The Madras High Court declared that the lockdown constituted a Force Majeure event and as such relieved a trader from paying a license fee to their respective municipal corporation.
A force majeure event is one where an unforeseeable circumstance can prevent someone from fulfilling their contract.
A Madurai bench of the Madras HC gave the ruling in the favour of the petitioner. R Narayan was the petitioner whose shops were licensed by the municipal corporation. Justice GR Swaminathan was heading the bench.
The judge in the case described a force majeure clause as one where a certain specified event would excuse either of the parties from performing their duties.
The judge thus held that by Section 51 and 54 of the Indian Contract Act 1872, the lockdown that the country underwent due to COVID-19 satisfied the conditions of being a force majeure.
By the application of the two sections the judge stated that the municipality had directed the licensee to show down the shop, it could then not demand a fee in the duration of that period.
The municipal corporation in their defence had spoken of how even though the shop was not allowed to be opened, since the government’s provision only provided for waiving off the fee for certain months, the petitioner’s point was invalid.
However, the judge said that they could not have a blinkered vision even if the secretary to the government did not deem it necessary to go beyond the terms of the CMA’s request.