A Karta cannot validly mortgage joint family property without legal necessity, and partition suits cannot undermine creditors' rights under recovery laws.

JUDGMENT

The above second appeal arises out of the judgment and decree dated 17.02.20151 made in A.S.No.18 of 2013 on the file of learned Additional District Judge, Dharmapuri, reversing the judgment and decree dated 13.08.2012 made in O.S.No.103 of 2002 on the file of Subordinate Judge, Dharmapuri.

2. The appellants are the plaintiffs in O.S.No.103 of 2002 on the file of Subordinate Judge, Dharmapuri. They have filed the said suit for the relief of partition, separate possession and for permanent injunction.

3.The case of the plaintiffs is that they are the children of the 1^st defendant/2^nd respondent. The suit property belongs to the Hindu Joint family of the plaintiffs and defendants 1 and 2/respondents. The property has been inherited by the 1st defendant as per the Partition deed entered between the 1st defendant and his family members on 11.10.1976 and through the said partition deed, the 1^st defendant became the owner of the suit property. He has constructed a Theatre in the suit property by way of selling some of his properties allotted to him. Thereafter, the defendants 1 and 2 were leading a luxurious life and they were creating encumbrance over the joint family properties. On 16.4.2002, the plaintiffs came to know that the defendants 1 and 2 have mortgaged the suit property to the 3^rd defendant as a security for the loan obtained by M/s.Sri Ram Gas Agency and since the said mortgage was not discharged, the 3^rd defendant was attempting to take legal action against the property. Since the loan was not obtained for any legal necessity or for clearing antecedent debts, the said mortgage is not binding on the plaintiffs. Hence, the plaintiffs have come forward with the present suit for partition.

4.The claim of the plaintiff was resisted by the 3^rd defendant stating that 1st and 2nd defendant offered the suit property as a collateral security for the loan obtained by one Mr. Venkatasubramaniam of Kariyamangalam by creating equitable mortgage over the suit property and deposited the title deeds. The security was extended from time to time. The 1^st defendant created the mortgage on behalf of the minors also being the Kartha of the family. The mortgage executed by 1^st and 2^nd defendants are valid one. Since the borrower failed to repay the loan amount, the 3^rd defendant initiated proceedings under Section 29 of the State Financial Corporation Act and the 3^rd defendant is having every right to initiate recovery proceedings against the suit property and bring the same for auction sale. As the liability of the borrower and surety is co-extensive, the defendants 1 and 2 are bound to repay the loan amount. The plaintiffs and the defendants 1 and 2 collusively filed the present suit in order to defraud the 3^rd defendant.

The suit has been filed with malafide intention to deprive the right of the 3^rd defendant who is a public undertaking. The defendants 1 and 2 stood ex- parte in the suit which itself shows the collusiveness in between them. The 1^st defendant has already sold some of the properties to third parties and none of them have been added as a party in this proceedings and the plaintiffs are not entitled for partial partition. The action of the Kartha will bind the minors. Under these circumstances the mortgage created by the 1^st and 2^nd defendant is valid and according to law and the suit has to be dismissed with cost. Hence, prayed for dismissal of the suit.

5.The trial Court based on the pleadings and evidence and arguments advanced by the respective counsel decreed the suit in favour of the plaintiff. Aggrieved by this, the 3^rd defendant has preferr