Government Can't Deny Implied Surrender After Refusing to Accept Possession: Madras HC Clarifies Scope of Section 111(f) of TP Act

“Once a surrender letter is refused in person and notice is affixed with supporting evidence, implied surrender stands established under Section 111(f)” – In a significant ruling Madras High Court dismissed a landlord’s appeal seeking higher arrears of rent and reaffirmed the principle that an implied surrender of tenancy can be inferred from conduct, even when the landlord refuses to formally accept it.

Justice Dr. A.D. Maria Clete, while upholding the trial court’s judgment and decree awarding ₹20,50,000 as arrears of rent, held that “the legal consequences of surrender do not stand frustrated merely because the landlord chose to reject the physical acceptance of possession. The act of tendering the surrender letter, affixing it publicly, and the videographic evidence thereof satisfy the requirements of implied surrender.”

The Court’s decision brings clarity to two contentious legal issues often faced in public leases — whether the government is bound to pay rent at PWD-assessed rates or only those sanctioned by the government, and under what circumstances a tenancy can be treated as terminated when the landlord refuses to accept surrender.

Court Finds No Perversity in Fixing Rent at ₹1,00,000: “Plaintiff's Own Offer and Revised PWD Sanction Fix the Rate”

The dispute arose from the government’s lease of the plaintiff's property for operating the Chidambaram Taluk Office. The plaintiff, K. Mangesh Kumar, claimed rent arrears at ₹1,58,890 per month based on the Public Works Department’s initial assessment, arguing that the tenancy continued even after alleged vacation. The defendants, however, contended that the tenancy began on 16.03.2015 and ended on 31.03.2017, and that the mutually agreed rent was ₹1,00,000, pending government sanction.

The trial court accepted the defence and held that the plaintiff was entitled to rent at ₹1,00,000 per month for 24.5 months, totalling ₹24,50,000, of which ₹4,00,000 had already been paid. The remaining ₹20,50,000 was decreed.

In appeal, the plaintiff argued that the tenancy was never validly surrendered and that the rent of ₹1,58,890, based on PWD valuation, should be enforceable. However, the High Court found that the plaintiff himself had initiated the proposal at ₹1,00,000 per month and had never demonstrated a concluded agreement to the higher figure.

Justice Clete observed, “The plaintiff expressly agreed to lease the premises at ₹1,00,000 per month under Ex. B1. Though the PWD initially assessed a higher figure, the Revenue Department rejected that assessment and, upon reconsideration, the PWD revised the rent to ₹1,00,000 — the very figure first proposed by the landlord.”

The Court rejected the claim that the PWD assessment was binding without government sanction, stating that no evidence was brought on record to show any written agreement to pay ₹1,58,890. “When rent depends on government approval and the landlord has already consented to ₹1,00,000, he cannot turn around after occupation and insist upon the higher, unsanctioned rate,” the Court held.

“Refusal to Receive Surrender Letter Cannot Prevent Legal Surrender” – HC Applies Section 111(f) TP Act

Addressing the pivotal issue of whether the tenancy had been lawfully terminated, the High Court affirmed the trial court’s conclusion that the government had effectively surrendered possession on 31.03.2017.

The Court noted that the defendants had attempted to hand over the premises in person with a written letter of surrender (Ex. B3), and when the plaintiff refused to accept it, they affixed it to the premises in the presence of officials and videographed the entire process.

“Though the plaintiff contended that no registered communication was sent, the mere absence of a registered notice does not alter the legal effect when the plaintiff refused to receive the surrender letter tendered in person,” held the Court.

Justice Clete concluded: “On these facts, an implied surrender within the meaning of Section 111(f) of the Transfer of Property Act, 1882 stands established.” The Court also considered the fact that the new Taluk Office building had been inaugurated on 04.03.2017 and was functioning fully by 27.03.2017. The plaintiff, being a local resident, was deemed to be aware of this factual position.

Thus, the Court fixed the tenancy period from 16.03.2015 to 31.03.2017 — a total of 24.5 months.

No Interference Under Section 96 CPC: “Findings Based on Evidence and Legally Sustainable”

Finally, the High Court reasserted the well-established principle that an appellate court does not reappreciate evidence unless the trial court’s findings are perverse or contrary to law. In this case, Justice Clete found that the lower court’s conclusions were fully supported by documentary evidence, admissions, and conduct of the parties.

The Court concluded: “In light of the foregoing findings, no ground is made out to interfere with the trial court’s judgment and decree. The trial court’s findings are well-supported by evidence and require confirmation.”

The appeal was thus dismissed with costs.

This judgment strengthens the jurisprudence on implied surrender of tenancy under Section 111(f) of the Transfer of Property Act, particularly where physical possession is tendered and refused. It also affirms that government lease agreements must be understood in light of sanctioned rates, not merely departmental assessments. Most significantly, it restricts landlords from leveraging technical refusals to prolong tenancy and inflate rent claims.

For government landlords and public authorities alike, the ruling provides clear legal direction: When parties act in accordance with initial agreement and follow procedural norms, formal refusal cannot override legal consequences.

Date of Decision: 24 November 2025