Delhi High Court: Lockdown Due to COVID-19 Doesn’t Exempt Tenants From Payment Of Rent

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An application regarding suspension of payment of rent by tenants owing to COVID-19 lockdown crisis raises an issue. The question as to whether the lockdown would entitle tenants to claim waiver or exemption from payment of rent or suspension of rent. A single-judge bench of J. Prathiba M. Singh addressed this issue.   

Brief facts of the case

The plaintiffs (hereafter ‘Tenants’) run a shoe store called ‘Baluja’ in Khan Market. The respondent (hereafter ‘Landlord’) is a dentist. The tenanted premises, given on rent was for commercial purposes through a lease deed. In 2008, the respondent filed an eviction petition under Delhi Rent Control Act, 1958 (DRC Act). Initially, leave to defend was granted by RC on 31.03.2012. However, vide the impugned order dated 18.03.2017, a decree for eviction was passed. The Tenants filed an appeal against the impugned order dated 18.03.207, on the ground that the same is not maintainable. Following the outbreak of COVID-19, during the lockdown period, the Tenants moved an application for suspension of rent. They pleaded the circumstances of force majeure and that the same is beyond their control. 

Arguments before the Court

Mr. Rajiv Talwar, the learned counsel for the plaintiff contended that due to lockdown, there is complete disruption of business activities. Thus, he claimed that they are entitled to waiver the rent or at least some partial relief. Either in terms of suspension, postponement or part-payment of the said amount. Alternatively, he prays that the rent be suspended for at least one month. He also submits that since there has been no business during the lockdown period, his clients are entitled to some form of remission. On behalf of his clients, he submitted that some rebate may be given only for the period of lockdown. 

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Mr. Sanjeev Mahajan, the learned counsel appearing for the Landlord submitted that the Tenants have enjoyed the tenanted premises since 1975 for a poultry sum of Rs. 300/- month. He further submits that the Tenants own another shop at Khan Market and the rent asked for is a meagre amount compared to the prevalent market rate. He submitted that force majeure would not apply as the case is governed by the DRC Act. He contends that the mere disruption of businesses cannot exempt the Tenants from making the monthly payment as the Landlord also depends on the income from the tenanted premises. 

Court’s view

The High Court discussed in detail about force majeure and frustration of contract by placing reliance on several judgments. The Court is of the view that temporary non-use of premises due to the lockdown as a result of COVID-19 outbreak cannot be construed as rendering the lease void. The clause of force majeure can be applied until and unless there is complete destruction of property. The tenant thus, cannot also avoid payment of rent in view of Section 108(B)(1) of Transfer of Property Act, 1882. The Court said: 

In light of the above legal position, the Tenants’ prayer for suspension of rent in the present case is to be considered. There is no rent agreement or lease deed between the parties and hence Section 32 of the ICA has no applicability. The case is governed by the provisions of the Delhi Rent Control Act, 1958. Section 56 of the ICA does not apply to tenancies. The Tenants also do not urge that the tenancy is void under Section 180 (B)(e) of the TPA. The tenants are also not `Lessees’ as an eviction decree has already been passed against them.

Based on the following factors such as nature of property, financial and social status of parties, amount of rent, contractual conditions and, protection under any executive orders, the Tenants application for suspension of rent is rejected. 

Held

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In view of the above reasoning, the High Court of Delhi directed the Tenants to make the monthly payments with limited time intervals. If there is any non-payment, the eviction decree is liable to be executed. It is clear from the submission that while invoking the doctrine of suspension of rent on the basis of force majeure, the Tenants do not intend to surrender the tenanted premises. Consequently, the application is disposed of.


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