Dismissed

K.Satish, v. The State of Andhra Pradesh

Andhra Pradesh HC13 Jul 2021WP/3171/2021

Case brief

AI extract

What is this about?

High Court rejected claims for license fee refund or lease extension by temple shop licensees citing force majeure, noting the temple reopened in June 2020 with substantial footfall and prior agreements for extensions.

What did the court decide?

Reliefs sought for refund of license fee and extension of lease period were dismissed.

K.Satish, Vs The State of Andhra… — Contract and Commercial Disputes | Andhra Pradesh HC (2021)

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HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO WRIT PETITION Nos.3099 + 3171 & 3901 of 2021 COMMON ORDER:

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The writ petitioner in W.P.No.3171 of 2021 had obtained license from the 3^rd respondent-temple to run the main canteen for the period from 18.10.2018 to 17.10.2020 in the auction conducted by the 3^rd respondent on 26.07.2018, for an amount of Rs.6,00,000/- (Rupees six lakhs only) per month for the first year with enhancement of 10% for the second year. The petitioner paid Rs.1,36,74,000/- (Rupees one crore thirty six lakhs and seventy four thousand only) as advance license fee for this period. The petitioner claims that on account of the Covid19 Pandemic, the canteen was shutdown from 20.03.2020 and was not reopened for the remaining part of the license period. Accordingly, the petitioner was liable to pay Rs.72,00,000/(Rupees seventy two lakhs only) at the rate of Rs.6,00,000/(Rupees six lakhs only) per month for the period from 18.10.2018 to 18.10.2019. Similarly, he was liable to pay an amount of Rs.33,00,000/- (Rupees thirty three lakhs only) for the five months period between 19.10.2019 to 19.03.2020 at the rate of Rs.6,60,000/- (Rupees six lakhs and sixty thousand only) per month. The case of the petitioner is that this would aggregate to Rs.1,05,00,000/- (Rupees one crore and five lakhs only) and the balance of Rs.31,74,000/- (Rupees thirty one lakhs and seventy four thousand only) lying with the 3^rd

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RRR,J2 W.P.No.3099_3171_3901 of 2020

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respondent has to be refunded as the lease period could not be utilized due to the Covid-19 Pandemic.

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The writ petitioner in W.P.No.3099 of 2021 was given the license to run the sub-canteen for the period from 01.03.2020 to 28.02.2021 at the rate of Rs.6,00,000/- (Rupees six lakhs only) per month. The petitioner submits that he had paid advance license fee of Rs.27,81,000/- (Rupees twenty seven lakhs and eighty one thousand only) while he was able to run the canteen only from 01.03.2020 to 23.03.2020 and thereafter from 22.11.2020. On this basis, the petitioner claims that the difference between the actual lease amount payable by him for these periods be deducted from the aforesaid amounts and sum of Rs.14,21,000/- (Rupees fourteen lakhs and twenty one thousand only) be refunded to him.

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The six petitioners in W.P.No.3901 of 2021 obtained rights for running Coffee stalls on the uphill of the 3^rd respondent-Devasthanam. The 1^st petitioner was given license period from 01.11.2019 to 31.11.2020, the 2^nd petitioner was given license from 01.10.2018 to 30.09.2020, petitioner Nos.3, 6 and 7 were given licenses from 05.11.2019 to 04.11.2020, the 4^th petitioner was given license from 21.10.2019 to 20.10.2020 and the 5^th was given license from 20.10.2018 to 19.10.2020. All these petitioners could run their Coffee stalls only up to 20.03.2020 and could reopen their stalls from 20.11.2020. The petitioners in these writ petitioners seek the relief of extension of

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RRR,J3 W.P.No.3099_3171_3901 of 2020

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license period for the closure periods from 20.03.2020 to 20.11.2020.

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As all the petitioners have similar grievances and these grievances are all related to the 3^rd respondent, these three writ petitioners are taken up together with the consent of the counsel on both sides.

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The 3^rd respondent has filed counter affidavits in all the three writ petitions. The contention of the 3^rd respondent is that the period of stoppage was only from 20.03.2020 to 09.06.2020 for a total period of 82 days and the contention of the petitioners that they were forced to remain closed up to 20.11.2020 is incorrect and is denied. It is further stated that after the reopening of the temple from June, 2020, the number of pilgrims visiting the Temple had increased substantially. The monthly figures of the pilgrim foot fall numbers have been set out in the counter affidavits.

