N.Sivabalan vs. The Chairman And Managing Director

Facts

The petitioner, N. Sivabalan, was granted a license to manage a canteen at the Kanyakumari Ferry Service, operated by Poombugar Shipping Corporation Limited. The license agreement, effective from January 15, 2020, stipulated a payment of Rs. 35,500 per month, inclusive of GST, for five years. Following the nationwide lockdown in response to the COVID-19 pandemic in late March 2020, the ferry service and consequently the canteen were closed. The petitioner sought exemption from paying canteen rent during this closure period, citing a government order (G.O.(D).No. 298) that provided for waiver of lease/rental amounts for April and May 2020. The petitioner had made a representation to the respondents on May 15, 2020, seeking this exemption. The respondents did not appear before the court.

Held

The Court acknowledged the petitioner's plea for exemption from canteen rent during the closure period due to the COVID-19 pandemic. The Court noted its previous order in W.P.(MD)No.19619 of 2020, which granted similar relief to licensees unable to operate due to lockdown restrictions, and that this order was upheld by a Division Bench. However, the Court also observed that the matter of license fee waiver during the pandemic was under consideration by the Hon'ble Supreme Court, which had passed an interim order. Given that the Supreme Court was seized of the issue, the High Court deemed it inappropriate to pass a comprehensive order. Therefore, the Court directed that no coercive action be taken against the petitioner regarding the license fee for the closure period. The respondent Corporation was instructed to pass a speaking order afresh, based on the decision to be rendered by the Hon'ble Supreme Court, which the petitioner would be bound by. No specific finding was made on the entitlement to exemption, pending the Supreme Court's decision.

Key Issues

1. Whether the petitioner is entitled to an exemption from paying canteen rent during the period of closure of the Kanyakumari Ferry Service due to the COVID-19 pandemic lockdown? (Question of law and fact, turning on principles of contract law, force majeure, and government policy). Petitioner's arguments: The petitioner contended that the closure of the ferry service, and by extension their canteen, was due to a government-imposed lockdown, making it impossible to operate. They relied on G.O.(D).No. 298, which provided for waiver of lease/rental amounts for a specific period during the pandemic. They also referred to a previous order by the same court in W.P.(MD)No.19619 of 2020, which held that licensees could not be compelled to pay license fees when their businesses were restrained from opening, and that this order was confirmed by a Division Bench. The petitioner argued that the lockdown continued beyond the period covered by the G.O. Revenue/State's arguments: No arguments were recorded for the respondents as they did not appear.