R.Narayanan Vs. The Government of Tamil Nadu and Ors. - (High Court of Madras) (05 Feb 2021)

Despite the stipulation of absolute performance casted upon the licensee, lockdown shall be treated as a force majeure event for performance of obligation under the contract.

MANU/TN/0330/2021

Contract

Petitioner a successful bidder and licensee of one of the shops of the respondent had paid one year advance license fee to the respondent. Following the outbreak of COVID-19, the petitioner has suffered considerable financial loss due to which the petitioner did not get his license renewed even though there was a clause providing for it. The petitioner filed a petition demanding waiver of the license fee for the lockdown period and partial waiver of subsequent period.

The issue in the instant case was whether notwithstanding the stipulation of absolute performance casted upon the licensee, this court would be justified in treating the lockdown as a force majeure event which will relieve the licensee from performing his obligations to the corresponding event.

The court observed that although the license agreement between the petitioner and the respondents did not have an express ‘force majeure’ clause, the COVID-19 pandemic has to be treated as a force majeure event. Since, the local body itself directed the shutting down of the bus stand and the shops, it cannot demand license fee during the period when the shop remained close.

The court criticized the order on the recommendation of Commissioner of Municipal Administration to grant two months waiver of license fee on account of lockdown as it would have been made without considering the fact that the lockdown was further extended.Hence, the court while allowing the writ petition directed the complete waiver of license fee from March 24 to September 6, 2020.

Tags : FORCE MAJEURE LOCKDOWN