1. Defendant No. 2 owned the land in suit and granted a mulgeni lease of it in 1915 to defendant No. 1 appellant and subsequently passed a usufructuary mortgage of the land in favour of the plaintiff-respondent. The appellant asked the respondent to allow him to surrender the lease. The respondent refused. The appellant then purported to surrender the lease to defendant No. 2 who accepted the surrender. The respondent sues the owner defendant No. 2 and defendant No. 1 appellant for rent for the period subsequent to the surrender by the appellant to defendant No. 2. The trial Court held the surrender valid and dismissed the suit. In appeal the District Judge held that the surrender was not competent and decreed the claim. Defendant No. 1 appeals.
2. The question in this appeal, therefore, is, whether, by virtue of Section 111, Clause (e), of the Transfer of Property Act, the lease could be determined by a surrender by a mulgeni tenant to the owner, the original lessor, without the consent and contrary to the wish of the mortgagee. It is to be noted that in the present case the mortgaged property comprised not merely the ownership of the land but also expressly the right to receive the rent from the mulgenidar appellant, and the rent was actually received by the respondent mortgagee. Under Section 5 of the Transfer of Property Act, the mortgage was a transfer of property. Under Section 109 of the Transfer of Property Act, the lessor transferred the property leased to the transferee mortgagee. It, therefore, follows that the rights including the right to agree to the surrender of the lessor of the rent during the subsistence of the mortgage did not remain in the mortgagor the original lessor. On general principles, therefore, the consent of the mortgagee to surrender would be necessary. Thus in Bobbins v. Whyte  1 K. B. 126 it was hold that
A mortgagor in possession, who has granted a lea.se under the statutory power conferred on him by Section 18, Sub-section 1, of the Conveyancing Act, 1881, has no power to accept a surrender of the lease without the concurrence of his mortgagee.
On a somewhat analogous principle it was held in Barjorji v. Shripatprasadji (1926) 29 Bom. L.R. 215 that it was competent to a mortgagee in possession, to determine the tenancy of an annual tenant in respect of the land which formed part of the mortgaged property without the consent of the mortgagor. The latter has no power to accept the surrender without the consent of the mortgagee even in the case of an annual tenant. A fortiori he would not have that power in the case of a mulgeni tenant as in the present case. It follows that it is necessary for the original lessor mortgagor during the subsistence of the mortgage to obtain the consent of the mortgagee before he could accept the surrender by the mulgenidar of the lease when it was a portion of the mortgaged property.
3. The appeal fails and is dismissed with costs.
4. In this case defendant No. 2 the original owner of the land granted a mulgeni lease in 1915 to defendant No 1, and afterwards passed a usufructuary mortgage in favour of the plaintiff. Defendant No. 1 then surrendered his lease to defendant No. 2 in September 1922. The present suit was brought by the plaintiff for subsequent rent against defendant No. 1. The question involved in this case is whether after the surrender by the permanent tenant in favour of the mortgagor the original owner, the plaintiff, as a mortgagee can recover the rent from the tenant for a period subsequent to the date of the surrender.
5. A preliminary point was raised on behalf of the respondent that no second appeal lay, and reliance was placed on the decision in the case of Rarnkrishna Yeshwant v. The President of the. Vengwla Municipality ILR (1916) 41 Bom. 367, 19 Bom. L.R. 88. It appears, however, from the plaint that the relief asked for was to recover the amount of the rent charged on the land by sale. The suit, therefore, would not be cognisable by the Small Causes Court. Preliminary objection, therefore, fails.
6. The nest point is whether the surrender in favour of defendant No. 2 is binding on the mortgagee. Under Section 109 of the Transfer of Property Act:
If the lessor transfers the property leased, or any part thereof, or any part of his interest therein, the transferee, in the absence of a contract to the contrary, shall possess all the rights, and, if the lessee so elects, be subject to all the liabilities, of the lessor as to the property or part transferred so long as he is the owner of it;...
7. It would, therefore, follow that the right to accept the surrender would pass to the mortgagee, the mortgage being a transfer within the meaning of Section 5 of the Transfer of Property Act. The decision in the case of Barjorji v. Shripatprasadji (1926) 29 Bom. L.R. 215, where it was held that the mortgagee can determine an yearly tenancy, does not cover the precise point we have to consider in this case. Further, the decision in Ramchandra v. Shaikh Hussan (1901) 3 Bom. L.R. 679 relates to the purchaser from the lessor. It was held in that case that the purchaser was not hound by the surrender by the permanent tenant to the original owner after the date of the sale. I think, however, that under Section 109 of the Transfer of Property Act, the transferee gets all the rights of the lessor. In Foa's ' Law of Landlord and Tenant p. 690, 6th edition, it is laid down as follows:-
So, again, a mortgagor who has granted a lease under the provisions of the Conveyancing Act, not being the person in whom the reversion expectant on the lease is vested, cannot in general accept a surrender; and consequently such a transaction leaves the tenant unprotected against a claim for subsequent rent by the mortgagee after giving notice to him of the mortgage,' See Bobbins v. Whyte  1 K.B. 125.
8. The same result would ensue where after a lease has been granted the lessor mortgages his interest in the property. I think, therefore, that the surrender In this case by the mulgeni tenant in favour of the original owner, after the mortgage was passed in favour of the plaintiff including not only the mortage of the land but also the right to recover the rent, is not valid without the concurrence of the mortgagee.
9. The decree of the lower appellate Court is right, and the appeal must be dismissed with costs.