitted a sum of Rs.16,66,667/- in respect of the sale of pooja items and a further sum of Rs.2,22,222/-, in respect of the sale of flower garlands, towards 50% of the auction amount. However, the petitioner defaulted on the remaining payment.
4. The Counsel for the petitioner argued that according to the tender agreement, in the event of a pandemic or any other catastrophes or disasters, pursuant to which entry of devotees could be restricted or lockdown was imposed, the petitioner had to be granted deduction/remission from the payment.
5. The petitioner sought a writ of mandamus permitting him to remit the balance auction amount, as assessed by respondents 1 to 4, after redressing his grievances in respect of the sale of pooja items and flower garlands, in terms of the agreements entered into by the petitioner with the Travancore Devaswom Board, in five equal monthly installments, in view of the special circumstances due to Covid–19 pandemic restrictions imposed by the State

ISSUES

1. Whether petitioner can default the payment in the guise of hardships caused by COVID-19 despite contractual obligations?

JUDGMENT

1. Examining the contractual obligations, the High Court of Kerala referred to the judgment in the case of Suresan Nair T.S. and others v. Travancore Devaswom Board and others where it was held that once the grant of kuthaka (granted right to sell designated products) is informed and the person who received kuthaka remits the first installment of the kuthaka, he is bound to scrupulously follow the other conditions in the tender notification and execute the agreement within the stipulated time. Having not done the same, he cannot be permitted to take advantage of avoidance of that obligation and get the fruits of his refusal to honor the obligation.
2. The Court noticed that the occurrence of any commercial difficulty, hardship, or inconvenience in performance of the conditions of the agreement can provide no justification to the petitioner to wriggle out of the contractual obligations which he had accepted with open eyes.
3. The Court further noticed that according to clause (12) of the tender agreement, the Board has the right to proceed against the petitioner’s movable and immovable properties for recovering the loss, since the petitioner has defaulted payment of the balance auction amount, which has resulted in the Board sustaining a loss.

CONCLUSION

COVID-19 has affected businesses across the globe. Set schedules came to halt due to financial hardships caused by back-to-back lockdowns. The Courts have played a very important role in redefining contractual obligations in these tough times. The decision in the present case will serve as a benchmark for multiple cases dealing with the same subject matter.

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