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The further case of the 3^rd respondent is that all the petitioners were given the benefit of extension of lease for a period of 82 days without payment of any extra license fee. As such, they cannot have any grievance against the 3^rd respondent nor seek refund of license fee or extension of license period for the alleged loss of business between 20.03.2020 to 20.11.2020.

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The 3^rd respondent also contends that there is no provision for refund of rent and the terms and conditions of the

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RRR,J4 W.P.No.3099_3171_3901 of 2020

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license/lease stipulate that no such concessions or relaxations in payment of license fee would be available to the lessees.

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Before considering the respective contentions,

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certain facts need to be elucidated.

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The proceedings of the 3^rd respondent dated 13.11.2020 and the counter affidavits filed by the 3^rd respondent in these writ petitions makes it clear that the shops of the petitioners remained closed till 20.11.2020. The proceedings dated 18.11.2020 would show that there was a meeting between the petitioners and the 3^rd respondent wherein it was essentially agreed between the parties that the lessees/license holders would be given the benefit of extension of time for the period between 20.03.2020 to 09.06.2020 on payment of lease amounts and further extension for the period from 10.06.2020 to 13.11.2020 would be granted on the conditions that could be stipulated by the Commissioner for Endowments. Apart from that it was also understood that the license holders would be permitted to carry on business after 15.11.2020 on payment of 50% to 60% of the contracted rent subject to the approval of the Commissioner of Endowments.

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It appears that the Commissioner of Endowments after receiving the communication of the 3^rd respondent setting out these facts had agreed for an extension of only 82 days lease period and did not accept the recommendations made by the 3^rd respondent.

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RRR,J5 W.P.No.3099_3171_3901 of 2020

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In the facts and circumstances set out above, the question that arises before this Court is whether the petitioners can seek either the relief of refund of the advance license fee paid by them or the relief of further extension of time of their license periods equivalent to the period from 10.06.2020 to 20.11.2020.

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It is an admitted fact that human activity and more specifically commercial activity was very badly affected by the Covid-19 Pandemic and the regulations made to control the said Pandemic. The case of the petitioners is that the period of closure of the businesses of the petitioners should be reckoned from 20.3.2020 to 20.11.2020 on the ground that conditions were not conducive for re opening of their businesses. The contention of the petitioners is that the above period should be treated as a period of closure due to the reasons beyond the control of anybody and as such they should be given the benefit of either extension of lease/ license period or refund of lease/license fees for this period. In effect, the petitioners are raising the pleas of force majeure and impossibility of performance under section 56 of the contract Act, 1872.

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Section 56 of the Indian Contract Act, 1872 stipulates that contracts which are impossible of performance become void and cannot be enforced or benefit be taken by either side from such contracts. However, in the present case, the 3^rd respondent temple had reopened in June, 2020 itself and thereafter the foot falls of the pilgrims was quite substantial as

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can be seen from the counter affidavit of the 3^rd respondent. The Petitioners have been compensated for the period of closure till 9.06.2020 by way of extension of their leases for that period. The petitioners, except stating that the business conditions were not conducive, have not pointed out any restrictions which prohibited them from reopening their businesses, after 9.06.2020. In the absence of any such material, this Court cannot come to conclusion that there was an absolute prohibition on the conduct of business by the petitioners, so as to make the contract of lease or the underlying reason for making the lease, due to reasons beyond the control of either party, impossible of performance. In those circumstances, this Court cannot apply Section 56 of the Indian Contract Act, 1872. Consequently, the liability of the petitioners to pay the rents for the contracted period cannot be waived nor extension of lease be directed.

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In the circumstances, the writ petitions would have to fail and are accordingly dismissed. There shall be no order as to costs.

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As a sequel, pending miscellaneous petitions, if any,

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shall stand closed.

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R. RAGHUNANDAN RAO, J.

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.07.2021 SDP

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RRR,J7 W.P.No.3099_3171_3901 of 2020

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HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO

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WRIT PETITION Nos.3099 + 3171 & 3901 of 2021

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_____-07-2021

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SDP

K.Satish, v. The State of Andhra Pradesh

Case brief

What is this about?

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K.Satish, v. The State of Andhra Pradesh

Case brief

What is this about?

What did the court decide?

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