Harshan Hassan P.M. vs. The Goverment Of Tamil Nadu

Facts

The petitioner, P.M. Harshan Hassan, was the successful bidder for Shop No.9 at Anna Bus Stand, Nagercoil, agreeing to pay a monthly license fee of Rs. 1,27,500/- plus 18% GST for a three-year period. The Nagercoil Municipal Corporation collected one year's license fee in advance, along with substantial deposits. Due to the COVID-19 pandemic and subsequent government-imposed lockdown regulations, the bus stand and all shops were closed from March 24, 2020, to September 6, 2020, preventing the petitioner from operating his business and causing financial loss. The petitioner sought a waiver of license fees for this period and a revision for the subsequent period. The respondents contended that the contractual obligation to pay was absolute. The Government had previously issued a G.O. waiving lease/rental amounts for April and May 2020.

Held

The Court held that the petitioner is entitled to a complete waiver of license fees for the period of total lockdown from March 24, 2020, to September 6, 2020. The Court reasoned that the respondents themselves treated the lockdown as a force majeure event by issuing G.O.(D)No.298, which waived fees for April and May 2020. The Court found this waiver inadequate given the complete closure of the business during the entire lockdown period. The Court also held that the petitioner is entitled to seek a revision of the license fee for the period subsequent to September 6, 2020, when lockdown restrictions were partially lifted. The Court directed the petitioner to submit a fresh representation for this period, which the fourth respondent would forward with their proposal to the relevant authorities for consideration and appropriate orders. The ratio decidendi is that when a supervening event, like a government-mandated lockdown due to a pandemic, renders contractual performance impossible or radically different, courts can grant relief beyond the scope of existing government orders to ensure substantial justice, especially when the government itself acknowledges the event as a force majeure.

Key Issues

1. Whether the petitioner is entitled to a complete waiver of license fees for the period of total lockdown from March 24, 2020, to September 6, 2020, under the principles of frustration of contract or force majeure, considering the pandemic-related restrictions imposed by the government, and whether the existing Government Order (G.O.) providing partial waiver is inadequate. Petitioner's arguments: The lockdown rendered the performance of the contract impossible, akin to frustration or force majeure. The G.O. issued by the government, while acknowledging the hardship, provided insufficient relief, as the business was completely shut down during the entire lockdown period. The contractual clause stating no excuse for payment should not override fundamental principles of justice when performance is rendered impossible by external events. Respondents' arguments: The contractual obligation to pay the monthly license fee is absolute and not excused by any supervening event. The petitioner has not challenged the G.O. which provides a limited waiver, and therefore, relief cannot be granted beyond its scope. The relationship is contractual, and the terms of the contract must be adhered to.