Saturday, 23 May 2020

Delhi HC: Tenant can not seek suspension of payment of rent owing to COVID-19


 In Raichurmatham Prabhakar and Ors. v. Rawatmal Dugar,
(2004) 4 SCC 766 the Supreme Court held that suspension of rent may be
claimed by the tenant if the lessee has been dispossessed. Thus, mere nonuse
may not always entitle the tenant for suspension of rent.
28. This view has been followed by a ld. Single Judge of this Court in
Aranya Hospitality Management Services Pvt. Ltd. v. K. M. Dhoundiyal
& Ors. [Arb. A. (Comm.) 6/2017, decided on 21st March, 2017], where the
Court considered the force majeure clause of the contract to hold that the
mere non-approval by the concerned authority for running a restaurant
would not entitle the tenant to seek suspension of rent. The Court held that
under circumstances wherein the tenant cannot use the property for the
purpose for which it was leased, the tenant would have no right to continue
enjoying the property and seek suspension of rent at the same time.
29. In relation to some contracts which are not classic tenancy or lease
agreements, where the premises is occupied and a monthly pre-determined
amount is paid purely as `Rent’ or `Lease amount’, the manner in which
pandemics, such as COVID-19, can play out would depend upon the nature
of the contract. In contracts where there is a profit-sharing arrangement or an

arrangement for monthly payment on the basis of sales turnover, the
tenant/lessee may be entitled to seek waiver/suspension, strictly in terms of
the clause. Such cases would purely be governed by the terms of the contract
itself, and the tenant’s claim could be that there were no sales and no profits
and thus the monthly payment is not liable to be made. Thus, the entitlement
of the client in such a situation is not governed by any overriding force
majeure event but by the consequence of the said event, being that there
were no sales or profits.
Conclusions:
30. 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.
31. The Tenants’ plea is for extension of the doctrine of suspension of
rent to cases which are covered by lockdown due to COVID-19. Insofar as
this prayer is concerned, this Court considers the following factors as
necessary for determining the question as to whether the Tenants herein are
entitled to any relief of suspension of rent:
i. Nature of the property: The tenanted premises are located in the
prime commercial area of Khan Market for running of a shop. It is
well-known that the commercial area of Khan Market is a sought-after
location for business purposes.

ii. Financial and social status of the parties: The Landlord is a dentist
who wishes to use the tenanted premises and has sought eviction on
the ground of bonafide use under Section 14(1)(e) of the DRC Act.
The Tenants, on the other hand, run a footwear shop on the tenanted
premises, which they have been in possession of since 1975 at a
monthly rental of merely Rs.300/-.
iii. Amount of rent: The monthly payment of Rs.3.5 lakhs has been
fixed by this Court, as a condition for grant of stay for continued use
and occupation, after the decree of eviction was passed. The Tenants
do not wish to vacate the property due to the lockdown but wish to
continue to occupy the property. The amount being paid, when
compared to the prevalent market rent in the area, is on the lower side.
This is clear from a perusal of the lease deed of a neighbouring
property placed on record by the Landlord. Even if the said lease deed
is to be ignored and not taken on record, judicial notice can be taken
of the fact that the prevalent rent in Khan Market is amongst the
highest in the whole of Asia. The amount being paid by the Tenants,
though substantial, is on the lower side as compared to other
properties in Khan Market.
iv. Other factors: The Tenants are `unauthorised occupants’ of the
tenanted premises as a decree of eviction has already been passed.
The monthly payment of rent being made has been fixed by this Court
vide the interim order dated 25th September, 2017 in view of the
judgment of the Supreme Court in Atma Ram Properties (P) Ltd. v.
Federal Motors (P) Ltd., (2005) 1 SCC 705. The use and occupation
charges have to be determined in a manner so as to fully compensate

