Do we need to give rent for the period of lockdown?
Summary- In this post we will discuss about the recent judgement in which the Delhi High Court ordered tenants to pay the rent for the period of lockdown.
“Tenants can delay but have to pay rent” DELHI HIGH COURT
Tenants in the Capital are liable to pay rent for the period the city has been under lockdown, the Delhi High Court has held, stating that suspension of rent owed for that period is not permissible. The court, however, said some relaxation in the form of postponement of payments can be granted. A single-judge bench of Justice Pratibha M Singh said tenants cannot invoke the doctrine of suspension of rent on the basis of “a force majeure event as they (the applicants) do not intend to surrender the tenanted premises and continue to occupy it”. Force majeure is a contractual provision allocating the risk of loss, if performance becomes impossible or impracticable, especially as a result of an unanticipated or uncontrolled event.
“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 the 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,” the court said in a 22-page judgment of May 21, uploaded to the court’s website on May 22.The court was hearing an application that had raised various issues related to the suspension of payment of rent, owing to the national lockdown, and legalities regarding the same. A nationwide lockdown was imposed by the central government from March 25 to curb the spread of Covid-19 disease. The Delhi government had put curbs on citizens’ movement in the city from March 23, owing to Covid-19 cases coming up in the Capital around that time. By March 25, there were 35 confirmed cases of the Sars-Cov-2 (the virus which causes the coronavirus disease) and death caused by it in the city.
Also Read-Chandigarh Model Tenancy Act
On March 29, Delhi Chief Minister Arvind Kejriwal had appealed to landlords not to force tenants for one or two months to give rent and accept payments in instalments if the tenant is short on money. Later, in April, an order by the Delhi Disaster Management Authority had called for “strict compliance” of directions that landlords will not demand rent from migrant workers and students for a month. It required respective district magistrates to spread awareness about this directive and, in case of non-compliance, take legal action. The latest judgement came on an application filed in a pending plea by the owner of a shoe shop in Khan Market, who had sought suspension of Rs 3.5 lakh monthly rent, while also challenging the eviction over non-payment.
Deciding on the factor, 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…. 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”. Though the May 21 order talks about lease agreements in general, making it eligible for both residential as well as commercial properties, the court, while laying broad guidelines, said the present case of Khan Market is not covered under the executive orders passed by the central and the Delhi governments giving protection to some classes of tenants. A senior Delhi government official in the chief minister’s office, asking not to be named, said that they would examine the order. Reacting to the order, Praveen Khandelwal, secretary-general of the Confederation of All India Traders, said while the court granted time to tenants to pay rent, a mechanism should be brought about so that the rent amount of the lockdown period can be paid in a six-month instalment period. “A major chunk of our expenditure goes towards rent for shops. Also, as per the government’s directions, we are bound to pay salaries to employees. In the light of this, a mechanism should be brought about so that we can clear the rent dues by a six-month instalment,” he said. After the lockdown was put into effect, several student groups living in rented accommodations across the Capital had written to Kejriwal, asking for help on similar grounds.
Varkey Parakkal, founder of a Student Tenant’s Union, said the high court’s judgment of May 21 would not be applicable to students as the court had refused to examine the legalities of certain executive orders passed by the centre and the Delhi governments. “We got the judgment examined by our lawyers who said this order would not cover the executive orders passed by the authorities time to time in case of migrant labours, students and daily wagers. Hence, our rights are reserved,” he said. Atul Goyal, President of United Residents’ Joint Action, said there is a unilateral agreement between tenants and their landlords on humanitarian grounds and hence, both of them should chalk out a strategy on this. In the matter decided May 21, while the counsel for the petitioner had sought a waiver on the rent and postponement of payments, the advocate for the landlord had contended that mere suspension of work would not give the liberty to tenants to not pay rent as the revenue streams of landlords are also dependent on rent money.
This post was written by Aman Dubey.
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