The force majeure clause in the Leave and License Agreement excused the Defendant from paying license fees during the COVID-19 lockdown, and the contract was not severable, maintaining the obligation to pay for the entire premises.

JUDGMENT :

SHARMILA U. DESHMUKH, J.

1. Rule. Rule made returnable forthwith and heard finally with consent of the parties.

2. By this petition filed under Article 227 of Constitution of India, the challenge is to the order dated 3rd January 2022 passed by the Appellate Bench of the Small Causes Court, Mumbai in Revision Application No. 40 of 2021 setting aside the order of the Trial Court rejecting the application for interim relief. For the sake of convenience, parties are referred to by their status before the trial Court.

Facts:

3. L.E. & Suit No. 29/2020 was instituted seeking the following substantial reliefs:

“(a) this Hon’ble Court be pleased to declare that the Leave and License Agreement dated 17 May 2019 and Deed of Rectification dated 30 September 2019 are valid and subsisting.

(b) this Hon’ble Court be pleased to declare that the proposed surrender of 8th and 7th floors of Chomium Building being 56,030 sq. feet. by the Defendant No. 1 in its e-mail dated 22 July 2020 is bad in law.

(c) this Hon’ble Court be pleased to pass suitable order and decree directing the Defendant No. 1 to specifically perform the Leave and License Agreement dated 17 May 2019 read with Deed of Rectification dated 30 September 2019.

(d) this Hon’ble Court be pleased to pass suitable order and decree directing the Defendant No. 1 to pay to the Plaintiff the arrears of License Fees and other charges for the months of April 2020, May 2020, 1 June 2020 to 7 June 2020, July 2020 and residue license fee for the month of August 2020 as per Exhibits “G-1”, “N-2”, “R-2”, “V-2”, “Z-2” annexed hereto along with interest at the rate of 18% per annum from the due date of the respective month till actual payment and/or realisation, as per Particulars of claim being Exhibit “AA” annexed hereto.

(e) this Hon’ble Court be pleased to pass suitable order and decree directing the Defendant No. 1 to pay to the Plaintiff the arrears of License Fees and other charges for the succeeding months from August 2020 under the Leave and License Agreement dated 17 May 2019.

(f) this Hon’ble Court be pleased to pass suitable order and decree directing the Defendant No. 1 to pay to the Plaintiff contractual rate of interest of 18% p.a. on the arrears of License Fees and other charges for the succeeding months from August 2020, from due date of payment of license fee of each month till payment and/or realization.”

4. Vide leave and license agreement dated 17th May 2019 read with Deed of Rectification dated 30th September 2019, license was granted by the plaintiffs for use and occupation by Defendant No. 1 of the building known as “Chromium Building” from ground floor to 8th floor for a period of 10 years with lock-in-period of 60 months. As regards the 9th floor of the building, the agreement was that license in respect of the 9th floor will be granted upon receipt of full occupation certificate. The license free period was 10 months and thereafter monthly compensation was agreed to be paid @ Rs. 105/- per square feet from 11th month to 36th month with escalation @ 12% p.a. after expiry of every three years. In the month of February-March 2020 there was an outbreak of Covid-2019 pandemic. Vide order dated 20th March 2020, MCGM directed the commercial establishments such as Defendant No 1’s establishment to close their facility.

5. On 21st March 2020, notice was issued by Defendant No 1 to the plaintiff in terms of Clause 22.1 and 22.4 of the leave and license agreement (for short “the agreement”) invoking the force majeure clause seeking recusal from the performance of obligations including obligation to make payment of the rent and other charges payable under the agreement w.e.f. 21st March 2020. On 23rd March 2020, lockdown was declared in the State whereby except essential services in the State, all private establishments were ordered to remain shut. On 28th March 2020, the plaintiff responded to the communication dated 21st March 2020 stating that no situation has occurred which inter