Ravi, see my recent post about why I think this is happening and my current workaround:

http://our.umbraco.org/forum/umbraco-7/using-umbraco-7/59655-Umbraco-7-SurfaceController-Persist-ModelStateModel

Deleted. See post from my first response. Use return CurrentUmbracoPage() instead of return RedirectToCurrentUmbracoPage().

I've trieda version of that.. basically my surface controller looks like this

   public ActionResult RegisterPost(RegistrationViewModel tModel)
    {
if (ModelState.IsValid)
            {
                // Send email
                TempData["success"] = true;


                var memberService = Services.MemberService;


                //Get values from DB
                if (CheckAccountExists(tModel))
                {

                    //add user to members
                    string fullName = GetFullName(tModel.AccountNumber);

                    if (!CheckMemberExists(tModel))
                    {

                        var member = memberService.CreateMember(tModel.EmailAddress, tModel.EmailAddress, fullName,
                                                                "RegisteredUser");
                        member.SetValue("memberGuid", member.Key);
                        member.IsApproved = true;

                        // Don't forget to save all these things
                        memberService.Save(member);

                        //do other database actions
                        AddMembertoDatabase(tModel, member.Key);

                    }
                    else
                    {
                        ModelState.AddModelError("", "member already exists. Aborting!");
                        return CurrentUmbracoPage();
                    }


                }
                else
                {
                    ModelState.AddModelError("",
                                             tModel.EmailAddress +
                                             ":Account Number Does Not match our records. Aborting!");
                    return CurrentUmbracoPage();
                }

                return RedirectToCurrentUmbracoPage();
                // return Redirect("ExtendedRegistration");
            }
            else
            {
                ModelState.AddModelError("",
                                         "There was an issue posting the variables!");
            }
        }

However I just get the empty TModel..

Aha its about the way I was setting my @inherits @inherits sets the view base class you need to set the model type

so i changed my code to make sure the model was and is coming through properly in the p artial and posting to the controller.. I'll update this a bit later

I found that my issue was related to what i had in the inherits in my template page and in the subsequent partial page

In my template page I was originally passing a different model @inherits Umbraco.Web.Mvc.UmbracoTemplatePage

and this was interfering with the model i called in the partial

I now have

@inherits Umbraco.Web.Mvc.UmbracoTemplatePage //template
@inherits UmbracoViewPage<CorrectViewModel> // partial

@Html.Action("Myxxx", "xxxSurface") //insde my Template

and in my surface controller I added a child action and that seemed to sort me out

 [ChildActionOnly]
        public ActionResult Myxxx()
        {
            return PartialView("Mypartialpage");
        }

is working on a reply...