E.S. Venkataramiah, J.
1. On a reference made by the learned Chief Justice, the above petition has come up before us for disposal.
2. This petition arises out of the suit O. S. No. 573 of 1974 on the file of the Principal Munsiff, Mandya. The petitioner is the defendant in the said suit and respondents are the plaintiffs. The first respondent was the owner of a piece of agricultural land which is the subject-matter of the suit and he mortgaged the same with possession in favour of the petitioner under registered mortgage deed dated 3-7-1967. After the said mortgage was executed, he sold the equity of redemption in the land in favour of respondent No. 2. The respondents instituted the suit, out of which this petition arises, for redemption of the mortgage and for a decree for possession ir favour of respondent 2 on redemption. The petitioner contested the suit in so far as the relief for possession was concerned. He, however, had no objection for the mortgage being redeemed. His case was that he was a tenant of the land prior to the mortgage and during the subsistence of the said tenancy the mortgage had come into existence. It was contended by him relying upon Section 26 of the Karnataka Land Reforms Act (hereinafter referred to as the 'Act') that he Was entitled to remain in possession of the land as a tenant after the mortgage was redeemed. It was also urged that in view of the said tenancy, the sale of the equity of redemption by the 1st respondent in favour of the 2nd respondent was void. On the basis of the above pleadings, the trial Court framed three issues i. e. issues 3, 4 and 5 which read as follows:
'Issue No. 3: Whether the defendant proves that he was the tenant of the suit property under the 1st plaintiff prior to mortgage in favour by the 1st plaintiff?
Issue No. 4: Whether the defendant proves that the 2nd plaintiff is not an agriculturist as defined under the Land Reforms Act and as such the sale dated 13-3-1971 in her favour by the 1st plaintiff is void
Issue No. 5: Whether the defendant proves that the sale in favour of the 2nd plaintiff is also void as the same was carried out during the continuation of tenancy of the defendant ?'
After the above issues were framed, the petitioner filed an application I. A. No. 5 in the suit, requesting the court to refer issues 3, 4 and 5 to the Land Tribunal under Section 133 of the Act as the suit involved the question whether the petitioner was a tenant under the first respondent and whether the tenancy was in abeyance by virtue of the provisions of Section 26 of the Act. The respondent contested the said application on two grounds. (1) that the tenancy even, if it was true, had come to an end on the execution of the mortgage deed by reason of the merger of the lease which was a smaller estate in the mortgage which was a larger estate and (2) that it was not open to the Tribunal to determine whether the sale of equity of redemption by the 1st respondent in favour of 2nd respondent was void. Incidentally, it was also contended by the respondents that the Tribunal had no jurisdiction to decide whether the tenancy in question, which was a past tenancy, was in existence before the mortgage deed came into existence or not. The learned Munsiff dismissed the said application holding that the tenancy in question, even if it was true, had come to an end on the execution of the mortgage deed on the ground that there was a merger of the lease in the mortgage and that the Tribunal was not competent to decide whether the tenancy prior to the mortgage was in existence or not. He also held that issues 4 and 5 which related to the validity of the sale executed by respondent-1 in favour of respondent-2 could not be decided by the Land Tribunal. Aggrieved by the order of the Tribunal the petitioner has filed the above petition.
3. At the outset it should be stated that Sri Mohandas N. Hegde, learned counsel for the petitioner, conceded that the questions covered by issues 4 and 5 relating to the validity of the sale could not be referred to the Land Tribunal. In view of the above submission, we do not propose to deal with that aspect of the case. The only question which survives for consideration is whether issue No. 3 which relates to the question whether the petitioner was a tenant before the mortgage and whether the said tenancy was only in abeyance under Section 26 of the Act should be referred to the Land Tribunal or not.
4. The learned Munsiff came to the conclusion that on the execution of the mortgage deed in favour of the petitioner the lease in favour of the petitioner, even if it is true, became merged in the mortgage and therefore extinguished on the basis of the decision of this Court in Srinivasa Setty v. Muniyappa ((1973) 2 Kant LJ 107) rendered by a Single Judge of this Court. It is no doubt true that the enunciation made in the said decision supports the view taken by the learned Munsiff; but we have to hold that the view expressed in that decision is no longer good law in view of the decision of the Supreme Court in Shah Mathuradas Maganlal and Co. v. Nagappa Shankarappa Malaga : 3SCR789 wherein it has been held that the doctrine of merger would not apply to case of a lease followed by a mortgage. The relevant part of the decision of the Supreme Court reads as follows:
'16. The contention of the appellant was that there was no surrender and there was merger of the interest of the mortgagee and the tenant. Ordinarily, the doctrine of merger applies to extinction of mortgage security. This occurs by the merger of a lower in a higher security and by the merger of a lesser estate in a greater estate. Where the capacity in which a person in possession of the mortgagee's rights is something quite different from the capacity in which he is in possession of the equity of redemption, the mere fact that the two capacities are united in the same physical person cannot result in a merger.