the Landlord as if the Landlord had let out the property to a third
party. The Tenants are continuing to occupy the premises and do not
intend to vacate the same. In any case, the compensation ought to be
reasonable and should make up for the loss caused to the Landlord
due to delay in execution of the eviction decree. These factors
completely tilt the balance in favour of the Landlord.
v. Any contractual condition(s): There is no contractual condition that
permits non-payment or suspension of rent.
vi. Protection under any executive order(s): There are cases where the
central and state governments may have, from time to time, given
protection to some classes of tenants such as migrants, labourers,
students, etc. These include Order No. 40-3/2020-DM-I (A) dated 29th
March, 2020 issued by the Ministry of Home Affairs (MHA),
Government of India and Order No. F/02/07/2020/S.1/PT. File/81
dated 22nd April, 2020 and Order No. 122-A F/02/07/2020/S.I/9 dated
29th March, 2020 both issued by the Delhi Disaster Management
Authority (DDMA), Government of NCT of Delhi. Without going
into the legality and validity of such Executive orders, suffice it to say
that the present case is not covered by any of these executive orders.
32. The Tenants’ application for suspension of rent is thus liable to be
rejected inasmuch as while invoking the doctrine of suspension of rent on
the basis of a force majeure event, it is clear from the submissions made that
the Tenants do not intend to surrender the tenanted premises. While holding
that suspension of rent is not permissible in these facts, some postponement
or relaxation in the schedule of payment can be granted owing to the
lockdown. 

IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 21st May, 2020
 RC. REV. 447/2017 

RAMANAND Vs   DR. GIRISH SONI 
CORAM:
JUSTICE PRATHIBA M. SINGH


1. This is an application for exemption from filing the duly affirmed
affidavit and the requisite court fee. With an undertaking to deposit the court
fee within 72 hours from the date of resumption of regular functioning of
this Court, exemption is allowed, subject to all just exceptions. Undertaking
filed by the Appellants is accepted.
2. Application is disposed of.

Brief Facts
3. The urgent application under consideration, raises various issues
relating to suspension of payment of rent by tenants owing to the COVID-19
lockdown crisis and the legal questions surrounding the same. The COVID-
19 pandemic has had large-scale implications for human life. Contractual

relationships and jural relationships between parties are severely affected
due to the lockdown. 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, in order to determine the
manner in which the issues that arise can be resolved.
Background facts
4. The present revision petition was filed by the Appellants/Tenants
(hereinafter, “Tenants”) challenging the order dated 18th March, 2017
passed by the ld. Senior Civil Judge-cum-Rent Controller (hereinafter,
“RC”) granting a decree of eviction in respect of Shop No. 30-A, Khan
Market, New Delhi (hereinafter, “tenanted premises”). The Tenants run a
shoe store called ‘Baluja’ in Khan Market where they sell various types of
foot wear. The Landlord i.e., Respondent No.1 (hereinafter, “Landlord”) is
a Dentist. The tenanted premises was given on rent for commercial purposes
through a lease deed executed on 1st February, 1975 at Rs.300/- per month.
In 2008, the Respondents filed an eviction petition under Section 14(1)(e) of
the Delhi Rent Control Act, 1958 (hereinafter, “DRC Act”). Initially, leave
to defend was granted by the RC on 31st March, 2012. However, vide the
impugned order dated 18th March, 2017, a decree for eviction was passed.
The Tenants filed an appeal against the impugned order which was
dismissed by the ld. Rent Control Tribunal (hereinafter, “RCT”) vide order
dated 18th September, 2017 on the ground that the same is not maintainable.
Hence, the present petition challenging the eviction order dated 18th March,
2017.

5. The petition was first listed before this Court on 25th September,
2017, on which date, the ld. Single Judge had stayed the order of eviction
subject to certain terms. The relevant observations in the said order are set
out below:
“9. I have enquired from the counsels, the effect if any of the
landlord, after institution of the petition for eviction under
Section 14(1)(e) of the Act, having entered into an
agreement to sell and which agreement to sell has admittedly
not fructified. It prima facie appears that it is not into the
domain of the Rent Control Act to decide even prima facie
whether there was any such agreement to sell or not. It has
further been enquired, as to what will be the effect, if any, on
the petition for eviction under Section 14(1)(e) of the Act
which has to be decided at least at the first stage summarily,
having remained pending at the stage of leave to defend
itself for nearly four years and what will be the effect of the
landlord for his urgent requirement, having in the
interregnum at one stage considered sale of the property.
10. Since there are allegations with respect to several
documents and new documents which were obtained under
the Right to Information Act, 2005, have also been filed, it is
deemed appropriate to call for the Trial Court record.
11. The counsel for the respondents also states that all the
documents have not been placed on record.
12. The Trial Court record be requisitioned forthwith.
13. Issue notice.
14. Notice is accepted by the counsel for the respondents.
15. Subject to the petitioners, with effect from the month of
October, 2017, paying to the respondents a sum of Rs.3.5
lakhs per month, month by month, in advance for each
month by the 10th day of the English Calendar month, there
shall be stay of the order of eviction.
16. If there is any default in payment, the stay of execution of
the order of eviction shall stand vacated and the respondents
shall be entitled to execute the order of eviction.
17. Needless to state that the aforesaid payments are subject

