Powers of Karta or Manager Regarding Joint Family Property
In Ramdayal and others v. sunny Bhanwarlal and others, AIR 1973 Raj. 173, the Rajasthan High Court held that regarding the transfer of joint family property by the manager, the principles of law are well settled and are as follows:
- The Manager of a joint Hindu Family has the power to alienate (transfer) for value the joint family property so as bind the interests of both adult and minor coparceners in the property, provided that the alienation is made for legal necessity (Apatkale) or for the benefit of the estate (Kutumbharte) or for Indispensable duties (dharmarthe) which are religious, pious, or charitable such as sradha, upananyana, and performance of other necessary sanskars. Payment of debts incurred for family business or other necessary purpose constitute a legal necessity.
- That the burden of proving legal necessity to support alienation is upon the alinee.
- That the alinee can succeed not only on proof of legal necessity but also on proof that the alinee made reasonable inquires and was satisfied as to the existence of the legal necessity.
It is sufficient it to say here that the Karta or the manager can create a charge against the joint family property, only if the loan for which the charge is created, is taken for a purpose necessary or beneficial to the family. The burden of proving legal necessity lies on the banker and the banker has not only to prove the legal necessity but also to prove that it made reasonable inquiries and was satisfied as to the existence of the legal necessity.
1. Kartha is the senior most male member(most of the times) of the family (Jandhyala Sreerama Surma v. Nimmagadda Krishnavenamma, AIR 1957 AP 434) 2. Only the Kartha has the right to manage the property and business of the HUF. 3. Kartha can enter into contract on behalf of the HUF and bind all the members to the extent of their share in the property/business 4. If the coparceners so desire, all the coparceners and Kartha may authorise any one or more adult coparceners to manage the business. Such a person (s) is/are known as “Manager(s)”
The last point was also upheld by the Supreme Court ( quoting from Mulla's Hindu Law ) in NarendraKumar Modi v. CIT (1976) ITR 109 (SC)
Read more about this topic: Hindu Undivided Family
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