Surrender to a co-owner who controls the tenant does not validly terminate the tenancy.

Ashok Duggal and Pradeep Mehra jointly owned a basement and a flat in Gagan Deep Building, New Delhi.

The properties were let to M/s Shakun & Company (Services) Pvt. Ltd., of which Pradeep Mehra was a director, at monthly rents of ₹10,400 and ₹9,400 respectively, with the rent being shared equally by the co-owners.

Duggal claimed arrears of rent for 1 April 1999 to 31 December 2000 and damages/user charges after termination of the tenancy by notice dated 26 May 2000.

The tenant disputed liability and contended that it had vacated the premises on 30 June 2004 after issuing a notice dated 12 June 2004, and had handed over the keys to Pradeep Mehra, the other co-owner.

Duggal denied valid service of the notice and maintained that possession had not been delivered to him.

The Trial Court held that the tenant had not proved valid surrender of possession and decreed possession, arrears of rent, and damages with interest.

The First Appellate Court affirmed the decree, leading to the present second appeals.

1. Whether a suit for mesne profits and an enquiry under Order XX Rule 12 CPC is maintainable when no relief of possession is sought by the plaintiff?

2. Whether surrender of possession by a tenant to one co-owner can be treated as a valid surrender of the tenancy, particularly where that co-owner is also a director of the tenant company?

The Court applied the principles governing a tenant’s surrender and delivery of possession, holding that mere assertion of vacation or delivery of keys does not establish valid surrender where possession is disputed and the surrounding circumstances show that effective possession was not delivered to the landlord.

It also applied Order XX Rule 12 CPC concerning possession and mesne profits.

On proof of service, the Court relied on State of Maharashtra v. Rashid B. Mulani, (2006) 1 SCC 407, which holds that a certificate of posting is substantially weaker than registered-post proof and affords little assistance where dispatch or receipt is disputed.

Although possession may ordinarily be delivered to one co-owner, the validity of such delivery depends on the facts and whether it genuinely places the property at the disposal of the co-owners; delivery to a person who is also the tenant’s director may not constitute effective surrender.

The Court found that Duggal had denied receiving the notice dated 12 June 2004 and that the tenant relied only on a UPC receipt, without explaining why registered post was not used.

Applying Rashid B. Mulani, the Court held that the disputed UPC service did not prove that Duggal had been notified to accept possession.

More importantly, the alleged delivery was made to Pradeep Mehra, who was not only a co-owner but also the managing director of the tenant company.

The keys remained with Mehra, the premises remained locked, and there was no act demonstrating that possession had been surrendered jointly to both co-owners or made available to Duggal.

Given the existing hostility between Duggal and Mehra and Duggal’s removal as a company director, the Court treated the alleged surrender as an arrangement between the tenant company and its own director rather than a genuine delivery of possession to the landlords.

Consequently, the tenant remained in unauthorised occupation and was liable for continuing user and occupation charges.

The decrees for possession were upheld, together with arrears of ₹1,09,200 for the basement and ₹98,700 for the flat, carrying simple interest at 10% per annum for the period from 1 April 1999 to 31 December 2000.

Damages of ₹5,200 per month for the basement and ₹4,700 per month for the flat, with 10% interest from 1 January 2001 until delivery of possession, were also affirmed.

Both second appeals were dismissed.