A force majeure clause may apply to contract obligations if unforeseen circumstances, such as a pandemic, prevent performance, potentially allowing for reductions in contractual fees.

JUDGMENT

V. Kameswar Rao, J. (Oral)

CM APPL. 5951/2022 in W.P.(C) 2067/2022

CM APPL. 5953/2022 in W.P.(C) 2068/2022

1. These applications have been filed seeking a restraint order against the respondent from demanding/recovering the payment of Rs.4,75,01,672/- (W.P.(C) 2067/2022) and Rs.2,10,63,888/- (W.P.(C) 2068/2022) from the petitioner and with a further direction that the respondent be restrained from taking any coercive action for non-payment of the aforesaid amounts. It is the submission of Mr. Kirti Uppal, learned Senior Counsel for the petitioner, that the petitioner was awarded two contracts with regard to car parking sites at Shivaji Place, West Delhi, District Centre, Raja Garden, Delhi (W.P.(C) 2067/2022) and G-Block, Jahangir Puri, behind Kusal Cinema (W.P.(C) 2068/2022) on payment of licence fee of Rs.13,97,108/- and Rs.5,85,108/- per month, respectively. The possession of both the sites were handed over to the petitioner on July 27, 2019 and August 28, 2019, respectively. According to him, formal agreements with respect to the aforesaid parking sites were executed. Pursuant thereto, as various problems were being faced by the petitioner at the parking sites, he made representations for reduction of the licence fee. The said requests were rejected by the respondent vide letters dated February 28, 2020 and December 28, 2019, respectively.

2. Mr. Uppal states that it is common knowledge that in March, 2020, the country was hit by COVID-19 resulting incomplete to partial lockdown which is still continuing; which made the petitioner write to the respondent requesting it to reduce the monthly licence fee of the parking sites and not to present for clearance, the post-dated cheques issued by the petitioner. Mr. Uppal by drawing my attention to Clause 18 of the contract, submits that the request made by the petitioner for reduction of licence fee is justified because COVID-19 is a force majeure condition inasmuch as the parking sites remained closed on account of reasons beyond the petitioner's control. He states communications were made to the respondent to treat the contract as cancelled/frustrated/unenforceable. Unfortunately, without considering the request, the respondent vide letters dated July 23, 2020 and July 08, 2020, demanded the post-dated cheques for the year 2020-2021. In fact, Mr. Uppal submits that immediately thereafter on August 04, 2020, the North Delhi Municipal Corporation had issued an order granting relief to parking contractors for the period starting from March 22, 2020. It is also his submission that similar action was taken by various other statutory bodies. The petitioner did write to the respondent stating that without reduction of licence fee, the post-dated cheques are not payable. He also submits that on November 23, 2020, the Chairman of the respondent organisation had constituted a committee to examine the applications received from various contractors including parking contractors in relation to loss of business due to COVID-19. In terms of deliberations of the committee, it has been conveyed to all the concerned Area Engineers that they were to submit a status report up to December 01, 2020 with regard to whether parking sites are in residential, commercial or mixed areas and whether parking sites were running during the period of lockdown.

3. According to Mr. Uppal, without following the process, the respondent issued show cause notices to the petitioner stating that he has breached Clauses 23, 24 and 25 of the terms and conditions of the contr