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Judgment
Venkataramana Rao, J.—This is a suit to set aside a summary order passed in M. P. No. 1103 of 1928 in O.S. No. 588 of 1927 on the file
of the District Munsif''s Court of Palghat and for a declaration that the plaintiff is entitled to possession of the suit property. The case of the plaintiff
is that the suit properties belong in jenm to the tarwad of defendant 1. In 1918 defendant 1 leased the properties to defendant 3 who was the
anandravan of the same tarwad on a verumpattam lease with a munpattam of Rs. 500. Defendant 3 effected considerable improvements in the suit
property and in 1920 he mortgaged his rights in the suit property to one Laksmi Amma and her son, and subsequently executed a second
mortgage over the same; on 3rd June 1926 he executed a mortgage with possession in favour of the plaintiff and got back from him on the same
date a lease of the property; on 9th March 1927 the plaintiff gave a notice to defendant 3, terminating the tenancy and asking him to surrender
possession of the property; but before he could file a suit defendant 3 surrendered possession of the suit property fraudulently to defendant 1 by a
deed of surrender dated 13th June 1927. In or about September or October 1929 the plaintiff instituted a suit, O.S. No. 588 of 1927, for
possession on the strength of lease deed, and on 7th February 1928 obtained a decree for possession. In execution of the decree when the plaintiff
sought to take possession of the property he was resisted by defendant 2 who claimed to be in possession by virtue of an assignment from
defendant 1. The plaintiff''s case is that the surrender was not a valid and bona fide surrender and is therefore entitled to recover the possession of
the property. Defendant 3 remained ex parte. The main defence of the contesting defendants 1 and 2 is that the surrender was valid, that it was
competent for defendant 1 to take a surrender after settling the amount of compensation payable to the lessee, that any transfer by defendant 3
cannot affect his rights to settle accounts with his lessee and that the plaintiff is not entitled to recover possession.
The District Munsif who tried the suit was of opinion that the surrender by defendant 3 was a voluntary surrender by him to his own karnavan,
defendant 1, after notice to quit by the plaintiff, and the mortgage in his favour could not therefore operate to the prejudice of the plaintiff and gave
a decree for possession. The learned Subordinate Judge also was of opinion that the surrender was not bona fide and confirmed the decree of
District Munsif. In appeal it is contended by Mr. Narayanaswami Aiyar that any transfer by defendant 3 in favour of the plaintiff cannot affect
defendant 1''s right to settle account with the lessee, that the only right of the plaintiff is against any money that is payable to defendant 3 and that
there was no question of any surrender in this case and the plaintiff is not entitled to claim any possession as against defendant 1 or his assignee,
defendant 2, and relied strongly on the cases in Achuta v. Kali (1834) 7 Mad 545, Vasudeva Sehenoi v. Damodharan (1900) 23 Mad 86,
Viswanatha Iyer v. Chirmakutti Amma 1926 MWN 249 and Theethalen v. Eralpad Raja 1918 32 MLJ 442. The cases relied on by him only
establish that a Malabar jenmi is entitled to set off the arrears of rent against the compensation payable to the Janomdar, that any pledge of the
kanomdar''s right cannot affect the right of the jenmi and that this principle also applies to the case of Verupattam, but as indicated in Vasudeva
Sehenoi v. Damodharan (1900) 23 Mad 86, the right of the landlord to accept surrender and settle accounts with the tenants must be without
notice of the transfer by the lessee of his interest to another. The case in Viswanatha Iyer v. Chirmakutti Amma 1926 MWN 249, only lays down
that there is no privity between a jenmi and the mortgagee of the kanomdar''s interest who is not in possession of the estate and that a mortgagee of
that interest takes his mortgage subject to the liability of the konamdar''s interest being redeemed. But the question in this case is whether a
voluntary surrender of defendant 3 of his interest in the property while there was an outstanding mortgage is binding on the mortgagee. Though he
is a verumpattomdar defendant 3 is entitled to remain in possession of the property until munpattam of Rs. 500 and the value of the improvements
are paid to him. u/s 5, Malabar Compensation for Tenants'' Improvements Act, notwithstanding the determination of the tenancy he is entitled to
remain in possession of the property until ejectment in execution of a decree or order of Court and a tenant so continuing in possession shall during
such continuance hold as a tenant subject to the terms of the lease. Therefore under the law defendant 3 was entitled to remain in possession as a
tenant and he had sufficient interest in law to render it assignable or transferable and it is not open to a ten ant to effect a voluntary surrender to the
prejudice of the person to whom he has assigned his interest in the land. Though such a surrender might be operative as between the surrenderor
and the surenderee yet as against the assignee the estate or interest of the tenant in the land must be held to continue. In London and Westminster
Loan and Discount Co. Ltd. v. Drake (1859) 6 CBNS 798=141 E R 664, Williams, J., explains the effect of such a voluntary surrender thus:
The principles of law applicable to this point are well settled: the difficulty lies in the application of them. It is fully established that the right of the
lessee to remove fixtures continues only during the term and during such further period of possession by him as he holds under a right still to
consider himself as tenant; and it is plain that the right of his assignee can extend no further. On the other hand it is laid down as to a surrender in
Co., Litt. 338 D. that having regard to strangers who were not parties or privies thereto (lest by a voluntary surrender they may receive prejudice
touching any right or interest they had before the surrender) the estate surrendered hath in consideration of law a continuance. This doctrine has
been fully adopted and acted on in modern cases, as in Pleasant v. Benson, (1811) 14 East 234; Dev d. Beadon v. Pyke 5 M and S 146; Pike v.
Eyre, 9 B and C 909.
Bayley, J., expressed himself in similar terms in Pleasant v. Benson (1811) 14 East 234, thus:
And I take it that the surrender of the lessee would not destroy any interest which a stranger claiming under him had acquired in the term in the
meantime. Therefore though the estate may be effectually destroyed by the surrender, as between the surrenderor and surrenderee, yet it continues
as to strangers who in the intermediate time have acquired an interest in it.
The case in Timmappa v. Rama Venkatann (1897) 21 Bom 311 and the other cases relied on by Mr. Narayana-swami Iyer proceed on the
principle that when the estate of the lessee is determined or forfeited the estate of the under-lessee is also extinguished and have no application to a
case of surrender: [vide Section 115, T.P. Act, and Great Western Railway Co. v. Smit (1876) 2 Ch D 235 Both the lower Courts have
concurrently found on the evidence that the surrender was a fraudulent transaction besides being a voluntary act on the part of defendant 3, and
that defendant 1 had notice of the mortgage in favour of the plaintiff. So far as the plaintiff is concerned, the interest of defendant 3 must be deemed
to continue. The decrees of the lower Courts are right and the second appeal therefore fails and is dismissed with costs one set. (Leave refused).