to the final adjudication of this petition and are repatriable
in the event of the petitioners succeeding in this petition.
18. CM No.35119/2017 is disposed of.
19. List on 29th November, 2017.”
The petition has thereafter remained pending for hearing.
6. Following the outbreak of COVID-19, an application for suspension
of rent has now been moved, during the lockdown period. The stand of the
Tenants is that due to the lockdown, there has been complete disruption of
all business activities, including the business of the Tenants. It is pleaded
that the circumstances are force majeure and beyond the control of the
Tenants. Thus, it is claimed that the Tenants are entitled to waiver of the
monthly payment directed vide order dated 25th September, 2017, or at least
some partial relief in terms of suspension, postponement or part-payment of
the said amount.
Submissions of parties
7. Mr. Rajiv Talwar, ld. counsel for the Tenants, submits that he has
moved the present application by way of abundant caution as, vide the
interim order dated 25th September, 2017 this Court had directed that any
default in payment would lead to execution of the eviction decree. Ld.
counsel submits that his clients are willing to make part-payment of the
monthly amount. Alternatively, he prays that the rent be suspended for at
least one month. He submits that since there has been no business during the
lockdown period, his clients are entitled to some form of remission.
8. On the other hand, Mr. Sanjeev Mahajan, ld. counsel appearing for
the Landlord, submits that the Tenants have been enjoying the tenanted
premises since 1975 for a poultry sum of Rs.300/- per month. Ld. counsel

submits that the Tenants are well-to-do business persons who have also
purchased a neighbouring shop in Khan Market. He further submits that the
amount fixed by this Court i.e., Rs.3,50,000/- per month, is a very meagre
amount compared to the prevalent market rate. He cites the example of Shop
No.33 in Khan Market for which the monthly rent is approximately Rs.22
lakhs for a 1,456 sq. feet property. A photocopy of the lease deed of the said
property has also been submitted. Thus, it is submitted that the tenanted
premises would earn much more than the amount fixed by this Court. Ld.
counsel submits that force majeure does not apply as the case is governed by
the DRC Act. He further submits that the Landlord is a Dentist who needs
the shop for his own bona fide use. Ld. counsel contends that mere
disruption of the business cannot exempt the Tenants from making the
monthly payments as the Landlord also depends on the income from the
tenanted premises.
9. On behalf of the Tenants, it is submitted that some rebate may be
given only for the period of the lockdown and that otherwise the Tenants are
willing to regularly make the monthly payments.
Analysis and Findings
10. This Court has considered the submissions of the parties. The
relationship between a Landlord and Tenant, a Lessor and Lessee and a
Licensor and Licensee can be in multifarious forms. These relations are
primarily governed either by contracts or by law. In the realm of contracts,
the respective rights and obligations of the parties would be determined by
the terms and conditions of the contract itself.

