Mortgagor's limited leasing power cannot defeat mortgagee rights; possessory lien did not protect the occupant.

A mortgagor cannot confer occupation rights on a third party in a way that defeats the mortgagee's security, because Section 65-A of the Transfer of Property Act permits only lawful leasing within prescribed limits and subject to the mortgagee's rights. On the facts, the occupant was neither a tenant nor a lessee under any lease deed, and the claimed possessory lien and permissive occupation were not legally recognisable. The HC therefore held that the occupant could not resist enforcement by the mortgagee under the security enforcement regime, and the issue was answered against the occupant.

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Issues: Whether a mortgagor could permit a third party to occupy mortgaged premises in contravention of Section 65-A of the Transfer of Property Act and whether such occupant could claim protection against enforcement by the mortgagee on the basis of possessory lien.

Analysis: The premises had been mortgaged in favour of the respondent bank consortium, and the petitioner was neither a tenant nor a lessee under any lease deed. The claim rested only on a purported possessory lien and permissive occupation. Section 65-A permits a mortgagor to lease mortgaged property only within the limits prescribed by law, and such arrangement cannot prejudice the mortgagee's rights. On the facts, there was no legally recognisable lease or tenancy in favour of the petitioner, and the alleged occupation could not defeat the mortgagee's right to proceed under the security enforcement regime.

Conclusion: The petitioner could not claim protection against the mortgagee on the basis asserted, and the issue was answered against the petitioner.

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