The World Health Organization officially declared Covid-19/ coronavirus as a
on the 11thof March 2020. As this battle against the outbreak of
the virus continues unabated, a plethora of suits have been filed by the tenants
across the country demanding a waiver / suspension of rent owing to the stoppage
of various business activities because of the economic distress that has
engulfed due to isolation necessitated by the spread of the novel coronavirus,
diminishing their financial capacity to make rental payments as per the timeline
stipulated in their respective agreements.
In the light of the financial crisis penetrated due to Covid-19, courts are very
much aware of the fact that the pandemic is a severe exogenous shock which has
caused disruptions beyond human apprehensions but the main question which they
have to ascertain is whether the lockdown would actually entitle the tenants to
claim waiver or exemption from the payment of rent or suspension of rent.
The courts are of the perception that although there is no standard rule for
addressing these cases but however a few broad parameters have to be borne in
mind while deciding the disputes. It is crucial to analyze whether the present
day situation posed by Covid-19 would qualify as Force Majeure
The term ‘force majeure’ has been defined in the Black’s Law Dictionary as ‘an
event or effect that can be neither anticipated nor controlled.’ Some examples
of force majeure events can be any kind of natural disasters like flood,
earthquakes, quarantine, war etc.
The courts are also of the view that questions relating to waiver or suspension
of rental payments would operate differently for each category of agreements.
Various factors have to be taken into cognizance for eg. Whether there is a
contract, whether a force majeure clause has been incorporated which extends to
permitting suspension of rent, the precise language of the clause and if there
is no contract executed between the parties or if there is an absence of a force
majeure clause then the issues have to be determined according to the applicable
It can be deduced that amidst the looming uncertainty resulting from the
unfavorable circumstances, it would be advisable for the parties to come forward
and renegotiate the terms of their agreements and endeavor to resolve their
disputes amicably. Paying heed to the fact that since all the businesses and
other commercial activities have come to a grinding halt , the economy today
stands paralyzed due to which generating revenue in any sector has become a
Also, pertaining to the various transactions / agreements entered into between
the parties, fulfilling the obligations thereunder is becoming impossible,
further leading to non-compliance with the terms. The landlords as well as the
tenants have been left in a lurch today, as the tenants are seeking waiver/
suspension of rent while the landlords also cannot be put in peril by compelling
them to allow remission /suspension of rent, as they too have to pay maintenance
charges and property tax.
Though the country heaved a sigh of relief with the unclogging of the economy
but it cannot be denied that even after the lockdown is entirely lifted, it will
take some time to restore economic momentum.
In dire situations like these, when litigations emerge before the courts, it is
left up to their discretion as to the manner they wish to adopt in order to
adjudicate the matter, whether by placing reliance upon the force majeure clause
and not travelling beyond the four corners of the agreement entered into between
the parties , or if there is no contract at all or no specific clause then
deciding the same by the applicable law or either by empathizing with any
particular party, taking into account the financial dilemma faced by him due to
the current global phenomenon and thereby granting him some relief for the time
However in sensitive matters like these, some reasonableness is expected to be
exercised by the judicial system while passing judgments/orders, accompanied
with laying down adequate factors for favoring/ disfavoring any party after
having considered the facts and circumstances of each case.
Award Winning Article Is Written By: Ms.Nirali Deepak Parekh
Authentication No: NV31900237906-15-1120