DELHI HC ALLOWS POSTPONEMENT OF PAYMENT SCHEDULE FOR RENT DUE AND REJECTS CLAIM FOR SUSPENSION

(By – Ukkash F)

Delhi HC ruled out that the tenants cannot invoke Force Majeure and claim for suspension of rent due, owing to the lockdown when they are still residual at those rented premises. The bench was comprised of the Single Bench of Justice Prathiba M Singh.

However, the court provided some relief to the tenants keeping the pandemic situation into consideration by allowing postponement of paying the rents. This relaxation of payment schedule is the better option since waiving the payment of rent will also affect the owner as most of them are dependent on rent. The Court made the following observation before ruling out the order:-

“The question as to whether the lockdown would entitle tenants to claim waiver or exemption from payment of rent or suspension of rent is bound to arise in thousands of cases across the country. Though there can be no standard rule that can be prescribed to address these cases, some broad parameters can be kept under consideration, to determine how the issues that arise can be resolved.” 

In the case, The Counsel on behalf of the tenants submitted that the lockdown has caused huge losses to the tenants, and hence waiving the payment of rent would be helpful. On the other hand, The landlord’s counsel ruled out that the landlords also depend on the same rent for their livelihood.

After considering the submissions, the court held that the circumstances such as the outbreak of a pandemic, like the current COVID-19 outbreak, the grounds on which the tenants/lessees or other similarly situated parties could seek waiver or non-payment of the monthly amounts. Under Indian contract Act, any contract which have a force majeure clause would be governed by Sec. 32 & Sec. 56 of the same legislation. 

So, Force Majeure would not apply to a lease agreement and other similarly situated contracts which are `executed contracts’ and not `executory contracts’.