A Brief Overview of Karta under the Hindu Family Law

INTRODUCTION

A Joint Hindu Family is the normal condition of Hindu Society, or atleast it was until the last few decades. A joint Hindu family is a group of relatives tied together by ties of kinship & marriage and descended from a common ancestor. It includes children, children’s children down the line, spouses. A joint Hindu Family is normally joint in worship/kitchen/business. Even daughter in laws/widowed daughters who has returned back to their parental side are part of a Hindu joint family. A joint family may encompass countless generations.[1] The manager of the joint Hindu family is called the Karta.[2] The senior most male member of a Joint Hindu family is considered as the Karta of the family provided he is otherwise fit to act as such that he is not suffering from any physical or mental deficiency.[3]

Generally Karta is a person on whom the entire management of the family is vested for the welfare of the family. His relationship with the other members of the family is not in the form of principal and agent. In addition to that, his status is not to be confused with that of the manager of any commercial firm. Therefore, in terms of family management, he is the sovereign; however his powers can not be so used as they can become detrimental to the family itself.[4] Under a Hindu Coparcenary system, the Karta enjoys certain powers. These powers can be with respect to power to manage the family for its beneficial continuance, power to receive income with respect to any joint family property, power to represent the family in case of any litigation brought against or by the family, power to compromise with any claims where he is of the opinion that such would be in the beneficial interest of the family etc.[5] Like a karta, all the coparcener in a Hindu joint family are also entitled to enjoy certain rights. These rights are right to claim a share in the coparcenary property by virtue of birth in the system; each and every coparcener enjoys a right of common enjoyment of the property held by the coparcenary system; in case of the death of any coparcener his part of the property devolves with the other coparceners and does not go outside the coparcenary system; in a joint family generally it is the karta who manages the family. However, the coparceners reserve a right to ask for accounts. Such a right keeps a check on the misappropriation tendency, if any, and ensures fairness; though in a coparcenary property, all the coparceners possess equal rights but there is no bar on the coparceners to acquire and own any separate property. Such property is treated as separate property and it is out of the purview of partition; every coparcener has a right on the property held under the system and hence after attaining majority they can ask for partition at any time; the law also entitles a coparcener to renounce his interest in the coparcenary property absolutely or conditionally. In case of absolute renouncement he can not claim any right thereafter; a coparcener in a Hindu joint family can also challenge any unauthorised alienation of the property by any other coparcener.[6]

WHO CAN BE KARTA

With reference to  A. Kunjipokkarukutty v. A Ravunni,[7] it was noted that the in the absence of the father in the family, it is the doyen i.e. the most senior member of the family who is concluded to be the Karta. This conclusion is based upon seniority and the opinion of the other members does not hold much significance. It must be noted that a person cannot become the karta until and unless the previous karta is no longer alive notwithstanding few exceptions.[8]

When the karta relinquishes his right to manage the affairs of the family due to reasons of his health or due to him being away, another member of the family can be allowed to look after the joint family property with the consent of all other members of the family, not necessarily being in a list of seniority of age.[9]

A landmark case in this regard is the case of Nopany Investments (Pvt) Ltd. v. Santokh Singhwherein the karta of the family was staying in U.K and could not handle the property due to the reason of distance and thus, with the consent of all his family members, appointed his younger brother as the Karta even though there were other members who were older than him. This was held to be valid by the court as it held that under such situations, the younger member can be rightfully made the Karta.

With regard to the issue if minors can be a karta, it was established again in Narendra Kumar v. CIT[10] that if the minor left as the only one to manage, if under the supervision of a guardian. It must be noted that Guardians and Wards Act, 1890 (Section 21) does accede to the validity of a minor being in a “managerial position” of a Hindu Undivided family

FUNCTIONS AND RIGHTS OF KARTA

1. Powers of Management:

He may manage family affairs and business in the way he likes to do so. he may discriminate between the members of the family or to whom he may give some property and to one who does not get any share. Being the supreme head of the family, a karta holds the power to look after the family matters and the property that belongs to the family. With reference to the case of Bhaskaran v. Bhaskaran,[11] it has been held that even though a Karta’s ambit about property alienation is limited, his powers in management of the family affairs is rather absolute. The karta does hold the capacity to possess the property in totality and be the recipient of the income of HUF irrespective of its source.

