IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G.S. Kulkarni, J.
Deluxe Caterers Pvt. Limited & Ors. – Appellants
Versus
Narayani Associates & Ors. – Respondents
Appeal from Order No. 944 of 2022 in Notice of Motion No. 2577 of 2022 in Suit No. 1644 of 2022, Interim Application No. 18715 of 2022
Decided On : 17-02-2023
CONTRACT - FORCE MAJEURE - EXTENSION OF TERM - INTERPRETATION OF CLAUSE - NO IMPLIED EXTENSION OF TERM DUE TO FORCE MAJEURE - NO MODIFICATION OF CONTRACT BY EXCHANGE OF LETTERS - NO RIGHT TO INJUNCTION AFTER EXPIRY OF TERM.
Fact of the Case:
Appellant invoked force majeure clause due to COVID-19 pandemic, seeking exemption from payments and extension of term. Respondent accepted the notice but asserted its right to terminate if obligations remained unfulfilled. Appellant continued to occupy the premises and requested waiver of rentals during the lockdown, which was denied. Respondent issued a notice informing appellant that the agreement would expire on 30 September 2022, and appellant was required to vacate the premises. Appellant filed a suit seeking, inter alia, a declaration that the term of the agreement stood extended and an injunction restraining respondents from interfering with its possession.
Finding of the Court:
The force majeure clause provided for termination of the agreement if either party was unable to perform its obligations for more than 60 days due to force majeure. The exchange of letters between the parties did not constitute a modification of the agreement or an extension of the term. The appellant failed to make out a prima facie case for an injunction to restrain the respondents from interfering with its possession after the expiry of the term.
Issues: Whether the invocation of the force majeure clause by the appellant extended the term of the agreement.
Ratio Decidendi: The force majeure clause provided for termination of the agreement if either party was unable to perform its obligations for more than 60 days due to force majeure. The exchange of letters between the parties did not constitute a modification of the agreement or an extension of the term. The appellant failed to make out a prima facie case for an injunction to restrain the respondents from interfering with its possession after the expiry of the term.
Final Decision: Appeal dismissed.
JUDGMENT
G. S. Kulkarni, J. - This Appeal from Order assails an order dated 27 September, 2022 passed by the City Civil Court at Mumbai whereby Notice of Motion No. 2577 of 2022 filed by the appellant(original plaintiff) in Suit No. 1644 of 2022 has been dismissed.
2. A short issue which arises for consideration in this appeal is as to whether the term of the Conducting Agreement (for short 'the Agreement') dated 20 November, 2017 entered, between respondent no. 1 and the appellant would stand extended by virtue of the appellant invoking the force majeure clause.
3. The facts relevant for adjudication of this appeal are: Respondent nos. 2 and 3 (original defendant nos. 2 and 3) are owners of two units, bearing Unit Nos. 4129 and 4130 situated on the ground floor (part) of the building known as 'Kalaghoda Buildings Bhadekaru Cooperative Premises Society Ltd.' situated at 30, K. Dubash Marg, Kalaghoda, Fort, Mumbai - 400 001(for short 'suit premises'). Respondent nos. 2 and 3 have let out the suit premises on leave and licence to respondent no. 1 (original defendant no. 1) under a registered Leave and Licence Agreement dated 18 October, 2017. In turn, respondent no. 1 with the consent, permission and authorization of respondent nos. 2 and 3 has entered into the suit agreement dated 20 November, 2017 with the appellant whereunder respondent no. 1 has permitted and authorized the appellant to use and occupy the suit premises for the purpose of running and operating its restaurant known as 'Copper Chimney', on terms and conditions as agreed between the parties and as contained in the Agreement. The agreement describes the appellant as 'Conductor' and respondent no. 1 as 'Narayani'. Under Article 6 of the agreement, the parties have agreed that the appellant shall inter alia pay respondent no. 1 a fixed fee of Rs.6,00,000/- per month and in addition to the Fixed Conducting Fee, the appellant was to pay an additional fee equivalent to 18% of Net Annual Turnover above Rs.200 lakhs for the financial year 2017-2018 and with agreed increases as set out in Article 6.2 thereof; under Article 7, it was agreed between the parties that under the Leave and Licence Agreement entered between respondent nos. 2 and 3 and respondent no. 1, respondent no. 1 was entitled to use and occupy the suit premises for a period of five years, effective from 1 October, 2017 and expiring on 30 September, 2022, being the licencee of the suit premises. The period of the Conducting Agreement as agreed between respondent no. 1 and appellant as recorded in 'Clause 16' was from 1 October, 2017 till 30 September, 2022. Article 19 of the Agreement is the 'Force Majeure' Clause. Article 32 of the agreement is a Clause in regard to 'No Oral Change'. These being the relevant clauses and subject matter of discussion at the bar, the same are required to be noted hereunder:
In the event either Party is unable to perform its obligations under this Agreement for a period greater than 60 (sixty) days as a result of any failure or delay where such failure or delay is due to any cause or causes beyond its control, including but not limited to flood, damage by the elements, act of God, strike, lock out or other labour disorders, act of foreign or domestic de jure or de facto Government, whether by law, order, legislation, decree, rule, regulation or otherwise revolution, civil distrubance, breach of the peace, declared or undeclared war, act of interference or action by civil or military authorities, terrorist acts, or due to any other cause beyond the Party's control notwithstanding what is stated hereinabove, the other Party shall be entitled to fortwith terminate this Agreement.
Article 32 NO ORAL CHANGE
This Agreement cannot be changed, modified or supplemented in any manner except by an instrument in writing duly executed by the Parties. Any amendment, addition or variation to this Agreement shall be valid and binding only if the same are mutually agreed u
Dhanrajamal Gobindram vs. Shamji Kalidas and Co. AIR 1961 SC 1285
Energy Watchdog vs. Central ectricity Regulatory Commission and Others (2017) 14 SCC 80
M/s Alopi Parshad & Sons Ltd. vs. Union of India
Naihati Jute Mills Ltd. vs. Khyaliram Jagannath AIR 1968 SC 522
The ruling establishes that COVID-19 lockdown constituted a Force Majeure event, justifying non-payment of rent and validating lease termination under specified contractual terms.
The court held that the COVID-19 pandemic constituted a force majeure event under the Lease Deed and that the defendants were entitled to the benefit of the force majeure clause insofar as payment of....
Government regulations prohibiting access to leased premises during the COVID-19 pandemic constituted a Force Majeure event, excusing the defendant's performance under the lease agreement.
The main legal point established in the judgment is that the conclusion of a contract can occur upon the award of work, and non-compliance with tender and contract terms can justify contract terminat....
The court remanded the case to reconsider the plea of force majeure, recognizing the developer's claim of Covid-19 related delays in complying with a settlement agreement timeline.
The court confirmed that COVID-19 constituted a Force Majeure event impacting the financial obligations under the OMDA, allowing for necessary contractual reliefs and interpreting the agreement in a ....
Writ Court in exercise of its extraordinary jurisdiction cannot adjudicate upon disputed questions of fact inasmuch as claim of petitioner regarding occurrence of event leading to a Force Majeure sit....
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.