Lease agreement
Querist :
Anonymous
(Querist) 18 August 2020
This query is : Resolved
Company office operating from lease premise. Post COVID-19 Company employee’s are working from home. We are not using premise and paying rent for vacant premise
We were having 6 month notice period as per agreement.we have given termination of lease in 1st Jul 20 and asked for waiver of 3 months under current scenario and mentioning force Majeure
In our lease agreement we have “force majeure” to terminate the lease but silent on notice period. Force Majeure include epidemic and act of God
Now as per notice period Lease will be come to end on 31st Dec 20 but we want to terminate it before that enforcing “Force Majeure” clause in agreement
can we terminate lease early before 6 month as still business it affected due to pandemic and plan handling over formality
Dr J C Vashista
(Expert) 19 August 2020
Terms and conditions as agreed between lessor and lessee shall prevail. Show the L & L document to a local lawyer for appreciation and professional guidance.
Dr J C Vashista
(Expert) 19 August 2020
Waiver of 3 months period can not be claimed as a matter of right, which may or may not be agreed by lessor.
Shilesh Patel
(Expert) 19 August 2020
You have done a complete work from your side giving a termination notice but now it depends upon the lessor, will he waive his rights of the contract or go with the contract.
Advocate Bhartesh goyal
(Expert) 19 August 2020
You are abide by terms and conditions of lease agreement.You can not terminate lease as per your own.If you want to vacate leased premises before expiry of its period,you have to pay lease money up to 31st December 2020.
Querist :
Anonymous
(Querist) 19 August 2020
Dear sirs
We have Force Majeure Clause in our Lease agreement which includes epidemic pandemic
Can we enforce that And terminate the lease
Rajendra K Goyal
(Expert) 19 August 2020
In Satyabrata Ghosh v. Mugneeram Bangur to Energy Watchdog v. CERC, the Supreme Court has held that when a force majeure event is relatable to a clause (express or implied) in a contract, it is governed by Section 32 of the Act whereas if a force majeure event occurs dehors the contract, Section 56 of the Act applies.
Law on force majeure is embodied under sections 32 and 56 of the Indian Contract Act, 1872 (“Contract Act”).
Section 32 of the Contract Act provides that ‘contingent contracts to do or not to do anything if an uncertain future event happens, cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such contracts become void.
’Section 56 of the Contract Act enshrines the ‘doctrine of impossibility’, which provides that ‘a contract to do an act which, after the contract is made, becomes impossible or unlawful or, by reason of some event which the promisor could not prevent, becomes void when the act becomes impossible or unlawful.’
Supreme Court in The Divisional Controller, KSRTC v. Mahadava Shetty, which holds that the expression ‘Act of God’ signifies the operation of natural forces free from human intervention with the caveat that every unexpected natural event does not operate as an excuse from liability if there is a reasonable possibility of anticipating their happening.
Rajendra K Goyal
(Expert) 19 August 2020
Not aware of any judgement force majeure applicability in COVID-19 situation..
The premises is vacate from your side, you can vacate the same by using force majeure clause.
Look into practical side, there is calculated risk, if you do not use this clause, you have to pay rent for vacated premises for rest of the notice period. Worst situation is that the other party wins in court, you may have to pay rent for notice period, which you have already issued.
Dr J C Vashista
(Expert) 19 August 2020
Delhi High Court has recently dismissed the petition of a tenant (Dentist in Khan Market) and held
“It is accordingly directed that the Tenants shall now pay the use and occupation charges for the month of March, 2020 on or before 30th May 2020 and for the months of April, 2020 and May, 2020 by 25th June, 2020. From June 2020 onwards, the payment shall be strictly as per the interim order dated 25th September 2017. Subject to these payments being made, the interim order already granted shall continue. If there is any default in payment, the interim order dated 25th September, 2017 would be operational. The said interim order is very clear i.e., if there is any non-payment, the decree would be liable to be executed.”
LEGALS REMARKS
The said judgment has brought out a different approach while dealing with the issues between tenants and landlords during the unforeseen situation like the current one. The Court emphasizes on the important of referring the agreements and contracts before resorting to the remedies available under the contract.
Laying down the factors to be considered would prove remarkable and would have put to rest many ongoing disputes on contractual obligations during the COVID – 19 times.
Therefore, the Court while considering the provisions of the Transfer of Property Act, 1882 rightly observed;
“In view of the above settled legal position, temporary non-use of premises due to the lockdown which was announced due to the COVID-19 outbreak cannot be construed as rendering the lease void under Section 108(B)(e) of the TPA. The tenant cannot also avoid payment of rent in view of Section 108(B)(l).”
Querist :
Anonymous
(Querist) 19 August 2020
Thank you all for guidance
Will Continue with the termination by convenience which is 6 month notice period
