It probably means that the affairs of the immediate lessor are subject to the operations of a court.
Chancery : a record office for public archives or those of ecclesiastical, legal, or diplomatic proceedings
in chancery
chan(t)s-rē plural chanceries. : a record office for public archives or those of ecclesiastical, legal, or diplomatic proceedings., : a high court of equity in England and Wales with common-law functions and jurisdiction over causes in
equityEquityhttps://en.wikipedia.org/wiki/Equity_(law)#Equity_in_common_law_jurisdictions_(general)
Equity Its general purpose is to provide a remedy for situations where the law is not flexible enough for the usual court system to deliver a fair resolution to a case.[
I am thinking that the intermediate lessor or family may have been affected by a decision according to say land law or inheritance law and have made a case to the Court of Chancery for a hearing in equity.
So for inheritance it might have been a decision about who the beneficiaries were, how they were to be treated, who the executors were of an estate, and if Land Law a decision about the lives (terms) of a lease or conditions of the lease such as keeping land in pasture or other husbandry covenants. or perhaps the head lessor was moving against the intermediate lessor for breaches of lease covenants.
'A criticism of Chancery practice as it developed in the early medieval period was that it lacked fixed rules and that the Lord Chancellor was exercising an unbounded discretion. The counter-argument was that equity mitigated the rigour of the common law by looking to substance rather than to form.' from the Wiki article.
So going to Chancery would have been for there to another look at something with fresh eyes and dealing with 'substance'. Some actions led to decisions that were correct in terms of the law but unfair/cruel/nonsensical in outcome.
It does not mean the land was encumbered, necessarily though mortgages could have been a reason for a decision being made and then taken to Chancery.
I am not sure who the head lessor was. Sometimes there are records of their dealings with the intermediate lessors.
If you follow the land/person through to Griffiths Valuation in the 1850s you might find more details.