17. For a merger to arise, it is necessary that a lesser estate and a higher estate should merge in one person at one ar.d the same time and in the same right, and no interest in the property should remain outside. In the case of a lease the estate that is in the lessor is a reversion. In the case of a mortgage the estate that is outstanding is the equity of redemption of the mortgagor. Therefore, there cannot be a merger of lease and mortgage in respect of the same property since neither of them is a higher or lesser estate than the other. The view expressed in Narayan v. Ramachandra, (1963) 65 Bom LR 449 is correct.'
5. Hence it has to be held that the view expressed in Srinivasa Setty's case (1975-2 Kant LJ 107) stands overruled. It is no doubt true that in the course of the above decision of the Supreme Court it has been held that the lease in question, however, came to an end by reason of implied surrender contemplated under Section 111 of the Transfer of Property Act. It is not open to the respondents to plead in the instant case that there has been such an implied surrender by reason of Section 26 of the Act which reads :
'26. Tenancy in abeyance during usufructuary mortgage in favour of tenant: If any land is mortgaged by a landlord by way of a usufructuary mort-gage to tenant cultivating such land, the tenancy of such land shall be in abeyance during the period the mortgage subsists. After the expiry of the said period it shall be lawful to the tenant to continue to hold the land on the terms and conditions on which he held it before the mortgage was created.'
6. Section 26 of the Act modifies the provisions of Section 111 of Transfer of Property Act in so far as agricultural lands are concerned, to the extent it declares that the tenancy in the circumstances referred to therein would be in abeyance during the period the mortgage subsists.
7. The true effect of Section 26 of the Act is that the anterior lease of agricultural land would not become extinct by reason of the creation of a mortgage in favour of the tenant but would become dormant. The said provision confers a right on the mortgagee, who was a tenant earlier, to continue to hold the land after the extinguishment of the mortgage on the terms and conditions on which he held it before the mortgage was created. In view of the above express provision found in the statute it has also to be held that no support can be derived by the respondents from the decision of this court in Radhabai Balakrishna Deshpande v. Raghavendra Hanumantha Deshpande ( (1975) 2 Kant LJ 387) in which it has been held that the scope of enquiry by the Tribunal constituted under the Act is limited to the existing tenancy in dispute and not to the tenancy that existed at remote past, because by virtue of Section 26 the tenancy continues to be in existence though in abeyance and does not become extinguished on the execution of the mortgage.
8. Sri M. S. Gopal, learned counsel for the 2nd respondent, however, argued that the application before the court below was premature as the occasion for enquiry into the existence of the tenancy in question had not yet arisen. According to him such a case would arise only after the mortgage is redeemed. We do not think that in the context of the present suit the application was a premature one. The question whether the 2nd respondent was entitled to the possession or the property on redemption has to be decided before a preliminary decree for redemption is passed because one of the directions to be given in the course of the preliminary decree for redemption relates to the delivery of possession of the mortgaged property by the mortgagee to the mortgagor, on the mortgagor satisfying the conditions imposed on him. The determination of the question whether delivery of possession on redemption should be ordered or not cannot therefore be relegated to a stage subsequent to the stage of the preliminary decree. We, therefore, reject the above contention of Sri M. S. Gopal. Under S, 133 of the Act the question whether there is a tenancy which may be either active or dormant in respect of an agricultural land or not has to be decided by the Land Tribunal and not by the Civil Court (Vide Malliah Murigayya v. Puttappa Shivappa : AIR1976Kant192 ).
9. In view of the foregoing, we allow the above revision petition in part and direct the learned Munsiff to refer issue No. 3 to the Land Tribunal and to dispose of the suit in accordance with law after the receipt of the finding of the Land Tribunal on that issue. The decision of the learned Munsiff in so far as Issues Nos. 4 and 5 are concerned is affirmed.
10. Revision partly allowed.