![Who is a Karta/Manager? Explain the power/duties of a Karta or Under what circumstances can a Karta alienate the property of joint family without the consent of coparceners? [2001 R.J.H.C]](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHG5jUAp8fdetf3Dg58qY-C8DI1BIC8CjeqCe7BR8DlXHiQpIsim96kEgxUl5iEe7ev38fwEXU6Mp4wPMtKWkk4AAmJYjfG8AdcnO0HgkjUivVnT08PvBmtYquqChUXxzY44DS1G8JTus/w700/image.png)
Who is a Karta/Manager? Explain the power/duties of a Karta or Under what circumstances can a Karta alienate the property of joint family without the consent of coparceners? [2001 R.J.H.C]
Karta:
The manager of a joint family is called karta. The Hon’ble SC has held that only a coparcener can be the karta/manager of a joint family.
Property belonging to joint family is ordinarily managed by the father or other senior member for the time being of the family. However, where the senior member gives up his right of management either expressly or impliedly, a junior member may be appointed as karta.
The only respect in which a karta
has a superior right is that a karta has a power of disposition for causes
recognised as just and proper under Hindu law of the whole family property
including the interest of the junior members.
Position of Karta:
The karta being the head of the
joint family acts on behalf of the members of the joint family. The position of
the Karta is “sui generis”. Sui generis in the sense that his position is not
that of the Manager of a Commercial Firm and his relationship with the other
members is not that of the principal and agent or firm and partners.
In Chandrakant vs. C.T.R, the Hon’ble
SC observed that there can be a partnership between Karta and other members.
The karta may contribute capital while the members may contribute labour and
skill.
However,
the powers of karta are not absolute or unlimited. Within the ambit of his
sphere, he possesses such vast powers which no once can possess.
Power /
duties of a Karta:
Following
are the powers/duties of a Karta:-
1. Power
over income & expenditure
2. Liability
to account on partition or otherwise
3. Power to
Contract Debts for family purpose and
family business
4. General
powers over joint family business
5. Alienation
for legal necessity
6. Power to
refer to arbitration
7. Power to
compromise
8. Power to
give valid discharge for debts
9. Family
arrangement or family settlement
10. Power to
acknowledge and part payment of debt
11. Relinquishment
of debt
12. Parties
to suits
1. Power
over income & expenditure:
A Karta has control over income and expenditure and
is a custodian of surplus if any. So long as the karta spends the income for
the purposes of maintenance, education, marriage, shraddha and other religious
ceremonies of the coparceners and of the members of their respective families
he is not under obligation to economise or save. But, if the karta spends more
than the income, the remedy is to demand a partition.
In case of misappropriation of
income or expenditure for purposes other than those the joint family was
interested in, the karta is liable to make good for the same to the joint
family.
2. Liability
to account on partition or otherwise:
In the
absence of proof of misappropriation or fraudulent and improper conversion by
the karta, he is liable to render accounts on partition only for assets which
he has received and not for what he ought/might have received if the family
money had been profitably dealt with.
But, it has been held in Bengal that any coparcener
may without bringing a suit for partition require the karta to render accounts
for his dealings with coparcenary property and the income thereof.
3. Power to
Contract Debts:
A karta
has implied authority to borrow money for family business and where a joint
Hindu family has no business at all the karta may contract debts for a joint
family purpose.
If a karta borrows money on a promissory note for a
joint family business or to meet a joint family necessity, the other members of
the joint family may be sued on the note though they are not parties to the
note but in such a case their liability is limited to their share in the joint
family property unless it is shown that they are contracting parties.
In Balaiah
vs. Budagaiah, the father incurred debts for curing his venereal disease.
The sons contended that the debts would not bind them since they were
avyaharika debts
The Court observed that curing venereal disease is
only for health purpose which would not constitute avyavaharika and held that
the sons were liable.
4. General
powers over joint family business:
Besides the power to contract
debts for the family business, the manager has the power of making contracts,
giving receipts and compromising or discharging claims ordinarily incidental to
the business.
5. Alienation
for legal necessity:
Alienation
means conveyance or transfer of property to another. Legal necessities have
been held to be:
(i) Payment
of government revenue and of debts which are payable out of the family property
(ii) Maintenance
of coparceners and of the members of their families
(iii) Marriage
expenses of coparceners
(iv) Performance
of the necessary funeral or family ceremonies
In Gangi
vs. Tammi, the Privy Council has said that a dedication of a small portion
of family property for the purpose of religious charity may be valid if made by
a karta.
(v) Costs of
necessary litigation in recovering or preserving the estate
(vi) Costs of
defending the head of the joint family or any other member against a serious
criminal charge
(vii) Payment of debts incurred for family business or other necessary purpose
(viii)
Property sold in order to fulfill
tax obligations incurred by a family business
(ix)
Selling of joint property for the
purpose of migrating to a new place for a better living
The karta has wide discretion in arriving at a
conclusion as to legal necessity and as to in what way such legal necessity can
be fulfilled best, by mortgage or sale. An aggrieved coparcener who thinks it
is not for legal necessity can pray for partition and for recovery of
possession of his share.
6. Power to
refer to arbitration:
A Karta or
a father has power to refer to arbitration disputes relating to joint family
provided such reference is for the benefit of the family. The other members of
the family including minors are bound by the reference and by the award made
upon it. [ Check - Jagan Nath vs. Mannu
Lal, (1894) 16 All 231 ]
The reference may be in respect
of disputes between the family and an outsider or disputes between the members
of the family themselves an example being as to shares on partition.
7. Power to
compromise:
A karta has power to compromise for the benefit of
the family. It binds the other members of the family including minors.
8. Power to
give valid discharge for debts:
A karta has powers to give a
valid discharge for a debt due to the joint family. Hence, if one of the
members is a minor, he cannot claim the benefit of S. 7 of the Limitation Act.
9. Family
arrangement or family settlement:
A family arrangement or settlement occupies a
position different from a commercial one. Members of a joint Hindu family may
to maintain peace or to bring about harmony in the family may enter into such a
family arrangement. A family arrangement must be entered into by all parties
thereto. If such document is not signed by all parties, it will not be
construed as a family arrangement.
10. Power to
acknowledge and part payment of debt:
A Karta
is competent to acknowledge a debt or to pay interest on a debt or to
make part payment of a debt so as to extend the period limitation but
has no power to revive a time barred debt by passing a promissory note.
11. Relinquishment
of debt:
A Karta
has no power to give up a debt due to the joint family.
12. Parties
to suits:
A Karta who mortgages the entire interest of the
family it must be deemed that he has acted in the transaction on behalf of the
family. In such a case, other coparceners are not necessary parties to the suit
and are bound by the decree in the suit.
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