Pay or not to Pay and how to pay are the questions grippling the Tenants during these Covid-19 Pandemic Times. All that Landlords are concerned is about their rental income because for some of them, the rental income is the source of their livelihood yet for others, this is other source of income but when the income and the paying capacity of the employers have also gone for a toss, what would a common man do stuck in this vicious cycle?

Force Majeure and Law

Before we understand what is Force Majeure, first thing that needs to be kept in mind is that the lockdown was announced by the Government to contain the spreading of virus and had this not been done, the issues surrounding the rental payments would not have arisen at all. The Governmental authorities of respective States have passed directions in favour of the tenant be it for residential or commercial property announcing no rental to be paid however for commercial properties where the force majeure clauses are present, it may not be a burden but usually in residential rental agreements, this clause is missing.

Force Majeure clauses are those wherein on happening of an event beyond the control of any human being, the duties prescribed under the agreement are either temporarily suspended or waived off permanently depending on the gravity of the situation or event rendering the performance of the contract impossible.

For rental agreements, it can be inferred that the one of the duties of a tenant under the rental agreement is payment of rent but invoking the force majeure clause, the right of the tenant under these pandemic times can be protected either by suspending the rental to be paid or completely waiving off the rent due to non-use of the premises in question.

Applicability: Recent Decisions

Recently the Delhi High Court in the case of Ramanand & Others v. Dr. Girish Soni and Another decided on 21/May/2020 has touched upon the issue of rentals while deciding a petition filed by a tenant seeking suspension of payment of rent by him during Covid-19 lockdown. For those clauses where the clause on Force Majeure was present, the Court went on to interpret the same referring to Section 32 of the Indian Contract Act, 1872 which stipulates the enforcements of contracts contingent on an event happening and if such event doesn’t happen or the happening of such event becomes impossible, such contracts would be rendered void. The rider though in all these force majeure clauses as concluded by the Delhi High Court is that the force majeure clause should consist the situation of the lockdown for the same to be invoked.

While for those contracts where no Force Majeure clauses were present, the Court went on to interpret the same referring to Section 56 of the Indian Contract Act, 1872 which stipulates impossibility of performance however the main question was whether Section 56 is applicable on the lease agreements or not? Tracing the law since 1968, the Court held that section 56 cannot be invoked to claim any waiver, suspension or exemption from payment of rent. However on the same term and trying to find some respite for the agreements for those tenants who fall under this category, the Court opined that whether the tenant may seek suspension of rent or not for the ground of non-use of the premises due to pandemic can be adjudged by invoking the equitable jurisdiction of the Court as the relief can be adjudged only after analysing the facts and circumstances of each case.   

Hence, from the decision rendered and the situations being prevailing in these Covid-19 times, the law seems to be in favour of the landlord only because the pandemic though has rendered the premises unfit for use but that itself cannot be used to conclude that it was due to permanent destruction of the premises which is a ground found mentioned under Section 108 (B) (e) of the Transfer of Property Act, 1882.

Moving further, a PIL by Adv. Gaurav Jain was also filed in the Delhi High Court praying for directions from the Court for prohibiting the Landlord to evict the tenants on the ground of non-payment of rent during this pandemic times. However, without granting any relief in such PIL, the Court while observing that the Courts cannot do charity at the cost of others, went on to impose a heavy cost on the Petitioner.

Conclusion

In all, irrespective of the force majeure clause being present or not, it is best to first negotiate with the landlord who is similarly placed because it may be so that your landlord is also facing financial crunch due to the pandemic times and may allow you to defer the payment of rent or waive off in extreme conditions. If nothing works out, the tenant is free to knock the door of a Court invoking the equitable and discretional jurisdiction of the Court seeking the desired relief or vacating the tenanted premises if not much harm is being caused in vacating. For residential premises, this may not seem to be much of a hassle but for commercial premises, vacating the premises would call for enforcement of other stringent clauses present in their lease or rent agreement respectively.