Tenant Cannot Claim Valid Surrender Of Premises By Handing Over Keys To One Co-Owner Who Is Also Company Director: Delhi High Court

"Considering the non-cordial terms between the parties, the surrender of possession by the tenant to one co-owner who also happened to be the Director of the Company, has rightly not been held to be a valid surrender of tenancy." Delhi High Court, in a judgment, held that a tenant company cannot claim valid vacation of premises by merely handing over keys to one co-owner who is also a director of the tenant company, especially amidst bitter family and corporate acrimony.

A bench of Ms. Justice Neena Bansal Krishna observed that such an arrangement amounts to a stage-managed surrender rather than a genuine delivery of possession to all landlords.

Dispute Over Arrears Of Rent And Possession

The respondent-plaintiff Ashok Duggal and his brother-in-law Pradeep Mehra jointly owned a basement and flat in Rajendra Place, New Delhi, which were leased to M/s Shakun & Company (Services) Pvt. Ltd. in January 1985. Following bitter family disputes and the removal of the plaintiff as a director of the tenant company, the plaintiff instituted suits seeking recovery of possession, arrears of rent, and mesne profits. Both the trial court and the first appellate court decreed the suits in favor of the plaintiff, prompting the defendant company and Pradeep Mehra to approach the High Court via regular second appeals.

Questions Of Surrender And Service Of Notice

The primary legal questions before the High Court were whether a suit for mesne profits is maintainable without seeking possession and whether handing over possession to a single co-owner constitutes a valid surrender. The appellant-tenant contended that it had duly issued a vacation notice via a certificate of posting (UPC) and handed over the keys to co-owner Pradeep Mehra after the plaintiff refused to accept them.

Certificate Of Posting Holds Little Evidentiary Value Court Rules On Inadequacy Of UPC Service

The court noted that the appellant relied merely on a UPC receipt to claim service of the vacation notice upon the plaintiff. Referring to the Supreme Court precedent in State of Maharashtra v. Rashid B. Mulani, the bench emphasized that a certificate of posting is not comparable to a registered post receipt because post offices maintain no records for UPC dispatches. The court upheld the lower appellate findings that the notice was never validly served upon the plaintiff.

Tenant Cannot Surrender Premises To Itself Through A Director No Valid Surrender To Co-Owner Under Acrimonious Circumstances

The bench underscored the glaring conflict of interest arising from the fact that Pradeep Mehra, the recipient of the keys, was simultaneously the managing director of the tenant company and a co-owner. The court observed that the tenant company effectively handed the keys to itself through its director amidst active corporate hostility.

"It is difficult to accept that there was a valid surrender of the tenancy to Pradeep Mehra... the alleged surrender of possession of tenanted premises was stage managed by ostensibly giving the keys to Pradeep Mehra, the Director of the tenant Company."

Failure To Hand Over Possession During Trial Continued Unauthorized Occupation Entitles Landlord To Mesne Profits

The court pointed out that despite the plaintiff expressing readiness during trial proceedings to take back possession, the defendants made no genuine effort to hand over the premises to him. The bench affirmed the concurrent findings of the lower courts that the defendant company remained in unauthorized occupation, thereby justifying the award of arrears of rent and monthly damages along with ten percent interest.

Appeals Dismissed With Costs

Finding no substantial question of law raised by the appellants, the Delhi High Court dismissed both regular second appeals. The concurrent decrees passed by the lower courts directing the handing over of possession, payment of historical arrears of rent, and ongoing damages were firmly upheld.

Date of Decision: 31 July 2026