Mortgagee-created agricultural lease must be prudent and bona fide to bind the mortgagor after redemption.

A mortgagee in possession can bind the mortgagor only by creating a lease that a prudent owner would make in ordinary management under section 76(a) of the Transfer of Property Act. The party relying on such a lease must show that it was reasonable, bona fide, and supported by evidence of the land's probable yield and economic value; on the facts, that proof was lacking and the rent was found unduly low, so the lease was not binding after redemption. As the grantor lacked authority to create a tenancy binding on the true owner, the occupants also could not acquire hereditary tenancy rights under section 29(a) of the U.P. Tenancy Act.

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Issues: (i) Whether the agricultural lease created by the mortgagee in possession was valid and binding on the mortgagors after redemption. (ii) Whether the occupants acquired hereditary tenancy rights under the U.P. Tenancy Act on the strength of that lease.

Issue (i): Whether the agricultural lease created by the mortgagee in possession was valid and binding on the mortgagors after redemption.

Analysis: A mortgagee in possession can bind the mortgagor only where the lease is such as a prudent owner would create in the ordinary course of management within the rule embodied in section 76(a) of the Transfer of Property Act. The burden lies on the person relying on the lease to show that it was reasonable, bona fide, and supported by proper evidence of the probable yield and economic value of the land. On the facts, the lease was found to be unsupported by convincing proof, the rent fixed was unduly low, and the transaction was not one a prudent owner would enter into.

Conclusion: The lease was not binding on the mortgagors.

Issue (ii): Whether the occupants acquired hereditary tenancy rights under the U.P. Tenancy Act on the strength of that lease.

Analysis: Rights under section 29(a) of the U.P. Tenancy Act arise only where the person in possession was lawfully admitted as tenant by one having authority to grant the tenancy. If the lease is not binding on the true owner and the grantor lacked authority to create a tenancy binding on that owner, the occupant cannot claim hereditary tenancy rights on that basis. Since the lease was held not binding, the occupants could not rely on it to found rights under section 29(a), and the provisions dealing with sir lands did not assist them.

Conclusion: The occupants acquired no hereditary tenancy rights.

Final Conclusion: The order under appeal was set aside and the original decree in favour of the appellants was restored, with costs.

Ratio Decidendi: A lease granted by a mortgagee in possession binds the mortgagor after redemption only if it is shown to be a prudent and bona fide transaction within the ordinary course of management, and tenancy rights cannot arise under section 29(a) of the U.P. Tenancy Act from a grant made by one lacking authority to bind the true owner.

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