11. Contracts of tenancy and leases could be of different kinds including–
(i) Oral tenancies with a month to month payment of rent;
(I i) Short term tenancy agreements with a monthly rent payable;
(iii) Long term leases with force majeure clauses;
(iv) Lease agreements which are structured as revenue sharing
agreements and;
(v) Lease agreements which are in the nature of monthly payments
as a percentage of the sales turnover.
The above list is however not exhaustive. The question of waiver,
suspension or any remission in the rental payments would operate
differently for each category of agreements. Where there is a contract,
whether there is a force majeure clause or any other condition that could
permit waiver or suspension of the agreed monthly payment, would be
governed by the contractual terms. 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.
12. 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 would be
governed by Section 32 of the Indian Contract Act, 1872 (hereinafter,
“ICA”). This section reads as under:
“32. Enforcement of contracts contingent on
an event happening. — Contingent contracts to
do or not to do anything if an uncertain future
event happens cannot be enforced by law unless
and until that event has happened.
If the event becomes impossible, such
contracts become void.”
13. `Force Majeure’ is defined by Black’s Law Dictionary as “an event
or effect that can be neither anticipated nor controlled”. As per the
dictionary, “The term includes both acts of nature (e.g. floods and
hurricanes) and acts of people (e.g. riots, strikes and wars)”.
14. The Supreme Court in Energy Watchdog v. CERC & Ors., (2017) 14
SCC 80 has clearly held that in case the contract itself contains an express or
implied term relating to a force majeure condition, the same shall be
governed by Section 32 of the ICA. Section 56 of the ICA, which deals with
impossibility of performance, would apply in cases where a force majeure
event occurs outside the contract. The Supreme Court observed:
“34. “Force majeure” is governed by the Contract Act, 1872.
Insofar as it is relatable to an express or implied clause in a
contract, such as the PPAs before us, it is governed by Chapter III
dealing with the contingent contracts, and more particularly,
Section 32 thereof. Insofar as a force majeure event occurs dehors
the contract, it is dealt with by a rule of positive law under Section
56 of the Contact Act.”
Thus, in agreements providing for a force majeure clause, the Court would
examine the same in the light of Section 32. The said clause could be
differently worded in different contracts, as there is no standard draft,
application or interpretation. 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 force majeure clause in
the contract could also be a contingency under Section 32 which may allow
the tenant to claim that the contract has become void and surrender the
premises. 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.
Section 56 – Frustration of Contract
15. In the absence of a contract or a contractual term which is a force
majeure clause or a remission clause, the tenant may attempt to invoke the
Doctrine of Frustration of contract or `impossibility of performance’, which
however would not be applicable in view of the settled legal position set out
below. The said doctrine of `impossibility of performance’ is encapsulated in
Section 56 of the ICA, which reads as under:
“56. Agreement to do impossible act. — An
agreement to do an act impossible in itself is
void. Contract to do an act afterwards
becoming impossible or unlawful. — A
contract to do an act which, after the contract is
made, becomes impossible, or, by reason of
some event which the promisor could not
prevent, unlawful, becomes void when the act
becomes impossible or unlawful.
Compensation for loss through nonperformance
of act known to be impossible or
unlawful. — Where one person has promised
to do something which he knew, or, with
reasonable diligence, might have known, and
which the promisee did not know, to be
impossible or unlawful, such promisor must
make compensation to such promisee for any
loss which such promisee sustains through the
non-performance of the promise.”
16. There are various conditions that have to be fulfilled to satisfy the
conditions of `impossibility’ under Section 56. However, in the context of a
tenant’s obligations, the Supreme Court had the occasion to consider this
Singh & Anr., AIR 1968 SC 1024 where the tenant who had rented

agricultural lands in Punjab which he could not utilise due to the 1947
Partition, sought refund of the rent paid by him for the said land for Kharif
season 1947 and Rabi season 1948. The Supreme Court, after considering
the law on `impossibility of performance’ from various jurisdictions, held
that in the Indian context Section 56 “lays down a positive rule relating to
frustration of contracts and the Courts cannot travel outside the terms of
that section”. The Court held that Section 56 does not apply to lease
agreements. The Court drew a distinction between a `completed conveyance’
and an `executory contract’ and observed:
“9. We are unable to agree with counsel for the
appellant in the present case that the relation
between the appellant and the respondents
rested in a contract. It is true that the court of
wards had accepted the tender of the appellant
and had granted him a lease on agreed terms of
lands of Dada Siba Estate. But the rights of the
parties did not after the lease was granted rest
in contract. By Section 4 of the Transfer of
Property Act the chapters and sections of the
Transfer of Property Act which relate to
contracts are to be taken as part of the Indian
Contract Act, 1872. That section however does
not enact and cannot be read as enacting that
the provisions of the Contract Act are to be
read into the Transfer of Property Act. There is
a clear distinction between a completed
conveyance and an executory contract, and
events which discharge a contract do not
invalidate a concluded transfer.
10. By its express terms Section 56 of the
Contract Act does not apply to cases in which
there is a completed transfer. The second
paragraph of Section 56 which is the only
paragraph material to cases of this nature has a

