One of the pertinent issues landlords and tenants in India are facing is the suspension of monthly rentals due to the COVID-19 lockdown. Delhi High Court in the case of Ramanand and Others v. Dr. Girish Soni, has held that the period of lockdown does not excuse the payment of rental amounts.The Delhi high Court clarified that the lockdown period where the premises cannot be used is no reason to suspend rental amount.
FACTS OF THE CASE:
- The tenant occupied a commercial property and there was an eviction petition filed by the landlord before the rental control authority, under the Delhi Rental Control Act, 1958.
- The court stayed the operation of eviction and subjected deposit of an enhanced rent of Rs. 3.5 lakhs per month against the amount of Rs. 300 per month which was paid earlier.
- The tenant approached the court seeking a suspension of the rental payment due to lockdown and force majeure was contended.
RULING:
- The court examined the provisions of the Contract Act and the Transfer of Property Act and specified the situations where a contract contains a force majeure clause and provides for actions to be taken pursuant to it.
- The court observed that in contract cases the relationship between the parties is governed by the terms of the contract and if it contains Force Majeure clause, then it will be the basis of determining the obligations of the parties.
- The court relied on the judgment of Supreme Court in Energy Watchdog v. CERC and ors. where it was said that if the contract contains a Force Majeure clause then it will be examined under Section 32 of the Indian Contract Act.
- Section 32 provides for enforcement of contingent contracts which become impossible to perform due to happening of an event.
- The court stated that a tenant can claim a waiver or suspension only if the contract contains a force majeure clause.
