No Room for Rent Hike Without Agreement: Madras High Court

“Where surrender is implied and rent agreed, landlord cannot later inflate claims”, In a noteworthy verdict balancing statutory tenancy principles with practical evidence, the Madras High Court dismissed a landlord’s appeal seeking enhanced rent and extension of tenancy against the State, holding that the tenancy had legally ended in March 2017 and that the rent was fixed at Rs. 1,00,000 per month, not the subsequently claimed Rs. 1,58,890.

Delivering judgment in A.S. No. 39 of 2020, Justice Dr. A.D. Maria Clete upheld the trial court’s findings awarding the landlord Rs. 20,50,000 in arrears of rent, calculated at the agreed monthly rent for the 24.5-month period from 16.03.2015 to 31.03.2017, rejecting the landlord’s plea for a higher rate and longer duration.

“Implied surrender under Section 111(f) TPA firmly established – landlord’s refusal to accept letter irrelevant”

At the core of the case was a tenancy arrangement between the plaintiff landlord and the District Administration, which had leased the premises to house the Chidambaram Taluk Office. While the landlord claimed the tenancy continued beyond March 2017, the State authorities demonstrated that the premises were vacated, and possession effectively surrendered on 31.03.2017.

“The Taluk Office shifted to its new building in March 2017. The surrender letter was tendered, and on refusal, it was affixed on the premises in the presence of witnesses,” the Court observed.

Referring to Section 111(f) of the Transfer of Property Act, the Court held:

“Implied surrender is established where actions show unequivocal intent to give up possession. Shifting of office, notice affixation, and refusal to accept keys all cumulatively prove surrender.”

“Letter offering Rs. 1 lakh rent binds the landlord – no retrospective inflation allowed”

While the landlord asserted that the Public Works Department (PWD) assessed the rent at Rs. 1,58,890 per month, the Court ruled that this was not binding in absence of a formal agreement or sanction.

Instead, the Court found that the plaintiff had himself offered the premises at Rs. 1,00,000 per month, through Ex. B1, a letter submitted for official approval.

“Ex. B1 reflects the plaintiff’s own offer of Rs. 1,00,000 rent. Though he later tried to rely on the higher PWD assessment, the Government never approved it, and the plaintiff cannot claim more than what he initially proposed.”

The Court noted that even the PWD subsequently revised its assessment downward to Rs. 1,00,000, aligning with the plaintiff’s original offer, thus further supporting the State’s case.

“Rent can’t rise on landlord’s unilateral claim – courts go by agreed rate and actual use”

Emphasising the importance of mutual agreement in lease arrangements, the Court clarified:

“No evidence shows that the Government agreed to the enhanced rent. Without a formal lease deed or acceptance, the plaintiff’s later claim of Rs. 1,58,890 cannot override the clear documentary evidence.”

In doing so, the Court reiterated that rent cannot be escalated unilaterally, and courts will enforce only what is agreed and sanctioned.

“Rent claim beyond March 2017 rejected – no evidence of continued possession”

The landlord had also sought arrears till July 2017, arguing that he never received the keys back and that government files remained in the premises. However, the Court found this claim to be unsubstantiated.

“The office had shifted operations by 27.03.2017; a new building was inaugurated. No convincing proof shows continued possession by the State,” the Court held, rejecting the claim of extended tenancy.

Rs. 20.5 lakhs confirmed with costs

After determining that the tenancy lasted 24.5 months at Rs. 1,00,000 per month, the Court calculated:

• Total Rent Due: Rs. 24,50,000

• Paid by Government: Rs. 4,00,000

• Balance Arrears Payable: Rs. 20,50,000

The trial court had awarded this sum with interest, and the High Court found no grounds for interference.

“Trial Court’s judgment well reasoned – no perversity found”

In dismissing the appeal, the High Court observed:

“The trial court has rightly appreciated the facts and evidence. There is no perversity or legal infirmity warranting appellate interference.”

The plaintiff’s claim for enhanced rent and extended liability was thus squarely rejected, reinforcing that government tenancies must be resolved strictly within agreed terms and statutory framework.

Key Takeaways for Advocates and Litigants:

• Surrender of tenancy can be implied under Section 111(f) based on conduct, even without handing over keys.

• Initial rent offers made by landlord are binding, especially if used in official proposals.

• PWD assessments are not enforceable by themselves unless formally sanctioned and accepted.

• Successive claims for higher rent post-occupation without mutual consent are unsustainable.

• Courts prefer consistent documentary evidence over self-serving oral claims.

Date of Decision: 24 November 2025