Factors to consider for Payment of Rent during Lockdown

Ramanand & Others Vs Dr. Girish Soni & Anr. (Delhi High Court)

FACTS

The Respondent i.e. the Landlord had given the concerned shop on rent for commercial purposes vide a lease deed on 1^st February, 1975 to the Appellants i.e. the tenants.

The Respondent thereafter, filed for eviction of the Appellants under Section 14 (1) (e) of the Delhi Rent Control Act, 1958 and an order for eviction was passed on 18^th March, 2017 by the Ld. Senior Civil Judge – cum – Rent Controller.

The Appellants filed an appeal against the Order before the Ld. Rent Control Tribunal however, the same was dismissed on 18^th September, 2017. The Appellants had therefore, approached the Delhi High Court challenging the said decision. The Single Judge of the Delhi High Court on 25^th September, 2017 granted a stay on the order of eviction and directed to pay a rent of Rs. 3.5 Lakhs per months by the 10^th of English Calendar month.

An urgent application was filed in light of the various issues relating to suspension of payment of rent by tenants owing to COVID – 19 crisis and the legal questions rising regarding contracts and non-performance of obligations within those contracts.

Therefore, the Appellants seek for waiver of monthly payment of rent as directed on 25^th September, 2017 or partial relief in terms of suspension, postponement or part-payment of the rent amount as the situation was beyond the control of the parties and their business was disrupted.

ISSUE BEFORE THE DELHI HIGH COURT

The following issues were considered by the Delhi High Court:

Whether the lockdown would entitle tenants to claim waiver or exemption from payment of rent or suspension of rent?

OBSERVATION

The Appellants submitted that since because of the lockdown, the business operations are shut down, the Appellants are entitled to some remission.

Whereas, the Respondent submitted that the Appellants were enjoying the possession of the property since 1975 and the Appellants are well-to-do business persons, the rent of the shop is way less compared to the prevalent market rate. The Respondent also contended that force majeure did not apply as the lease deed was governed by the Delhi Rent Control Act, 1958.

The Appellants had requested for a rebate for the period of lockdown.

The Court discussed the contractual relationship between a landlord and a tenant or a lessor and lessee where the rights and obligations of parties are determined by the terms of the Agreement. The Court mentioned that suspension or waiver of the rental payments would be different for different types of rental agreements. For example;