Also, he holds some special rights like that of the power of eviction in which if there is some particular member who demands some specific portion of the family property without the karta acceding to such a demand, he can be evicted form that portion.[12]

His powers of management are deemed to be inherent and no interference is to be accepted even when he shows attributes of favouritism and bias towards certain family members with reference to maintenance etc. This is upon the discretion of the Karta and this cannot be challenged.

2. Power to Represent

The Karta is understood to be the sole representative of the family structure when it concerns any legal or even social matters.[13] When a specific suit is filed by the family in any court, the particular suit is filed in the name of the Karta and also when there is a suit against the family, the specific name is that of the Karta in the court.

This means that the Karta is clearly a representative of the whole family and the family, in itself, does not have a particular identity in corporate terms. So, when there is one particular judgment passed against the karta, it in totality binds all the existing members of the family even though they may not be individually responsible in the relevant act.[14] The expectation from the Karta is that in matters of litigation, he must show extreme levels of sincerity and effort. If due to any such lack, the litigation matter is lost, the family cannot take up this as an excuse for the decree to not be binding upon them.[15]

The karta does not have any greater interest in a manner of proprietorship when compared to any other member of the family but owing to his position as the karta, he holds a capability to dispose property.[16] With reference to minor in the joint family, it must be understood that when the manager makes a contract with an outside party and during that time, one of the members of the family has not attained majority, the contract cannot be deemed to be binding on the minor. This rule is from the Indian Contract Act, 1872 and is applicable here as well for the minor for the contracts relating to buying of immoveable property as well as to contracts made by the Karta for necessities.[17]

3. Power to compromise:

The karta has a power to compromise in any dispute relating to family property or their management. He may also compromise a suit pending in the court and it is binding on all members of the family. He can also compromise on family debts and other transactions.

4. Power to refer a dispute to arbitration:

He may refer any dispute to arbitration and the decision would be binding on all members of joint Hindu family.

5. Power Over Income:

The managerial aspect of the karta mandates the karta, the aspect of controlling his income and expenditure and if there exists any surplus in the family accounts, he has control over those accounts too. If the karta has expenses which the other family members don’t agree to, then these members have the option of demanding a partition and the karta has to appropriate their share including the amount they considered to have been inappropriately spent.   It was noted in Tara chand v. Reeb Ram that while taking accounts during the division of property, no coparcener must have a charge against him with the rationale that owing to his larger family requirements, a greater share of the joint family amount was spent on his own family.

6. To Gift Property

It is a commonly known fact that a karta may have a superior managerial authority but he cannot gift away family property unless there is a legal compulsion involved or for religious purposes etc.

7. Movable Property as gifts

The father or the Karta has the authority to gift ancestral joint family property to sons, daughters etc. as a matter of affection wherein the gift is in furtherance of “indispensible acts of duty, and family, relief from distress and so forth”. Such gifts do have limitation like a gift cannot entail the whole property to be given to one particular member as it cannot be then upheld as “gift of affection”.

8. Immoveable Property as gifts

The karta does posses the capacity to gift an individual, owing to few restrictions, for pious purposes. It was laid down in Guramma v. Mallapa[18]  that a father can gift his daughter a portion of an immoveable property if it conforms to the reasonability criteria, looking at the properties which are owned by the family. Though, it is not acceptable for a husband to gift any such property to his spouse under the clause of “Pious Purposes”.

