Decided on April 01,1963

AMMINI Appellant

Referred Judgements :-



- (1.)The 3rd defendant is the appellant. The suit was for recovery of money due under a hypothecation bond. Defendants 1 and 2 had a leasehold interest over the plaint schedule property. One Vaidyanatha Iyer was the kanomdar of the property. The kanom right of Vaidyanatha Iyer was purchased by the 3rd defendant under Ext. B 3 in 1959. Defendants 1 and 2 had executed a mortgage in favour of the plaintiff for Rs. 200/- under Ext. A 1, in 1948. In 1956 defendants 1 and 2 surrendered their leasehold interest over the property to the 3rd defendant under Exts. B 2 and B 1 without making any reference to Ext. A 1 mortgage. The suit was filed for the realisation of the mortgage amount by sale of the tenancy right of defendants 1 and 2 over the property. The contentions of defendants 1 and 2 were that they had discharged Ext. A 1 mortgage, and that they had surrendered the tenancy right to the 3rd defendant, the kanomdar. The 3rd defendant contended that after she had purchased the kanom right of Vaidyanatha Iyer under Ext. B 3, defendants 1 and 2 surrendered their leasehold right to her under Exts. B 1 and B 2 on receipt of full consideration by them and that she was not liable for the plaint claim.
(2.)The Trial Court dismissed the suit. On appeal the court below decreed the suit and it is from this decree that the appeal has been preferred.
(3.)The point argued by counsel for the appellant was that the court below went wrong in thinking that the mortgage would survive the surrender by defendants 1 and 2 of their leasehold interest in favour of the 3rd defendant. The question for consideration is whether the mortgage right on the leasehold interest of defendants 1 and 2 would be extinguished by the surrender of the leasehold interest in favour of the 3rd defendant. It may be recalled that the mortgage was also in respect of the improvements effected by defendants 1 and 2 in the property as lessees. It has to be assumed that the 3rd defendant had notice at the time of surrender of the existence of an outstanding encumbrance on the right surrendered to him as the mortgage was registered. Here, the landlord got the tenant's interest by voluntary surrender and it has been held in Bhabutmal Nathmal v. Khan Mohd. (AIR 1946 Nagpur 419) that a tenant by surrendering his interest in the property cannot derogate from his own grant, and if the landlord accepts the surrender with notice of a mortgage on the leasehold interest, the mortgagee would be unaffected by the surrender and can enforce his claim on the right surrendered. The mortgage in this case is a registered one, and it goes without saying that the landlord must be deemed to have notice of the same. A voluntary surrender by a tenant stands on a different footing from an extinction of the tenant's rights by operation of law. In the latter case it seems to be clear on the authorities that the encumbrance created by the tenant would terminate on the extinction of the tenant's right in the property. But a tenant cannot derogate from his grant by putting an end to his estate by a voluntary surrender. This distinction is well brought out in AIR 1946 Nagpur 419:
"A distinction has to be drawn between a voluntary act by which a tenant puts an end to his tenancy and an involuntary act by which the tenancy ceases by operation of law. Where a tenant makes a sublease or a mortgage and subsequently surrenders, the surrender does not affect the subordinate rights which he creates; but if the tenancy is extinguished by operation of law then anything engrafted on the tenancy automatically, disappears."

I respectfully follow the reasoning of this judgment and hold that it is open to the plaintiff to enforce the claim under hypothecation as against the tenancy right of defendants 1 and 2 in the property, eventhough that right had been surrendered by them to the third defendant.


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