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2022 Supreme(Online)(KER) 7613
HIGH COURT OF KERALA
ANIL K. NARENDRAN, P. G. Ajithkumar, JJ
ANIL NARAYAN – Appellant
Versus
TRAVANCORE DEVASWOM BOARD – Respondent
WP(C)/26607/2021
R.BINDU (SASTHAMANGALAM), G.RAJAGOPAL (KUMMANAM), C.THEJUS PURUSHOTHAMAN, G.SANTHOSH KUMAR (P). 2) THE CHIEF ENGINEERAdvocate
The obligation to pay rent under a lease survives despite temporary impossibility to operate the business; contractual obligations remain unless legally frustrated.
Headnote:
Contract - Lease Agreement - Indian Contract Act, 1872 - Sections 56, 65 - The court held that the petitioner is liable to pay rent despite closure due to Covid-19 restrictions, as the lease terms remained binding and impossibility of performance did not apply.
Fact of the Case:
The petitioner, operating a hotel under a lease deed, was issued a notice for unpaid rent during periods of government-mandated closure due to Covid-19. The petitioner sought to quash the notice, arguing he shouldn't pay rent for that period.
Finding of the Court:
The court found that the lease agreement remained enforceable and that the closure due to the pandemic did not render the contract impossible, thus the petitioner is liable for the arrears with applicable interest.
Issues: Whether the petitioner is liable to pay rent for the period the hotel was closed due to government restrictions related to Covid-19.
Ratio Decidendi: The court ruled that a lease agreement obliges tenants to pay rent regardless of operational difficulties caused by external events such as a pandemic unless a true impossibility of performance is demonstrated.
Final Decision: The petitioner's claim for exemption from paying rent due to Covid-19 restrictions was denied; the outstanding amount was ordered to be paid in installments.
JUDGMENT
Anil K. Narendran, J.
The petitioner is running a hotel in four rooms (hall of the ground floor) of Kalangara Memorial Building owned by the 1st respondent Travancore Devaswom Board, near Anandavalleeswaram Temple, on the strength of Ext.P1 lease deed dated 01.05.2017. The petitioner has been issued with Ext.P2 communication dated 28.07.2021 of the 4th respondent Assistant Devaswom Commissioner, wherein it is stated that he has defaulted rent for the last one year and therefore, he should remit the arrears of rent together with penal interest, within seven days from the date of receipt of that communication. On receipt of Ext.P2, the petitioner submitted a reply. The petitioner has filed this writ petition under Article 226 of the Constitution of India, seeking a writ of certiorari to quash Ext.P2. The petitioner has also sought for a declaration that he is not liable to pay rent to the 1st respondent for the rooms leased out vide Ext.P1 lease agreement, for the period during which he was forced to close down his hotel consequent to the directions issued by the State Government, by invoking the provisions of the Epidemic Disease Act, 1897, due to Covid pandemic. The further relief sought for is a writ of mandamus commanding the respondents to permit the petitioner to remit the rent for the rooms leased out to him vide Ext.P1 lease agreement, excluding the period during which he could not open the hotel due to the restrictions imposed by the State Government.
2. On 25.11.2021, when this writ petition came up for admission, the learned Standing Counsel for Travancore Devaswom Board sought time to get instructions and file statement.
3. On 13.12.2021, a statement has been filed by the learned Standing Counsel, on behalf of the respondents, opposing the reliefs sought for in this writ petition, wherein it is stated that the arrears of rent as on November, 2021 comes to Rs.28,64,326/-. The petitioner has filed reply affidavit dated 04.01.2022.
4. On 09.03.2022, when this writ petition came up for consideration, the learned Standing Counsel for Travancore Devaswom Board submitted that a statement showing arrears of rent with interest at the rate of 12%, as provided in clause (ii) of Ext.P1 lease deed, shall be filed by 15.03.2022.
5. The learned Standing Counsel has filed an additional statement dated 15.03.2022, producing therewith Annexure R1(b) showing the revised arrears of rent payable by the petitioner after deducting the arrears due to Covid-19 pandemic for a period of three months and re-calculating the rate of interest as 12% instead of 18%. As per the said statement, the total arrears of rent including March 2022 comes to Rs.26,70,844/-. Adding Rs.2,97,414/- towards interest, the total arrears payable comes to Rs.29,68,258/-.
6. Heard the learned counsel for the petitioner and also the learned Standing Counsel for the respondents.
7. The learned counsel for the petitioner would contend that on account of the closure of the Temple in question due to outbreak of Covid-19 pandemic, the petitioner could not run the hotel from March, 2020 to October, 2020 and thereafter, from March, 2021 to September, 2021. In such circumstances, the petitioner is not liable to pay rent to the 1st respondent Board for the period during which the hotel was closed down due to the restrictions imposed by the Government of Kerala. Therefore, interference is warranted on Ext.P2 notice issued by the 4th respondent Assistant Devaswom Commissioner. Per contra, the learned Standing Counsel for the Travancore Devaswom Board would contend that the petitioner is legally bound to pay monthly rent in terms of the conditions stipulated in Ext.P1 lease agreement and in case of default, he is liable to pay interest for delayed payment at the rate of 12% prescribed in clause (ii) of Ext.P1 lease deed dated 01.05.2017. The contention of the petitioner that he is not liable to pay rent for the period during which the hotel was closed down due to the restriction
