A lease created by a mortgagee is binding on the mortgagor only if it is of such a character that a prudent owner of property would enter into it in the usual course of management.

( 1 ) THE facts material for purposes of this appeal have been stated by us in our order dated 6-2-1957, and may be briefly recapitulated. The suit property is agricultural land of the extent of 10 Bighas, 13 Biswas. On 8-7-1930, the then owners of the land, Ram Prashad and Uadiraj, executed a usufructuary mortgage over it and certain other properties, with which we are not concerned in this litigation, in favour of Dwarka Prashad, Naubat Singh and Munshilal. The lands were originally held in Sir by the mortgagors, but as part of their bargain with the mortgagees, they applied to have their names removed from the Sir, and that was done by an order dated 18-6-1930, the lands being thereafter entered as Khudkasht in the names of the mortgagees. In 1941, Ram Prashad, the surviving mortgagor, filed Suit No. 132 of 1941 for redemption of the mortgage. The suit was contested, but it was eventually decreed, the amount due to the mortgagees being fixed at Rs. 1,860. Subsequent to the decree, Ram Prashad died leaving him surviving, the appellants herein, as his legal representatives. On 6-9-1945, the amount due under the mortgage was paid by them and the mortgage was redeemed. When they sought to take possession of the suit properties, they were obstructed by Govind Sahai and Bhagwan Sahai, who claimed to have been admitted as tenants by the mortgagees. Thereafter, the appellants filed the suit, out of which the present appeal arises, under S. 180 of the U. P. Tenancy Act No. XVII of 1939, hereinafter referred to as the Act, to eject them, treating them as trespassers. The defendants resisted the suit on various grounds, of which only one is now material. They claimed that they were not trespassers but hereditary tenants under the Act and could not therefore be ejected, and Issue 2 was raised with reference to this plea.

( 2 ) THE Revenue Officer, Meerut, who tried the suit held on this Issue that as the lands had been held by the mortgagors as Sir, and that as the mortgagees had been themselves cultivating them as Khudkasht, the defendants could not be held to be hereditary tenants, and passed accordingly a decree in ejectment in favour of the appellants, and this decree was confirmed on appeal by the Commissioner, Meerut Division. The defendants took the matter in appeal to the Board of Revenue (Second Appeal No. 96 of 1948 ). By its judgment and decree dated 4-2-1954, the Board held that the defendants had been put in possession by the mortgagees under a Kabuliat dated 26-5-1936, that the rent fixed under the Kabuliat, Rs. 112 per annum, was a reasonable rate of rent as the circle rate was Rs. 76-6-0, and that, therefore, the settlement was binding on the mortgagors, as it was for "prudent and economic rent". On this finding, it allowed the appeal and dismissed the suit. Against this judgment, the plaintiffs have preferred this appeal by special leave.

( 3 ) AT the original hearing before us, the main contention pressed by the appellants was that the Kabuliat dated 26-5-1936, was not referred to in the written statement, and had not been exhibited at the trial, and that, therefore, no relief should have been granted on the basis of that document in second appeal. We, however, came to the conclusion that as the point had been raised, though not clearly in the written statement, it ought to be tried on the merits, and we accordingly remanded the case to the Board of Revenue for trial on the following two Issues : (1) Whether the lease deed dated 26/05/1936, by the mortgagees in favour of the respondents is true and legally valid; and (2) Whether the said lease is binding on the appellants.

( 4 ) AT the re-hearing which we directed, the parties have adduced fresh evidence on both the Issues, and the Board of Revenue has submitted its findings thereon. On the first Issue it has held that no lease deed had been executed by the mortgagees in favour of the lessees, but that the latter had executed a Kabuliat in f