Appellate Authority dismisses hotel's plea

Ramkrishan Upadhyay

Tribune News Chandigarh

Chandigarh, April 7

Rajeev K Beri Appellate Authority, Chandigarh, has dismissed an appeal of Fleur Hotels Private Limited, challenging the order of the Rent Controller to pay a total of Rs 7,67,76,500 as provisional rent to landlord Hind Motors.

This is perhaps the highest ever amount the Rent Controller has directed to pay to the landlord in any rent petition case in the District Courts recently.

The Rent Controller had fixed the provision rent on the rent petition filed by Hind Motors for the eviction of the tenants for nonpayment of the rent and directed to pay the amount as provisional rent at the rate of Rs33 lakh per month from May 1, 2020, till February 28, 2022, to the landlord before the court.

Challenging the order, the counsel of Fleur Hotels argued that the order was totally illegal and erroneous and had been passed by the Rent Controller ignoring the legal and factual position involved. The company has terminated the lease as per the lease agreement signed between the parties. He said the lease commenced from June 1, 2019, and the rate of rent was fixed at Rs33 lakh per month, and the company had also paid over Rs 11.47 crore to the landlord as refundable security. He said as per the agreement, the lease could be terminated in case it was impossible for lessee to operate the hotel due to default on the part of lessor or due to force majeure event.

He said due to the Covid-19 pandemic, the tenants were unable to run the premises taken on lease for the purpose. For this reason, they sent termination notices dated May 24, 2020, to the landlord which were not responded. The lessor had refused to take possession of the premises from these lessees. The tenants had, therefore, the right to keep possession of the premises without paying rent.

Pradeep Bedi, counsel for the landlord, said the tenants could not terminate the lease on their own when such action was not supported by any agreed term contained in this lease deed. The total lease period was 27 years. The tenants themselves applied to the Local Administration to run this hotel as a quarantine centre during the pandemic on May 11, 2020.

The Administration had approved this request to which the confirmation was submitted by the tenants on that day itself. It was never closed for a continuous period of over 30 days. Therefore, the tenants were not within their rights to terminate the tenancy by invoking Article 20 of the lease deed on May 24, 2020.

After hearing the arguments, the Appellate Authority dismissed the appeal saying that at this nascent stage of proceedings, it is suffice to say that prima facie the condition of Covid-19 pandemic is not covered by the term force majeure duly detailed out in Article 21.1 of this lease deed.

“Parties are yet to lead their evidence with regard to their allegations/counter allegations. Matter will be adjudicated by the Rent Controller on the basis of the same ultimately. At the initial stage of trial, the Rent Controller was duty bound to assess the provisional rent especially in view of admitted terms of tenancy, rate of rent and even the period relating to which the rent is not paid by the tenants. The impugned order, therefore, was correctly passed by the Rent Controller keeping in view the legal and factual position. There is nothing illegal or perverse in the impugned order,” says the order.

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