limited application to covenants under a lease.
A covenant under a lease to do an act which
after the contract is made becomes impossible
or by reason of some event which the promisor
could not prevent unlawful, becomes void when
the act becomes impossible or unlawful. But on
that account the transfer of property resulting
from the lease granted by the lessor to the
lessee is not declared void.
11. By the agreement of lease the appellant
undertook to pay rent for the year 1947-48 and
the Court of Wards agreed to give on lease the
land in its management. It is not claimed that
the agreement of lease was void or voidable.
Nor is it the case of the appellant that the lease
was determined in any manner known to law.
The appellant obtained possession of the land.
He was unable to continue in effective
possession on account of circumstances beyond
his control. Granting that the parties at the date
of the lease did not contemplate that there may
be riots in the area rendering it unsafe for the
appellant to carry on cultivation, or that the
crops grown by him may be looted, there was
no covenant in the lease that in the event of the
appellant being unable to remain in possession
and to cultivate the land and to collect the
crops, he will not be liable to pay the rent.
Inability of the appellant to cultivate the land or
to collect the crops because of widespread riots
cannot in the events that transpired clothe him
with the right to claim refund of the rent
paid.…”
17. The above judgment laid down unequivocally that a lease is a
completed conveyance though it involves monthly payment and hence,
Section 56 cannot be invoked to claim waiver, suspension or exemption

from payment of rent. This view of the Supreme Court has been reiterated
in T. Lakshmipathi and Ors. v. P. Nithyananda Reddy and Ors., (2003) 5
SCC 150, as also in Energy Watchdog (supra).
18. Recently, a ld. Division Bench of the Delhi High Court in Hotel Leela
Venture Ltd. v. Airports Authority of India, 2016 (160) DRJ 186,
observed:
“34. The consideration for the lease being one;
albeit having two constitutive elements, the law
declared by the Supreme Court in the decision
reported as (1968) 3 SCR 339 Raja Dhruv Dev
Chand Vs. Raja Harmohinder Singh & Anr
would squarely be applicable; and if it was the
claim by the lessee that the consideration for
the lease failed or became oppressed, the claim
would fail because neither the doctrine of
frustration applies to a lease nor broad
principles thereof to a lease. The reason being
that executory contracts alone are capable of
being frustrated and not executed contracts.
For example, 'A' a retailer of shoes purchases
shoes from 'B' who is the manufacturer of
shoes. The agreed quantities of shoes are
delivered and part sale consideration paid. On
account of change in import policy the market is
flooded with imported shoes which are much
cheaper vis-a-vis the price payable by 'A' to 'B'.
'A' cannot plead frustration requiring the Court
to reduce the price and relieve him the
obligation to pay the balance sale consideration
to 'B'.
35. A contract for lease whereunder the lessee
obtains possession from the lessor is an
executed contract and during the duration of
the lease, since it is a term of the agreement
that consideration shall be rendered

periodically, the agreed consideration has to be
paid and it hardly matters that rents have fallen
in the meanwhile. The result of a lease is the
creation of a privity of estate inasmuch as lease
is the transfer of an interest in immovable
property within the meaning of Section 5 of the
Transfer of Property Act, 1882, as was held in
para 20 of the decision reported as 2003 (5)
SCC 150 T. Lakshmipathi & Ors. Vs. P.
Nithyananda Reddy & Ors. That apart, as held
in the decisions reported as (1960) 2 SCR 793
Alopi Prashad Vs. UOI and (1975) 2 SCC 633
Panna Lal Vs. State of Rajasthan a contract is
not discharged merely because it turns out to be
difficult or onerous for one party to perform
and none can resile from a contract for said
reason.”
From the above judgments and the settled law, it is clear that Section 56 of
the ICA would not apply to a lease agreement and other similarly situated
contracts which are `executed contracts’ and not `executory contracts’.
Provisions of the Transfer of Property Act, 1882 governing landlordtenant
relationships qua Force Majeure
19. In the absence of contracts or contractual stipulations the provisions
of the Transfer of Property Act, 1882 (hereinafter, “TPA”) would govern
tenancies and leases.
20. The doctrine of force majeure is recognised in Section 108(B)(e) of
the TPA. Section 108(B)(l) also enumerates the `Rights and Liabilities’ of
the lessee. The relevant clauses of the TPA are as under:
“108. Rights and liabilities of lessor and
lessee.—In the absence of a contract or local
usage to the contrary, the lessor and the lessee
of immoveable property, as against one

