Summary
A restaurant-bar lessee challenged an interim direction to secure all rent for March 2020–December 2021 despite its unresolved contractual force-majeure defence. The Court modified the deposit order to exclude the two periods of complete lockdown within that span, while requiring the balance. It did not decide whether rent was ultimately payable for the excluded periods. The force-majeure issue and all contentions remained for arbitration, to be concluded preferably within nine months subject to cooperation.
Issues
- Whether the interim rent deposit should include complete-closure periods before adjudication of the force-majeure defence.
Provisions considered
- Section 17, Arbitration and Conciliation Act, 1996The specific interim security order was modified to exclude complete-lockdown periods while preserving the tribunal’s final decision on rent liability. (¶ 6-7)
Held
- The tribunal had reserved the contractual force-majeure issue without even a prima facie assessment of its effect. In the circumstances, requiring the full disputed rent for periods of complete closure as interim security was unjustified pending that determination. (¶ 6)
- The adjustment was confined to complete closure. The lessee remained required to deposit rent for the balance of the ordered period, including periods when operations were permitted at reduced capacity. (¶ 6-7)
- The operative exclusions were 22 March–9 September 2020 and 19 April–28 June 2021. They represented relief from interim deposit, not a declaration extinguishing rent. The tribunal had to determine the contractual defence independently, uninfluenced by these interim observations. (¶ 7)
Result
Appeal partly allowed. The rent-deposit direction for March 2020–December 2021 was modified to exclude 22 March–9 September 2020 and 19 April–28 June 2021, subject to final arbitration. The balance was to be secured in the directed fixed deposits. Arbitration was to conclude preferably within nine months, subject to cooperation. No order as to costs.