Business slump no excuse for rent default

A slump in the business cannot justify default in payment of the lease rent; the Supreme Court observed that in the judgment in Chandigarh Administration vs Hari Ram. In this case a 99-year lease was given to Hari Ram for a commercial space in 1996. After a few installments, he defaulted on paying the dues. The Chandigarh Administration gave 26 opportunities to clear the dues, but still, the payment was not made. So it invoked the Public Premises (Eviction of Unauthorised Occupants) Act and tried to evict him. However, the Punjab & Haryana High Court stopped the action holding that the cancellation of allotment would cause hardship to the lessee and one more opportunity must be given to him to pay the outstanding dues. The Chandigarh Administration appealed to the Supreme Court. It allowed six months to the lessee to clear arrears amounting to Rs. 10.25 lakh, which he can be evicted.