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.

JUDGMENT

Chandra Dhari Singh, J.

1. The instant plaint has been filed on behalf of the plaintiffs seeking the following reliefs:

"a) Pass a decree thereby declaring the alleged termination of lease deed dated 4.10.2017 vide letter dated 27.06.2020 as bad in law and not binding upon the parties.

b) Pass a decree declaring the said lease deed dated 4.10.2017 as continuing, subsisting and binding upon the parties;

c) Decree in favour of the plaintiffs and against the defendants towards the payment of arrears of rent to the tune of Rs.5,38,75,117/-

d) Grant pendente-lite and future interest in favour of the plaintiff and 12% P.A on the said amount.

e) Pass a decree in favour of the Plaintiffs and against the Defendant thereby directing the Defendant to pay the interest on the delayed amount from the date of filing of the present suit and till the date of its actual realization;

OR IN THE ALTERNATIVE TO PRAYERS A TO E

f) In case the Hon'ble court comes to the conclusion that the termination is valid, the Hon'ble court may kindly be pleased to

g) Grant pendente lite and future interest in favour of plaintiff and 12 % P.A on the said amount.

h) Award costs of the suit throughout in favour of Plaintiffs and against the defendant; &

i) Pass any further order/orders in favour of Plaintiffs and against the defendants."

FACTUAL MATRIX

2. Defendant is a company incorporated under the provisions of the Companies Act, 1956 and is engaged in the business of operation and management of hotel and serviced apartments.

3. Plaintiffs and defendant entered into a Perpetual Lease Deed (First Lease Deed) on 25th September 2017 for an aggregated area admeasuring super area of 2009 sq. ft. and having a covered area of 1205 ft. situated on the 2nd floor bearing residential Service Apartment No. 2004 of Block A/New Tower ("Premises").

4. The plaintiffs paid an amount of Rs. 6,70,00,000/- as a consolidated one-time consideration for the lease of the premises and as one time rent amount. The plaintiffs also paid an agreed annual rent reserved of Rs. 1 in advance for a period of 99 years simultaneous with the execution of the lease. It was also agreed that the lease will automatically renew for a successive term of 99 years till perpetuity.

5. Plaintiffs and defendant also entered into a Sub-Lease Deed (Second Lease Deed) of the suit property on 4th October 2017 for a period of 11 years from the lease at a monthly rent of Rs. 9,58,000/- with commencement date of 1st October 2017 by which the defendant took back the premises on rent from the plaintiff.

6. As per the terms agreed between the parties, laid therein, the Sub- Lease Deed could not be terminated by the defendant during the initial 11 years of the execution of the deed and even after that the same could be terminated by giving a notice of 6 months in advance. The deed could be terminated prior to the expiry of the lock-in period only in the case of violation and breach of the terms of the deed by the plaintiffs which if not cured by the plaintiff within 30 days of receipt of notice from the defendant in this regard.

7. Relying on the Clause 15.2 of the Sub-Lease Deed, which enumerates the termination of the Contract on the Force Majeure Clause, the defendant terminated the lease by Notice of Termination dated 27th June 2020 referring to the Government regulations passed during the COVID-19 pandemic leading to the closure of non-essential activities, hospitality sector in the present case. The major contention of the defendant is that the restriction to the access to the leased premises due to governmental regulations in the pandemic period led to the frustration of the Contract. Due to this frustration of Contract the defendant did not pay the rent mandated under the Sub-Lease Deed for the remaining lock-in period and claims that the lease was terminated on 27th June 2020 only.

8. Aggrieved by the said termination, the present suit has been filed by the plaintiffs for the recovery of the arrears of re