“Tenants Cannot Claim Force Suspension of Rent Invoking Force Majeure Clause”, Analysing Delhi High Court’s Stance On Tenancy

Must Read

India’s International ‘Retrospective Taxation’ Regime Vis-a-Vis PCA Rulings in Vodafone and Cairn in 2020

The imposition of retrospective taxation of foreign companies doing business in India has been at the helm of controversy...

What is the Real Estate (Regulation and Development) Act, 2016?

The Real Estate (Regulation and Development) Act, 2016 (“RERA”) is an Act of the Parliament. It seeks to protect...

Should the Exorbitant Amounts Charged for RT-PCR Tests be Refunded?

Introduction A plea has been filed in the Honourable Supreme Court of India seeking a refund of exorbitant amounts charged...

Should CCTV’s be Installed in the Police Station?

Introduction In a recent judgment, the bench led by Justice Nariman issued directions to both the state and Union Territory...

A Legal Analysis of the West Bengal Political Crisis on IPS Deputation

The Ministry of Home Affairs (MHA) has recently summoned three IPS officers of West Bengal (WB). The decision was...

Explained: Postal Ballot for NRIs

At the end of November 2020, Election Commission sent a proposal to the law ministry to amend the Representation...

Follow us

The Delhi High court gave a very crucial judgment on May 21.2020. It stated that: “the tenants cannot claim force suspension of rent invoking force majeure clause owing to the lockdown. This is while occupying the rented premises.”

But, the single Bench of Justice Prathiba M Singh provided some relaxation. She did this considering the lockdown. She granted them some postponement in their rent payment schedule.

This order was a response to an application that raises issues about the suspension of rent. Many tenants seek suspension considering the COVID-19 lockdown. It raises diverse other legal questions on the issue as well.

Facts of the Case

The tenant has a shoe store called “Baluja” at one of Asia’s most elite streets Delhi’s Khan Market. The shop was on a commercial lease since 1975 for a paltry sum INR 300 per month from the landlord. The tenant under the Delhi Rent control law got evicted in 2017. Here, the tenant before the Delhi High Court challenged the eviction.

The Delhi High Court passed an interim order staying the eviction order. Meanwhile, it also directed the tenant to pay INR 3.5 lakhs. In this application, the tenant claimed for suspension of rent due to the lockdown.

Legal Analysis

The Court categorized the varied tenancy forms into two:

1. those with the presence of the force majeure clause.
2. those without the presence of the force majeure clause. The fundamental principle was that in the former category if force majeure clause implies then, the tenants could seek waiver or non- payment of the monthly rent.

The tenant sometimes may claim that the rental contract has become void. They then have to surrender the rented property. Considering this the Court stated that if “the tenant wishes to retain the premises, then in such case rent would be payable, and the contract could not be claimed to be void.”

The latter category could imply the Doctrine of frustration or impossibility of contract. The Court distinguished between executed and executory contracts. The Court held that the Doctrine of frustration did not apply to executed contracts. These refer to rental or lease agreements even though they involve monthly rent.

But, the Court stated that the tenant can avoid the lease under transfer of property law. This is only in cases of lack of contract or contractual obligations. There must also be complete destruction of property for this to apply. The permanent nature destruction caused should be due to the force majeure event. It stated that temporary abandonment of rental premises does not absolve the tenant from payment.

The most important decision of Court among all being a tenant can seek suspension of rent in cases of temporary abandonment of rental premises if not abided by any contract or contractual stipulation.

Exceptions Provided By The Court

The COVID-19 has had a great impact on various contracts. Considering this, the Court has contemplated some exceptions for some uncommon rental agreements. If a property provided on rent is attached to sales turnover, then the Court stated that: “The tenants would be entitled to seek waiver or suspension of rent strictly in terms of the contract itself”. The Court clarified that this is more related to sales or profits than the force
majeure clause.

In the above stated Baluja store case, the tenants were not abided by a written contract. Thus, they did not fall under the first tenancy category. The tenancy second form was also not considered as it is under the Delhi Rent Control Law. The tenants also did not file any plea of permanent destruction of property. Thus the avoidance of lease in cases of lack of a contract is also not considerable.

The Court also considered many factors to upfront justice, which includes:

1. rental properties nature,
2. rent amount,
3. financial or social status of the parties involved,
4. contractual obligations and
5. other factors.

Contemplating on the tenant’s intent to remain at the property, the Court rejected the rent suspension. But, because of the lockdown, the Court scheduled the deferred payment.

