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Tenant cannot suspend rent for temporary non-use due to COVID-19 lockdown

26 May 2020

The Delhi High Court has clarified that the lockdown period where premises cannot be used would not give a tenant the right to void the lease. Consequentially, a lessee cannot claim suspension of payment of lease or rental amount due to COVID-19 lockdown.

Introduction

One of the pertinent issues landlords and tenants in India are grappling with during the COVID-19 crisis is the suspension of monthly rentals during the government announced lockdown periods. In its judgment dated 21 May 2020 in Ramanand and Others v. Dr. Girish Soni and Others[1] (Case), the Delhi High Court (Court) has held that the period of lockdown on account of COVID-19 does not excuse the payment of rental amounts.

Facts

The tenant in the Case was occupying a commercial property in one of Delhi’s most sought after commercial spaces. The Case involved an eviction order passed against the tenant in an eviction petition filed by the landlord before the rent control authority under the Delhi Rent Control Act, 1958. When the matter reached the Court, it stayed the operation of the eviction order by an interim order, subject to deposit of an enhanced monthly rental amount of Rs. 3.5 lakhs, as against a rental amount of Rs. 300 per month being paid earlier. In these proceedings, the tenant approached the Court seeking suspension of rent on account of the COVID-19 pandemic and the consequent lockdown. The circumstances of COVID-19 pandemic and the consequent lockdown were contended to be force majeure and beyond the control of the tenant.

Ruling

The Court examined the provisions of the Contract Act, 1872 (Contract Act) and the Transfer of Property Act, 1882 (TOPA) before concluding that the tenant’s request for suspension of rent was liable to be rejected.

The Court specifically analysed situations where a contract (including a lease) contains a force majeure clause and provides for actions to be taken pursuant to the said clause and where the lease did not provide for a force majeure clause. The Court’s analysis was as follows:

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