Case Name: Ramanand and Others v. Dr. Girish Soni and Another
Citation: (RC. Rev. 447/2017) -
Court: High Court of Delhi -
Coram: Justice Prathiba M. Singh
The novel Corona Virus has stalled all the commercial activities throughout the
world. All kinds of businesses have been significantly hit by the disruption
caused by the pandemic. Consequently, the commercial lease agreements in India
have been severally affected due to the ongoing COVID-19 crises. On 21st May
2020, the High Court of Delhi in Ramanand and Others v. Dr. Girish Soni and
 has tried to delve into the legal position of the Force Majeure viz a
viz Lease Agreements thereby putting many woes of landlords and tenants at rest.
The Respondent/ Landlord (hereinafter referred to as ‘Landlord') leased the
property bearing number Shop No. 30-A, Khan Market, New Delhi (hereinafter
referred to as ‘tenanted premises') to the Appellants/Tenants (hereinafter
referred to as ‘Tenants'). The tenanted premises were given on rent to the
Tenants for commercial purposes vide a lease deed executed on 1st February 1975
at Rs.300/- per month.
The Landlord, in 2008, filed an eviction petition under Section 14(1) (e) Delhi
Rent Control Act, 1958 against the Tenants. The decree of eviction was granted
against the tenants by the Ld. Senior Civil Judge-cum-Rent Controller
(hereinafter referred to as ‘Rent Controller') vide the order dated 18th March
2017 (hereinafter referred to as ‘impugned order'). The Tenants moved the Delhi
High Court by way of a Revision Petition challenging the impugned order. On
25th September 2017, the Delhi High Court stayed the eviction decree on the
condition that starting from the month of October 2017; the Tenants shall pay,
to the Landlord, a sum of Rs. 3.5 lacs per month by the 10th day of English
Owing to the COVID-19 crisis, the Tenants moved an Urgent Application in the
Delhi High Court praying for suspension of rent on the ground that the lockdown
has disrupted their business activities.
The Delhi High Court dismissed the said Urgent Application vide order dated
Observations of the Delhi High Court
The Delhi High Court while referring to an inclusive list of the kinds of leases
observed that the question of suspension or waiver of rent applies differently
in each category of lease agreements. The Delhi High Court referred to the
following meaning of the expression Force Majeure
as it is given in the
Black's Law Dictionary: ‘an event or effect that can be neither anticipated nor
Further the Delhi High Court relied on Energy Watchdog v. CERC and
Others wherein it was held that if there is an explicit and clear term in the
contract relating to the Force Majeure
condition, then the contract would be
governed by Section 32 of the Indian Contract Act, 1872 (hereinafter referred to
as ‘ICA') and in cases where the Force Majeure
event occurs outside the
contract, then the same shall be governed by Section 56 of ICA. Applying the
principles of the Energy Watchdog, the Delhi High Court in the instant case
held that the tenant could claim the waiver or suspension of rent only if the
contract consists of a clause which provides for waiver or suspension of rent.
Significantly, the Delhi High Court observed that in cases where the lease
agreement/rent agreement is bereft of the Force Majeure
clause then the tenant
may seek the recourse of Doctrine of Frustration as is encapsulated in Section
56 of ICA. The Delhi High Court relied on Raja Dhruv Dev Chand v. Raja
Harmohinder Singh and Another, wherein the Supreme Court of India
categorically held that Section 56 of ICA is inapplicable to lease agreements as
a lease is a completed conveyance or an executed contract. The above view of the
apex court was reiterated in the cases of T. Lakshmipathi and Others v. P.
Nithyananda Reddy and Others
, and Hotel Leela Venture Ltd. v. Airports
Authority of India
The Delhi High Court then elucidated the doctrine of Force Majeure
vis a vis
Transfer of Property Act, 1882 (hereinafter referred to as ‘TPA'). The doctrine
of Force Majeure
is recognized in Section 108(B) (e) of the TPA. It was
observed that Section 108(B) (e) of the TPA applies only in the absence of
stipulated terms in the contract. In Raja, the apex court observed that the
temporary non-use of the property by the tenant due to any factors would not
entitle him to invoke Section 108(B) (e) of TPA. In Raja
, it was also held
that where the leased property is not destroyed or it is not rendered
substantially and permanently unfit due to fire, tempest, flood, violence of an
army or a mob, or other irresistible force, then in those cases, the tenant
cannot avoid the lease.
Furthermore, the Delhi High Court correctly observed that complete destruction
(permanent in nature) of the property, due to the Force Majeure
event, is the
sine qua non for the tenant to seek the protection of Section 108(B) (e) of TPA.
Further, the possibility of suspension of rent due to the temporary non-use of
the property was also looked into by the High Court of Delhi.
The Delhi High
Court, relying on Surendra Nath Bibran v. Stephen Court
 held that the grant
of suspension of rent would depend on facts and circumstances of each case.
It is imperative to note that the Delhi High Court allowed the tenants to
postpone the rent and directed the tenants to pay the rent 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.
This decision of the Delhi High Court has cleared the air on the applicability
of Section 32 of ICA, Section 56 of ICA, and Section 108(B) (e) of TPA on the
lease agreements. It is now clear by the aforesaid decision that Section 56 of
ICA does not apply to lease agreements. Further, the applicability of Section
108(B)(e) of TPA is subject to the leased property being substantially and
permanently destructed due to the Force Majeure
- RC. Rev. 447/2017.
- (2017) 14 SCC 80.
- AIR 1968 SC 1024.
- (2003) 5 SCC 150.
- 2016 (160) DRJ 186.
- Supra, note 3.
- AIR 1966 SC 1361.