Delhi

Rent waiver only if contract has ‘force majeure’ clause

HC rejects Khan Market tenants’ plea

The Delhi High Court has remarked that if the rent contract contains a ‘force majeure' clause providing for some sort of waiver or suspension of rent, only then the tenant could claim the same in circumstances such as the outbreak of a pandemic, like the current COVID-19 outbreak.

Justice Prathiba M. Singh also said that the question of waiver, suspension or any remission in the rental payments would operate differently for each category of agreements.

‘Force Majeure’ is defined by Black’s Law Dictionary as “an event or effect that can be neither anticipated nor controlled”, the High Court said. The term includes both acts of nature such as floods and hurricanes, and acts of people such as riots, strikes and wars.

If, however, there is no contract at all or if there is no specific force majeure clause, then the issues would have to be determined on the basis of the applicable law, the court said while rejecting some Khan Market tenants’ plea seeking suspension of rent payment.

The court said that the petitioner tenants are also not ‘lessees’ as an eviction decree has already been passed against them.

In the 22-page verdict, Justice Singh said that 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.

Justice Singh said some broad parameters can be kept under consideration. “In 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 contracts which have a force majeure clause and would be governed by Section 32 of the Indian Contract Act, 1872,” Justice Singh said.

“The fundamental principle would be that if the contract contains a clause providing for some sort of waiver or suspension of rent, only then the tenant could claim the same,” the High Court said, adding, “However, if the tenant wishes to retain the premises and there is no clause giving any respite to the tenant, the rent or the monthly charges would be payable.”

In the absence of a contract or a contractual stipulation, the tenant may generally seek suspension of rent by invoking the equitable jurisdiction of the court due to temporary non-use of the premises.

”The question as to whether the suspension of rent ought to be granted or not would depend upon the facts and circumstances of each case,” the court added.

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Printable version | Jun 3, 2020 9:22:57 AM | https://www.thehindu.com/news/cities/Delhi/rent-waiver-only-if-contract-has-force-majeure-clause/article31654353.ece

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