 9. Gift to Strangers

The Karta only holds the right to gift properties to family members under some conditions and strangers cannot be a recipient of such a gift under no circumstances. Such a gift, if made, shall be deemed to be void ab initio.[19]

10. Power to Contract Debts

The karta has the power to contract debts for the family in accordance with their needs and these debts are binding upon all the members. The members cannot escape liability from these debts even upon acts of partition from the joint estate.[20] However, it has been established that the karta cannot be allowed to raise loans by giving in as security, the estate of a minor family member so as to start some trade of ancestral nature.[21]

Now, we shall deal with the liability ratio of the members for the contracted debt:

Liability of other members

During the situation wherein the karta contracted a debt on the family property, a member is not liable in a personal manner but rather, only to the limit of its interest. But in some circumstances wherein the contract is actually purporting to parties or when they can be treated as parties due to their conduct or if they have agreed to the arrangement, their limited does not remain limited. So the deeming of the members to be actual parties is essential to establishing the liability ratio.[22]

Burden of Proof Requirement

Any debt that has been contracted by a karta on behalf of the family is not inherently assumed to be one where the interest of the family is involved.

As stated in Mulla, Principles of Hindu Law:

“When the lender is familiar with all the circumstances of the family to which the money is lent and he knows whether the borrowing arose or not, the only way in which the family could be made liable in such a case would be by proof that the necessity did exist”.

The loan-provider is compulsorily required to look into the necessity of the loan for the joint family as the purpose of the loan is not supposed to be inherently presumed. Caution during the inquiry is enough to justify the loan but if it is a matter when the joint family has been taking loans since a no. of years, the loan-provider does not have to prove the necessity for every penny involved.[23]

POWER OF ALIENATION

Neither the karta nor any other coparcener has the right to alienate the joint property of the family but in exceptional situations wherein the alienation becomes binding upon all the members of the family. The Dharmashastra recognizes this power of the karta to alienate the property but under some specific situations only. They have been stated below:

• Apatkale (Necessity in legal terms)
• Kutumbarthe (Estate’s benefit)
• Dharmamarthe (Obligations of religious nature)
• Necessity in legal terms

The term legal necessity does not hold any precise definition due to the varied no. of cases that are seen and it being extremely difficult to explain it in exact terms. Still, under interpretation it can be stated that the legal necessity of a family is with regard to the necessities of a family and the alienation being in requirement of that need.

• Estate’s benefit

This is also a broad criterion for the alienation to take place. In it, the benefits which the estate gains through any such specified alienation by the Karta are to be considered as valid. Such beneficial contracts of property alienation are encouraged and the karta does hold the right to go forward under his prudent discretion.

Broadly speaking, benefit of estate means anything, which is done for the benefit of the joint family property. There are two views as to it. One view is that only construction, which is of defensive character, can be a benefit of estate. This view seems to be no longer valid. The other view is that anything done which is of positive benefit, will amount to benefit of estate. The test is that anything which a prudent person can do in respect of his own property. It was re-iterated through various case laws[24] that if the property owned by the specific joint family is sold by the karta due to a valid legal necessity and also that the price in return was also reasonable, just the fact that a portion of the price was not considered to have been not applied for the purpose of necessity, cannot render the whole mechanism invalid.

Considering a limitation in the matter, through this paper, it has been analyzed that even though the Karta holds supreme managerial and alienation powers in the family but if he gets into a contract where it is apparent that the family cannot complete its obligations in monetary terms, the liability cannot be shifted to ancestral property sale.[25] Nevertheless, if there is an acquisition made by the Karta on behalf of the joint family even through the loss of a portion of an ancestral property, it is binding upon the minor members of the family too and they cannot impeach this contract for which the benefit has been enjoyed, upon attaining majority.[26]

Also, it is a cardinal rule that the actions of the karta have to be justified with the clause of necessity or benefit to the family for these members to be bound by the actions of the Karta. Such alienation cannot be considered to be for the purpose of a legal necessity “if the legal remedy to recover the debt has become time-barred.” He can alienate the property with his own discretion due to some necessity or through the normal process of having a totality in family assent towards such alienation.

Thus, it can be safely concluded through the research that Karta can only have one specified limitation which is that:

“A karta must act with prudence; prudence implies caution as well as foresight and excludes hasty, reckless and arbitrary conduct and such alienation on part of the karta without the family purpose or necessity clause, is void”

For this question of prudence, the consideration’s sufficiency is an important condition for such judgment.

