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Karta in a Joint Hindu Family

Let's assume a company without a director or a team without a manager. The functioning of the company and the team won't stop without them, but will definitely be hampered. They are the position holders who manage the major affairs of the company and the team, and also governs their proper functioning.

This is how the position of Karta in the Joint Hindu Family is. For the Joint family, he is the manager and the person who governs the proper and smooth functioning of the family. That's a very unique and powerful position in the family. But with powers and position, comes a pool full of responsibilities which are to be fulfilled, keeping in mind the interests of the family members. Karta is the senior-most male member of the family. The word senior-most is appropriate in order to represent the family but why is the senior-most 'male' member has to be a Karta?

Why is it only the senior-most 'male' member and not the female?
Well, the answer lies in the patriarchal roots of our Indian society. No doubt that we have evolved and believes that the generation has changed, patriarchy has become an older concept, but that has been a system engraved in the roots of our culture and as a result, the Karta is the 'senior-most male' member of the family. The term “Karta” is well defined in an 18th century case of Suraj Bunsi Koer v. Sheo Persad[1].

Every member of the Joint family has its own rights and interests in the property, which are represented and managed by the Karta. Though there are separate powers, but the joint family stands united where the matters of the family are taken and dealt together, in such situations, the cohesive structure comes in the front. He neither shares a principal agent relationship with the family members, not a relationship of a trustee and its beneficiaries instead he shares a fiduciary relationship with them.

This research paper shall discuss questions such as, who can be a Karta, what powers and duties does he have and what are the new amendments that have taken place in respect of these questions.

Chapter One- Who Can Be A Karta?

It is the presumption of the Joint Hindu family system that the senior-most male member of the family becomes the Karta of the family. This position is merely a result of the prevalent patriarchal system of the society and not a result of any prior agreement or any consent of the other coparceners. He is the Karta by virtue of the fact that he is the senior-most male member of the family and as long as he is alive and is in a position to manage the family affairs, he will continue to be the Karta.

In a case where he is going through a permanent disease, insanity, or any other disqualifications, his rights will be defeated and the next 'senior-most male' member will take his place. However, there might be situations where the Karta is of unsound mind, and in such cases, he cannot continue his position and his position has to be taken up by the senior-most coparcener.

The priority is given to the father and as long as he is alive, he is the Karta of the joint family, but after his death, the position and the power transfers to the other senior-most male member of the family, who can be an uncle (if the coparcenary consists of uncles and the nephews), and can also be the eldest brother (if the coparcenary consists of brothers in the family). The Karta has the option of expressly relinquishing his powers if he does not wish to continue on his powers and position.

To understand the next concept, let's assume a situation that the Karta is expressly ready to relinquish his position because of certain reasons, and the next senior-most member cannot take up the position because he is suffering from a permanent disease, and none of the other coparceners are ready to manage the affairs of the joint family, then how will such a situation be dealt?

In circumstances like this, a junior member can also be appointed as Karta but with due consent of all the other coparceners. Unlike Karta, the appointment of the junior member is based on the consent or agreement of the coparceners. Since, the appointment is based on the consent, this consent can be withdrawn at any time. In a case decided by the Supreme Court[2], certain circumstances were laid down where the junior member of the family can become the Karta namely:
  1. In case when the senior-most member is unable to take care of the affairs of the joint family,
  2. In situations where the Karta relinquishes his powers and position, expressly or by necessary implications.
  3. In certain extraordinary circumstances, when Karta is not available to discharge his duties, and
  4. In absence of the father whose whereabouts are not known or he is not in the remote place because of some extraordinary circumstances and his return is not anticipated or is unlikely for a reasonable time.[3]
However, just because a Karta is the junior member in this case, it does not mean that his locus standi or capacity can be challenged. For example- The junior member, appointed as Karta, filed a suit for eviction against a tenant. In such a case, the tenant cannot challenge his capacity or locus standi to file the suit just because he is not the senior-most member of the family.
With this, the question arises whether this junior member can be a minor, and if yes, can minors be a Karta?

Certainly, yes. These junior members may or may not be the minor. In case, he is the minor, and the only person who can take up the responsibilities, then in such a situation, a minor has to act as the Karta through his guardian, till he attains the majority. Though before the 2005 amendment, the women did not get any right over the joint Hindu family property, but it was held in the case of Shreya Vidyarthi v. Ashok Vidyarthi [4], that the mother of the minor can act as the Karta, in capacity of his legal guardian and can perform the duties accordingly.

With this arises a question as to, can females be a Karta?
Looking at the scenario before Hindu Succession (Amendment) Act, 2005, the females were not granted the status of coparcener in the Joint Hindu Family system. However, after the amended Act, the females were granted similar coparcenary rights like that of a male. Hence, it will be wrong to completely say 'no' in order to answer the question, whether females can be a Karta or not.

The females can be Karta of the Joint family in case she does not have a brother and her father has also passed away. In such a situation she will have same rights and powers as that of a male Karta. Hence, it can be said that, generally, a female cannot be a Karta but in certain circumstances, they can be granted the status of the Karta of the Joint Hindu Family property.