another, respectively, possess the rights and are
subject to the liabilities mentioned in the rules
next following, or such of them as are
applicable to the property leased:—
(A) Rights and liabilities of the lessor-
(B) Rights and liabilities of the lessee-
(e) if by fire, tempest or flood, or violence of
an army or of a mob, or other irresistible
force, any material part of the property be
wholly destroyed or rendered substantially
and permanently unfit for the purposes for
which it was let, the lease shall, at the option
of the lessee, be void:
Provided that, if the injury be occasioned
by the wrongful act or default of the lessee, he
shall not be entitled to avail himself of the
benefit of this provision: …
(f) to (k)…….
(l) the lessee is bound to pay or tender, at the
proper time and place, the premium or rent to
the lessor or his agent in this behalf;”
A perusal of the above shows that the provision itself would apply only in
the absence of a contractual stipulation. Further, on the occurrence of any of
the situations contemplated under (e) above, which would render the
property `substantially and permanently unfit’ to be used for the purpose for
which it was leased, at the option of the lessee, the lease would be void.
21. In Raja Dhruv (supra) the Supreme Court, while interpreting as to
what constitutes `substantially and permanently unfit’ held that temporary
non-use by the tenant due to any factors would not entitle the tenant to
invoke this section. The relevant observations of the Court are:

17. The case strongly relied upon by counsel
for the appellant was Gurdarshan
Singh v. Bishen Singh [ILR 1962 Punjab 5]. In
that case a lease was executed on January 8,
1947 in respect of agricultural land situated in
an area which on partition of India fell within
West Pakistan. The Court found that possession
of the demised land was not given to the lessee,
and the landlord was on account of riots unable
to deliver possession. Obviously on that finding
the tenant was entitled to claim refund of the
rent paid. But the Court proceeded to consider
the question “whether the doctrine of
frustration applies to a contract of lease of
agricultural lands” and recorded an answer
that the doctrine of frustration applies to
leases. The Court observed at p. 13 — “that the
doctrine of frustration does apply to leases, but
even if it does not apply in terms to a contract
of lease of agricultural land the broad principle
of frustration of contract applies to leases”. We
are unable to agree with that observation, and
the observation at p. 11 that “According to
Indian law, sales of land as also leases are
contracts”. Under a lease of land there is a
transfer of right to enjoy that land. If any
material part of the property be wholly
destroyed or rendered substantially and
permanently unfit for the purpose for which it
was let out, because of fire, tempest, flood,
violence of an army or a mob, or other
irresistible force, the lease may, at the option of
the lessee, be avoided. This rule is incorporated
in Section 108(e) of the Transfer of Property
Act and applies to leases of land, to which the
Transfer of Property Act applies, and the
principle thereof to agricultural leases and to

leases in areas where the Transfer of Property
Act is not extended. Where the property leased
is not destroyed or substantially and
permanently unfit, the lessee cannot avoid the
lease because he does not or is unable to use
the land for purposes for which it is let to him.”
22. In T. Lakshmipathi (supra), on the question of what constitutes
permanent destruction of a property, the Supreme Court cited with approval
Woodfall’s Laws of Landlord and Tenant (28th Edition, Vol.1):
“21. In Woodfall's Laws of Landlord and
Tenant (28th Edn., Vol. 1) the relevant law is so
stated:
“Where the lessee covenants to pay rent
at stated period (without any exception in case
of fire), he is bound to pay it, though the house
be burnt down; for the land remains, and he
might have provided to the contrary by express
stipulation, if both parties had so intended. And
this rule applies, although the lessee's covenant
to repair contain an exception in case of fire.
Similarly, an action for use and occupation still
lies in respect of the whole period of the
tenancy notwithstanding the destruction of the
premises by fire.”
(para 1-0778)
“In a lease of land with buildings upon it the
destruction of even the entirety of the buildings
does not affect the continuance of the lease or
of the lessee's liabilities under it, unless so
provided by express contract.”
(para 1-2055)
“A demise must have a subject-matter, either
corporeal or incorporeal. If the subject-matter
is destroyed entirely, it is submitted that the
lease comes automatically to an end, for there
is no longer any demise. The mere destruction

