Hanuman, after getting himself relieved from the knots , started thinking as to what is the next thing to do. He was wondering how he could create more misery for demons and Ravana. He realised that burning Lanka is the best thing that would bring more misery to the demons. He started strolling on the palaces with fire in his tail. He torched the palaces of Ravanas sons, ministers etc one by one except for Vibhishanas palace. The palaces started burning vigorously and the gems started melting.
Finally he landed on Ravanas palace. He torched Ravanas palace and it started burning. The wind aided the fire and it spread it out across the homes of Lanka. People were terrified and they were running here and there. They started thinking that probably fire god has manifested as Hanuman and taking revenge of the demons. or probably they started wondering if he is Indiras messenger, or Indiras form, or Wind god or Vishunus incarnation.
People were trying to save their homes. the fire spreaded very fast and it was furious. the gold and silver on the houses melted . Women were jumping out of windows with children in hand. Thus, after destroying Lanka, he went to the peak of Tirikooda mountain. He saw the destruction that he has made in Lanka and he went to the sea to put the fire off his tail. Hanuman thought about Sri Rama and also about the Devas. Devas were extremely delighted by Hanumans act.