Void later lease and fire damage did not end tenancy absent surrender and restoration of possession.

A void later permanent lease could not operate as an implied surrender of an earlier valid lease, because implied surrender by operation of law requires a valid new tenancy capable of taking effect at once. The later lease was void for contravening Section 29 of the Madras Hindu Religious and Charitable Endowments Act, 1939, so it could not extinguish the subsisting lease. Fire damage to the leased house did not automatically determine the sub-lease under Section 108(e) of the Transfer of Property Act; the lessee had to clearly elect to treat the lease as void and restore possession, which did not occur. The under-lessor therefore retained the right to recover possession.

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Issues: (i) Whether a void permanent lease taken from the head lessor could operate as an implied surrender of the subsisting prior lease and defeat the under-lessor's right to recover possession; (ii) whether destruction by fire of the house let to the defendant, and the defendant's subsequent permission from the head lessor to erect a hut, determined the sub-lease or the plaintiff's title to sue for possession.

Issue (i): Whether a void permanent lease taken from the head lessor could operate as an implied surrender of the subsisting prior lease and defeat the under-lessor's right to recover possession.

Analysis: Implied surrender is a surrender by operation of law and rests on a valid new lease which can take effect at once. Where the later lease is void ab initio, it cannot create the legal basis for inferring surrender of the earlier tenancy. A transaction that is nonexistent in law cannot extinguish a subsisting valid lease by implication. The permanent lease relied on was held void for contravening Section 29 of the Madras Hindu Religious and Charitable Endowments Act, 1939, and therefore could not bring about an implied surrender of the earlier lease.

Conclusion: The void permanent lease did not determine the earlier lease by implied surrender, and the contention was rejected in favour of the appellant.

Issue (ii): Whether destruction by fire of the house let to the defendant, and the defendant's subsequent permission from the head lessor to erect a hut, determined the sub-lease or the plaintiff's title to sue for possession.

Analysis: Under Section 108(e) of the Transfer of Property Act, destruction of a substantial part of the leased property gives the lessee an option to treat the lease as void, but it does not automatically determine the lease. The lessee must clearly communicate that election and also surrender possession to the lessor. Mere permission from the head lessor to construct a hut was not equivalent to surrender or to a fresh lease from the head lessor, and it did not extinguish the plaintiff's rights as under-lessor. Since the defendant continued in possession without surrendering it to the plaintiff, he remained bound by the tenancy relationship.

Conclusion: The sub-lease was not automatically terminated by fire or by the defendant's arrangement with the head lessor, and the plaintiff remained entitled to recover possession.

Final Conclusion: The decisions of the courts below were set aside, and the plaintiff's second appeal succeeded with recovery of possession left unaffected by the void later lease or the fire-related events.

Ratio Decidendi: A void later lease cannot operate as an implied surrender of an earlier valid lease, and destruction of leased property does not end the tenancy unless the lessee clearly elects to treat it as void and restores possession.

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