of a building on land is not total destruction of
the subject-matter of a lease of the land and
building, so the demise continues. But if by
some convulsion of nature the very site ceases
to exist, by being swallowed up altogether or
buried in the depths of the sea, it seems clear
that any lease of the property must come to an
end.”
(para 1-2056)”
23. In Shaha Ratansi Khimji & Sons v. Kumbhar Sons Hotel Pvt. Ltd. &
Ors., (2014) 14 SCC 1 the Supreme Court clarified that in cases concerning
a lease agreement, Section 108(B)(e) of the TPA cannot be interpreted by
assuming that when a building or structure is leased out, it is only the
superstructure that is exclusively leased out. The lease is also a lease of site.
In view of the law laid down in T. Lakshmipathi (supra), it was held that
even though the tenanted premises had been demolished and destroyed, the
tenancy cannot be said to have been determined.
24. More recently, this view has been reaffirmed by this Court in
Sangeeta Batra v. M/s VND Foods & Ors., (2015) 3 DLT (Cri) 422
wherein it has been held that the fact that the leased premises, intended to be
run as a restaurant, was sealed on two occasions is of no relevance as the
tenants did not choose to avoid the lease. Interpreting Section 108 of the
TPA, the ld. Single Judge of this Court observed:
“26. Section 108 of the Transfer of Property Act
deals with the aspect of rights and liabilities of
lessor and lessee. The rights and liabilities of
the lessee are enumerated from clause (d)
onwards upto clause (q). Clause (e) of Section
108 reads:
“(e) if by fire, tempest or flood, or
RC. REV. 447/2017 Page 17 of 18
violence of an army or of a mob, or other
irresistible force, any material part of the
property be wholly destroyed or rendered
substantially and permanently unfit for
the purposes for which it was let, the
lease shall, at the option of the lessee, be
void:
Provided that, if the injury be
occasioned by the wrongful act or default
of the lessee, he shall not be entitled to
avail himself of the benefit of this
provision;” (Emphasis supplied)
27. Thus, if the leased premises is rendered
substantially and permanently unfit for the
purpose for which it was let, the lessee has the
option to avoid the lease. Unless the lessee so
avoids the lease, he cannot avoid his obligation
contained in clause (l) of Section 108, which
states that “the lessee is bound to pay or tender,
at the proper time and place, the premium or
rent to the lessor or his agent in this behalf;”.
25. Thus, for a lessee to seek protection under sub-section 108(B)(e),
there has to be complete destruction of the property, which is permanent in
nature due to the force majeure event. Until and unless there is a complete
destruction of the property, Section 108(B)(e) of the TPA cannot be
invoked. In view of the above settled legal position, temporary non-use of
premises due to the lockdown which was announced due to the COVID-19
outbreak cannot be construed as rendering the lease void under Section
108(B)(e) of the TPA. The tenant cannot also avoid payment of rent in view
of Section 108(B)(l).
Suspension of Rent
26. Finally, in the absence of a contract or a contractual stipulation, as in

the present case, 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
as held by the Supreme Court in Surendra Nath Bibran v. Stephen Court,
AIR 1966 SC 1361. In the said case, the Court directed payment of
proportionate part of the rent as the tenant was not given possession of a part
of the property.
27. In Raichurmatham Prabhakar and Ors. v. Rawatmal Dugar,
(2004) 4 SCC 766 the Supreme Court held that suspension of rent may be
claimed by the tenant if the lessee has been dispossessed. Thus, mere nonuse
may not always entitle the tenant for suspension of rent.
28. This view has been followed by a ld. Single Judge of this Court in
Aranya Hospitality Management Services Pvt. Ltd. v. K. M. Dhoundiyal
& Ors. [Arb. A. (Comm.) 6/2017, decided on 21st March, 2017], where the
Court considered the force majeure clause of the contract to hold that the
mere non-approval by the concerned authority for running a restaurant
would not entitle the tenant to seek suspension of rent. The Court held that
under circumstances wherein the tenant cannot use the property for the
purpose for which it was leased, the tenant would have no right to continue
enjoying the property and seek suspension of rent at the same time.
29. In relation to some contracts which are not classic tenancy or lease
agreements, where the premises is occupied and a monthly pre-determined
amount is paid purely as `Rent’ or `Lease amount’, the manner in which
pandemics, such as COVID-19, can play out would depend upon the nature
of the contract. In contracts where there is a profit-sharing arrangement or an

