Venkataramana Rao, J.
1. 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 fora 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 the 1st defendant. In 1918 the 1st defendant teased the properties to the 3rd defendant who was the anandravan of the same tarwad on a Verum-pattam lease with a Munpattom of Rs. 500. The 3rd defendant effected considerable improvements in the suit property and in 1920 he mortgaged his rights in the suit property to one Lakshmi Amma and her son, and subsequently executed a second mortgage over the same; on the 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 the 9th March, 1927 the plaintiff gave a notice to the third defendant terminating the tenancy and asking him to surrender possession of the property; but before he could file a suit the third defendant surrendered possession of the suit property fraudulently to the first defendant by a deed of surrender dated 13th June, 1927. In or about September or October, 1927 the plaintiff instituted a suit O.S. No. 588 of 1927 for possession on the strength of the lease deed and on the 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 the second defendant who claimed to be in possession by virtue of an assignment from the first defendant. The plaintiff's case is the surrender was not a valid and bona fide surrender and he is therefore entitled to recover possession of the property. The third defendant remained ex parte. The main defence of the contesting defendants 1 and 2 is that the surrender was valid, that it was competent for the first defendant to take a surrender after settling the amount of compensation payable to the lessee, that any transfer by the third defendant cannot affect his rights to settle accounts with his lessee and that the plaintiff is not entitled to recover possession.
2. The District Munsif who tried the suit was of opinion tlifat the surrender by the third defendant was a voluntary surrender by him to his own karnavan the first defendant 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 the District Munsif.
3. In appeal it is contended by Mr. Narayanaswami Aiyar that any transfer by the third defendant in favour of the plaintiff cannot affect the first defendant's rights to settle accounts with the lessee, that the only right of the plaintiff is against any money that is payable to the third defendant and that there was no question of any surrender in this case and the plaintiff is not entitled to claim any possession as against the first defendant or his assignee the second defendant and relied strongly on the cases in Achuta v. Kali I.L.R.(1884) 7 Mad. 545 Vasudeva Shenoi v. Damodaran I.L.R.(1899) 23 Mad. 86 and Visvanatha Aiyar v. Chinnu Kutti Amma (1926) M.W.N. 249 and Nochulliyil Eashuvan Theethisson v. The Eralpad Rajah : (1917)32MLJ442 . A 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 kanomdar, that any pledge of the kanamdor's right cannot affect the right of the jenmi and that this principle also applies to the case of Verumpattom but as indicated in Vasudeva Shenoi v. Damodaran I.L.R.(1899) 23 Mad. 86 the right of the landlord to accept surrender and settle accounts with tenants must be without notice of the transfer by the lessee of his interest to another. The case in Visvanatha Aiyar v. Chinnu Kutti Amma (1926) M.W.N. 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 kanomdar's interest being redeemed. But the question in this case is whether a voluntary surrender of the third defendant of his interest in the property while there was an outstanding mortgage is binding on the mortgagee.
4. Though he is verumpattomdar the third defendant is entitled to remain in possession of the property until Munpattom of Rs. 500 and the value of the improvements are paid to him. Under Section 5 of the Malabar Compensation for Tenant's 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 the third defendant 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 tenant 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 surrenderee yet as against the assignee the estate or interest of the tenant in the land must be held to continue. In the London and Westminister Loan and Discount, Co. Ltd. v. Drake (1859) 8 C.B. (N.S.) 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 b., that, 'having regard to strangers who were not parties or privies thereto (lest by a voluntary suurrender 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 : 104 E.R. 590 AT 592 Doe d Beadon v. Pyke (1816) 5 M. & S. 146 : 105 E.R. 1005 and Pike v. Eyre (1829) 9 B. and C. 909 : 109 E.R. 338 : 4 M. and R. 661.
5. Bayley, J., expressed himself in similar terms in Pleasant v. Benson (1811) 14 East 234 : 104 E.R. 590 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 immediate time have acquird an interest in it.
6. The case in Timmappa v. Rama Venkanna I.L.R.(1895) 21 Bom. 211 and other cases relied on by Mr. Narayanasawmy Ayyar 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 of the Transfer of Property Act and Great Western Railway, Co. v. Smith (1875) 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 the third defendant and that the first defendant had notice of the mortgage in favour of the plaintiff. So far as the plaintiff is concerned, the interest of the third defendant 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.