Chapter Two- Powers Of The Karta

Karta of the Joint Hindu Family has several powers; however, it is to be made sure that he is acting in the best interest of the family members and can't misuse them for his personal reasons:
  1. Power to manage the affairs of the Hindu joint family is an absolute power granted to the Karta[5], where the Karta has the right to appear in all family matters and also in all the properties associated and belonging to the joint family. However, power comes with a great responsibility and here, if there is any mismanagement on the part of Karta, then he cannot be questioned. Which also gives him a safeguard route from positive failures. He is not obligated to save or invest funds and property, instead, he has the discretion to decide questions related to such economies.

    Karta can discriminate between the members of the joint family, but maintenance or use and occupation of property to any coparcener cannot be denied. Therefore, it can be said that this power is almost absolute.
     
  2. A joint family business is a very significant part of a Hindu joint family and Karta, being the head, has the power to manage this business. He runs this business and takes necessary measures in order to promote, run and manage the business.
     
  3. In all the matters, whether legal or social or religious, Karta has the power to represent the joint family. In lieu of this representation, if an act is done by the Karta, then such an act is binding on all the members of the family. The Karta can represent and enter into the transactions on behalf of the members of the family and such a transaction will have a binding effect.

    If the Karta represented the joint Hindu family in any legal proceedings, then the decree passed by the court will apply on all the members of the family.
  4. Karta has power over the incomes and the expenditures of the joint Hindu family, as all the income earned out of the joint family property and business, is handed over to the Karta and he has the power to allot the incomes to the members of the family and take reasonable care of their requirements. Under the Mitakshara law, the members of the joint Hindu family, do not have any definite share in the income gained from the joint family property and business.
     
  5. One of the major powers granted to the Karta is with respect to the alienation of the Joint Hindu Family property. This power can be exercised, only in certain exceptional cases and hence, is restricted to a large extent. There are three exceptional situations when the Karta can exercise his power of alienation, namely, in case of a legal necessity, for the benefit of the estate, and for the acts of indispensable duty.

    If the alienation is required to be done without the existence of these exceptional cases, then the consent of the coparceners is required and will be voidable at the option of the coparceners[6]and then, the decision of alienation will be binding.

    Legal necessity is a situation such as, repayment of loan, decree passed by the court, litigation expenses to protect the estate, etc. In the case of DevKishan v. Ram Kishan[7], it was said that an alienation for the purpose of arranging marriage expenses for the marriage of a minor, will not come under the purview of lawful alienation.

    Benefit of the estate is a situation where the alienation is done for a positive benefit of the Joint Hindu family property, such as, to protect the property from any deterioration, etc. in case of Palaniappa v. Devsikmony[8], the Privy Council laid down the elaborated illustrations with regards to the incidents of the benefit of estate.

    Considering the alienation in case of indispensable duties, it includes situations where the property needs to be alienated to fulfil certain religious, pious or any charitable acts, such as, alienation to receive money for last rites of a family member, as this comes under the purview of pious obligation, etc.
     
  6. As we saw till now that Karta is the representative of the Joint Hindu family and also deems to act in the most prudent way and for the best interests of the family. This gives him a wide power to not be bound to keep the accounts with respect to the expenditure from the family funds. However, even in cases where he was asked to do so, he has to render the accounts existing on the date of such demand and not the past accounts. An exception lies in the case of charges against him for fraud, misappropriation, etc., where he can be forced to render the past accounts as well.
     
  7. It becomes the responsibility of the Karta to acknowledge and pay off the debts along with the interest, due on the family. It does not mean that the debt has to be contracted by the entire family, even if it is contracted by the Karta, alone, it has to be paid off by binding the share of all the coparceners, and even after partition, the liability continues. Karta has the power to contract debts by taking loan in case he has to use it for family business or for any other legally acceptable purpose. However, the estate of the minor cannot be given for raising the loan amount.
     
  8. Karta has to power to act on behalf of the family in case of any disputes and initiate compromise, if needed. However, this compromise must be for the welfare of the family and not for his personal interest. If this principle is followed, and the Karta entered in the compromise for the best interest of the family, then all members, including minors, are bound by this.

Chapter Three- Duties Of The Karta

  1. As we discussed in the powers of the Karta, that he is not bound to keep the records of the transactions/funds used, etc. But, as held in the case of Girijanandini Devi v. Brijendra Narain[9], the court said that though Karta is not bound to keep accounts, but in cases where a coparcener is seeking partition, he can require the accounts from the Karta. In such a situation, it is the duty of the Karta to render the accounts, if the coparcener demands it at the time of partition. Also, the Karta can be held liable for any misappropriation, or fraud.
     
  2. It is evident from the previous read topics that the Karta acts on behalf of the Joint family and that he has the power to contract debts, but along with that, it is the duty of the Karta to realise the debt due to the family. He has the power to make reasonable reductions and settle accounts with the debtors, but he cannot give up on the entire debt.
     
  3. Since the Karta has the power to spend the family money, it does not mean that it can be done unreasonably. It is the duty of the Karta to spend reasonably and only for the purpose of the family benefit. The Karta is responsible to act in the best interest of the family and hence, it is his duty to adhere to the same.
     