arrangement for monthly payment on the basis of sales turnover, the
tenant/lessee may be entitled to seek waiver/suspension, strictly in terms of
the clause. Such cases would purely be governed by the terms of the contract
itself, and the tenant’s claim could be that there were no sales and no profits
and thus the monthly payment is not liable to be made. Thus, the entitlement
of the client in such a situation is not governed by any overriding force
majeure event but by the consequence of the said event, being that there
were no sales or profits.
Conclusions:
30. 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.
31. The Tenants’ plea is for extension of the doctrine of suspension of
rent to cases which are covered by lockdown due to COVID-19. Insofar as
this prayer is concerned, this Court considers the following factors as
necessary for determining the question as to whether the Tenants herein are
entitled to any relief of suspension of rent:
i. Nature of the property: The tenanted premises are located in the
prime commercial area of Khan Market for running of a shop. It is
well-known that the commercial area of Khan Market is a sought-after
location for business purposes.

ii. Financial and social status of the parties: The Landlord is a dentist
who wishes to use the tenanted premises and has sought eviction on
the ground of bonafide use under Section 14(1)(e) of the DRC Act.
The Tenants, on the other hand, run a footwear shop on the tenanted
premises, which they have been in possession of since 1975 at a
monthly rental of merely Rs.300/-.
iii. Amount of rent: The monthly payment of Rs.3.5 lakhs has been
fixed by this Court, as a condition for grant of stay for continued use
and occupation, after the decree of eviction was passed. The Tenants
do not wish to vacate the property due to the lockdown but wish to
continue to occupy the property. The amount being paid, when
compared to the prevalent market rent in the area, is on the lower side.
This is clear from a perusal of the lease deed of a neighbouring
property placed on record by the Landlord. Even if the said lease deed
is to be ignored and not taken on record, judicial notice can be taken
of the fact that the prevalent rent in Khan Market is amongst the
highest in the whole of Asia. The amount being paid by the Tenants,
though substantial, is on the lower side as compared to other
properties in Khan Market.
iv. Other factors: The Tenants are `unauthorised occupants’ of the
tenanted premises as a decree of eviction has already been passed.
The monthly payment of rent being made has been fixed by this Court
vide the interim order dated 25th September, 2017 in view of the
judgment of the Supreme Court in Atma Ram Properties (P) Ltd. v.
Federal Motors (P) Ltd., (2005) 1 SCC 705. The use and occupation
charges have to be determined in a manner so as to fully compensate

the Landlord as if the Landlord had let out the property to a third
party. The Tenants are continuing to occupy the premises and do not
intend to vacate the same. In any case, the compensation ought to be
reasonable and should make up for the loss caused to the Landlord
due to delay in execution of the eviction decree. These factors
completely tilt the balance in favour of the Landlord.
v. Any contractual condition(s): There is no contractual condition that
permits non-payment or suspension of rent.
vi. Protection under any executive order(s): There are cases where the
central and state governments may have, from time to time, given
protection to some classes of tenants such as migrants, labourers,
students, etc. These include Order No. 40-3/2020-DM-I (A) dated 29th
March, 2020 issued by the Ministry of Home Affairs (MHA),
Government of India and Order No. F/02/07/2020/S.1/PT. File/81
dated 22nd April, 2020 and Order No. 122-A F/02/07/2020/S.I/9 dated
29th March, 2020 both issued by the Delhi Disaster Management
Authority (DDMA), Government of NCT of Delhi. Without going
into the legality and validity of such Executive orders, suffice it to say
that the present case is not covered by any of these executive orders.
32. The Tenants’ application for suspension of rent is thus liable to be
rejected inasmuch as while invoking the doctrine of suspension of rent on
the basis of a force majeure event, it is clear from the submissions made that
the Tenants do not intend to surrender the tenanted premises. While holding
that suspension of rent is not permissible in these facts, some postponement
or relaxation in the schedule of payment can be granted owing to the
lockdown.

33. It is accordingly directed that the Tenants shall now pay the use and
occupation charges for the month of March, 2020 on or before 30th May
2020 and for the months of April, 2020 and May, 2020 by 25th June, 2020.
From June 2020 onwards, the payment shall be strictly as per the interim
order dated 25th September 2017. Subject to these payments being made, the
interim order already granted shall continue. If there is any default in
payment, the interim order dated 25th September, 2017 would be operational.
The said interim order is very clear i.e., if there is any non-payment, the
decree would be liable to be executed.
34. The application is disposed of in the above terms.
PRATHIBA M. SINGH
JUDGE
MAY 21, 2020

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