As analyzed though precedents, it cannot be stated that whenever a karta requires monetary sums in order to pay the pre-emption requirements and for the prices of new property, it is always without any requirement in legal contrivance and thus, outside the ambit of the father in the family.  Also, it cannot be stated that the karta is supposed to borrow amounts for such fresh acquisition by pre-emption. These matters have to be dealt according to the special existing circumstances each time.[27]  Also, during times when the money borrowed by the Karta is for his individual purposes, he is not allowed to mortgage or use the family property in any manner to fulfill his own liabilities.

CONCLUSION

As already mentioned, the karta in a Hindu joint family holds quite an extra-ordinary position with reference to its understanding and complexity. This sui generis nature of the system holds an important position in understanding how a joint family functions with reference to the numerous duties and varied works the individual members of a family are involved, being clubbed together in a single household. The concept of Karta has an origin that dates centuries back and it still holds its ground due its various functional elements. One family that entails a no. of members who live together and hold joint property, necessarily require a Karta to boost the cohesive aspect of such a family with reference to its dealings and ventures.

The idea of a karta has been diluted in present times to maintain reasonability in the decisions and judgments that a karta binds the joint family to. There are no absolute powers as that of the previous “patriarch” as various legal remedies are available and thus, the managerial system of having a central head works in varied mannerisms.

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[1] Ms. Shradha Arora, “KARTA OF A JOINT HINDU FAMILY AN ANALYSIS OF THE QUALIFICATIONS, POWERS AND POSITIONS OF A KARTA” http://journal.lawmantra.co.in/wp-content/uploads/2015/10/7.pdf

[2]ANKITA GUPTA: Karta/Manager and his Legal position: A Social Legal Study http://www.manupatra.com/roundup/341/Articles/Karta%20and%20his%20Legal%20Position.pdf

[3] Suraj Bansi Koer Vs. Sheo Prasad, (1880) 5 Cal. 148.

[4] Abhirup Ghosh and Debjyoti Basu, “Evolution of joint family structure in India and the role of legislative inroads” file:///E:/Documents/Downloads/Chap-WBMay_08_p17.pdf

[5] Man v Gaini, (1918) 40 All. 77

[6] Keasri, U P D (2006), Modern Hindu Law, Central Law publications, Allahabad, p 348-351.

[7] AIR 1973 Ker 192.

[8] Sidappa v. Linappa, 42 Mys HCR 669

[9] Mudit v. Ranglal, (1902) ILR 29 Cal 797; Narendra Kumar v.  Commissioner of Income Tax, AIR 1976 SC 1953

[10] AIR 1976 SC 1953

[11] (1908) ILR 31 Mad 318.

[12] Baldeo Das v. Shamlal.

[13] Singriah v. Ramanuja, AIR 1959 Mys 239 (DB)

[14] Rajayya v. Singa Reddy, AIR 1956 Hyd 200.

[15] Krishnamurthi v. Chidambaram, (1946) ILR Mad 670.

[16] Rajayya v. Sangareddy, AIR 1956 Hyd 200

[17] AIR 1930 Cal 457 (DB)

[18] AIR 1964 SC 510

[19] Guramma v. Mallapa, AIR 1964 SC 510

[20] Bankey Lal v. Durga Prasad, ILR (1931) 53 All 868 (FB)

[21] 48 PLR 454: AIR 1947 Lah 199:231 IC 383 (DB).

[22] Vishan Singh v. Narnajan Sngh, 59 Punj LR 182.

[23] Radhakrishnadas v. Kaluram, AIR 1967 SC 574

[24] AIR 1941 ALL 174: 1941 ALJ 129: 1941 AWR (HC) 70.

[25] AIR 1939 All 486: 1939 ALJ 604

[26] AIR 1956 Oudh 302 (DB)

[27] Subramanium v. krishnaswami, AIR 1972 Mad 377: 85 Mad LW 211