  4. A joint Hindu family business is managed by the Karta, but what if the Karta has to start a new business? He can do that, but in order to do it, he has to seek consent from all the other coparceners. Business has a characteristic of uncertainty, which means that the share of the other members of the family can also be imposed to risks. Hence, this is the duty of the Karta to not start a new business without the consent of other coparceners in the Joint Hindu family.
     
  5. We read that the Karta has the power to alienate the Joint Hindu property, but that can only be done in certain circumstances, which are, legal necessity, indispensable duties and benefit of estate. Hence, it is the duty of the Karta to not alienate the coparcenary property except for the situations prescribed. If he alienates the property in the exceptional three circumstances, then he need not take any consent, as it is justifiable.

Chapter Four- Amendments In The Law

There was a series of amendments that were bought in the Hindu Succession (Amendment) Act, 2005. The 174th report of the 15th Law Commission in 2000, recommended various changes in the succession laws of the country and the main idea was to abolish the discrimination against the women by not granting them equal status in the succession laws. This was the key issue and hence, laid to the foundation of the Hindu Succession (Amendment) Act, 2005.

One of the major amendments that we need to look into for the purpose of this paper is, whether women were granted the right to become the Karta of the Joint Hindu Family, or not?
The amendment gave the right to the females to attain the position of the coparcener in the family system, irrespective of their marital status. They were granted equal rights like that of the son and were also given the succession rights form birth, like the sons. They are equally liable and have equal powers which a male coparcener had.

The answer to the question whether the female can be granted the status of Karta or not, was answered in the case of Mrs. Sujata Sharma v. Shri Manu Gupta [10]. In this case, it was decided that since the amendment has given same rights and powers to the females like the son, in the coparcenary system, they also have the right to manage the same system and therefore can be the Karta of the Joint Hindu family.The court acknowledged that no restrictions regarding female being the Karta, can be found in Section 6 of the HSA.

Hence, to put it up in a concluded way, it can be stated that after the death of the father, if the next eldest member is the female, then she will be granted the status of the Karta of the family. The amendment removed the prevalent discrimination based on their marital status, which was primarily done by certain state legislations. The judgement helped in taking one more appropriate step to bring in the equality of women in the succession laws of the country.

Another question that came up in the case of Vaishali Satish Gonarkar v. Satish Keshorao Gonarkar [11] that, whether this amendment will apply prospectively or retrospectively. It was upheld in this case that the Hindu Succession (Amendment) Act, 2005, will have a prospective effect. The daughters born before 9th September '2005, will be disentitled to claim equal interest in the Joint Hindu family.

Therefore, the Act will be prevalent for future uses. But this was challenged in the case of Badrinarayan Shankar Bhandari v. Omprakash Shankar Bhandari [12], where the court was of the opinion that the amended Act shall apply to all the daughter born before 17th June '1956.

However, the question was again challenged in the case of Prakash v. Phulavati [13], where the court said that the amended Act will be applicable to all the daughters alive on the date when the amended Act came into force, i.e., 9th September '2005, whether she was born prior to it or not.

Conclusion
Well, after discussing the paper, it may be an inference that Karta is a powerful position in the Joint Hindu family system. It is true, but is cannot be denied that it serves a very important and certain specific purposes. One of the purposes could be to avoid multiple claims within the same family, as Karta represents the family, resulting in centralization.

The Karta cannot just exercise his powers freely in all cases and certain checks have been imposed on him, in order to make sure that he does not misuse the power given to him, in any case. However, if he does so, there are several remedies that have been provided to the Joint family members, so that their interests can be protected. Legal framework acts as a shield for the members, in case of despotic behaviour shown by the Karta.

There might be an interpretation that the relationship between the Karta and the members of the HUF looks like a principal-agent relationship, but that is not true. Can it be compared with a relationship of Trustee and its beneficiary? Partially yes, but can also be denied as, the Karta does not have the same obligations like that of a trustee, like, he does not have to economize or account for any past relationships, etc.

Hence, the position of the Karta is unique, with several powers, but many controls on that too. After the amended Act that was passed on 9th September '2005, the law granted same rights to the females like that of the males of the family and it was a big step towards equality in succession laws. This not only made women economically independent, but also made them socially secure.

End-Notes:
  1. 1880 ILR 5 Cal 148
  2. Tribhovan Das Haribhai Tamboli v Gujarat Revenue Tribunal [1991] 3 SCC 442
  3. Nopany Investments (Pvt.) Ltd. v. Santokh Singh, 2007 (13) JT 448
  4. (2015) 16 SCC 46.
  5. Bhaskaran v. Bhaskaran
  6. CIT v. Gangadhar Sikaria family trust (1983) 142 ITR 677
  7. AIR 2002 Raj 370
  8. 1917 P.C. 68.
  9. AIR 1967 SC 1124
  10. CS (OS) No. 2011/2006
  11. 2012 (5) Bom CR 210
  12. [2014] SCC OnLine Bom 908
  13. (2016) 1 SCC (Civ) 549

    Award Winning Article Is Written By: Ms.Somya Goel

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