Future Effect

In this case, the judgment provided by the Delhi High Court was a commercial one. But the reasoning could be extended to residential rental contracts.

The essential takeaways from this case are:-

  1. In a rental deed, the force majeure clause could be used to pursue waiver or suspension of rent in some cases. But, complete avoidance of the deed will allow the tenant the right to leave the rental promises.
  2. Contracts without force majeure clause cannot invoke the Doctrine of impossibility. But, if the justice or equity factors affect the tenants, they could get a waiver.
  3. Contracts where profit sharing or sales turnover is the basis of consideration their rent waiver could be considered if sales or profits are not reported.

The judgment protected the interest of both occupants and landowners. It has offered big relief to the occupants and the landowners, through this dilemma. The Delhi High Court has denied the rights to the tenants with false claims. Having the intention to use the rented property without paying the rent. Yet it has allowed deserving cases carving special anomaly for equitable claims.


Libertatem.in is now on Telegram. Follow us for regular legal updates and judgements from the court. Follow us on Google News,InstagramLinkedInFacebook & Twitter. You can also subscribe for our Weekly Email Updates. You can also contribute stories like this and help us spread awareness for a better society. Submit Your Post Now.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest News

SC: Under-21 Convicts Can Be Given Less Than Minimum Sentence, Resorts To Probation of Offenders Act

The Supreme Court resorted to the Probation of Offenders Act to sidestep the mandate under Section 397 of the Indian Penal Code that mentions a sentence of not less than 7 years to those convicted of armed robbery, to give a chance to two young convicts to reform their lives.

Environment Protection Act Passed at the Instance of Foreign Powers: NHAI in Karnataka HC

The National Highways Authority of India (NHAI) claimed in a submission that the Environment Protection Act 1986 was passed not only for the protection of the environment by the parliament but also at the instance of foreign powers. This statement was made while referring to a UN conference and got the NHAI into great trouble in the Karnataka High Court.

Delhi High Court To Implement a Hybrid System Through Virtual and Physical Hearing

On Friday the Delhi High Court said that they have initiated steps to implement a mode wherein hearing can be done by virtual as well as physical mode. The Delhi High Court is aiming to implement the Hybrid mode. It stated that when the particular bench is conducting a virtual hearing the lawyer may opt for this mode after giving prior intimation about the same.

Mercy Plea of Rajiv Gandhi Assassination Case To Be Decided in Four Weeks, TN Governor To Supreme Court

Tamil Nadu Governor Banwarilal Purohit on Thursday told the Supreme Court that a decision on the mercy petition of one of the convicts serving a life sentence for the assassination of former Prime Minister Rajiv Gandhi, AG Perarivalan will be taken within four weeks. The petition has been pending with the Governor since December 30, 2015.

Bombay High Court Questions FIR Over Journalist Alleged of Communist Comment on WhatsApp

An FIR lodged against the editor of Marathi newspaper, Rajkumar Chhajed has been questioned by the Bombay High Court. The Maharashtra Police has accused Chhajed of creating a rift between the two communities based on a WhatsApp message.

Allahabad High Court Expresses Dissatisfaction on Counsels Seeking Unnecessary Adjournments

The petition had been filed by Smt. Radha prayed to issue directions to Judicial Magistrate-I in Faizabad. The petition sought a speedy decision in...

[Delhi Riots] When the IT Ministry Calls Us, We Will Go Says Harish Salve To Delhi High Court

The Vice President and Managing Director of Facebook, Ajit Mohan told the Supreme Court that when the representatives of the company are called by the Information Technology Ministry they will come and record their statements.

Allahabad High Court Seeks Response on Compensation of Cutting Trees From National Highways Authority of India (Nhai) 

The Order had come in the form of a Public Interest Litigation (PIL) filed by a bunch of law students in Uttar Pradesh. The...

Doctrine of Proportionality Must Adhere to Reasonableness Principal Test: Madras High Court

Young Men's Christian Association built a commercial complex and leased it without having due permission. The District Collector & Tahsildar issued a show-cause notice...

Delhi High Court Refuses To Stay Release of ‘The White Tiger’ on the OTT Platform Netflix

A plea requesting a stay on the release of the film ‘The White Tiger’ by the American producer, John Hart Jr. alleging copyright violation was rejected by the Delhi High Court on Thursday.

More Articles Like This

- Advertisement -