Who is a Karta in a Hindu Undivided Family (HUF)?

[ecis2016.org] A Karta is the eldest coparcener of the HUF who acts as the head and is responsible to manage its affairs, legal and financial

Under the Indian succession laws, a Hindu Undivided Family (HUF) consists of coparceners and members. The eldest coparcener of the HUF is the Karta of that family, who acts as the head and is responsible for managing its affairs, legal and financial.

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In the capacity of a manager of an HUF, a Karta enjoys this position by way of the law and no agreement of coparceners or members is required, for him to hold the position. While his role towards the other members is fiduciary, he is not really accountable to them.

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Who is a karta?

Typically the senior most male member of a joint family, the karta is also known as the head of the family. For the greater good of the family, the karta can take a variety of decisions fitting to his unique position in the family. The liability to manage the family affairs and keep its book in order, lies with the karta of the HUF. The position of the karta in an HUF is acquired by his seniority and governed by seniority. This is precisely why he can quit the position of being the karta of the family either by resigning or relinquishing his post. The position of a karta is not defeasible.

Also know that a karta does not work in the capacity of an agent or a trustee but a guardian and a custodian.

How is a Karta appointed in an HUF?

First of all, note that a Karta continues to retain his position as the head of an HUF even if he is not physically fine. An aged patriarch with failing physical health will continue to be the Karta of the HUF till his death.

In case of the demise of the Karta of an HUF, the eldest surviving coparcener in the family automatically becomes the Karta. Know that a junior member of the family can also be a karta if all the members of the family vote to appoint him as such.

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Difference between members and coparceners

It is important to note here that an HUF has both, members and coparceners. While the former becomes part of the HUF through matrimonial alliances, the latter become members by way of birth. That way, as soon as a son is born, he becomes a member, as well as a coparcener of an HUF. His bride, on the other hand, becomes a member of the HUF by virtue of her marriage but she is not a coparcener. So, while all coparceners are members, not all the members are coparceners. For someone to be appointed as the Karta of the HUF, they have to be a member in the capacity of a coparcener. The Supreme Court (SC) in its verdict in the CIT versus Seth Govindram Sugar Mills case, held that coparcenership is a necessary qualification for an HUF’s management.

As for the process, there is no formal provision for the appointment of a new Karta. However, to proceed with the legal and financial matters of the HUF, all members will have to issue a written document about the death of the old Karta and the appointment of the new Karta. To change the name in the HUF account, for instance, the bank will require his death certificate, along with the document proving the appointment of the new Karta.

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Can a junior coparcener be a Karta?

In case all the coparceners and members give their consent for a junior coparcener to be the Karta of an HUF, he could be appointed as one.

Can a minor be a Karta?

A minor son could act as the Karta of a HUF in the absence of a father.

Can a woman be a Karta of an HUF?

While delivering its judgment in Sujata Sharma versus Manu Gupta and others case, the Delhi High Court (HC) has ruled that a woman can be the Karta of a family in her capacity as a coparcener, if she is the eldest member of the family. The HC also said that the same has been made possible through an amendment in the succession law in 2005, when the SC placed women on the same footing as men by providing them coparcener rights in an HUF. Even after her marriage, a daughter remains a coparcener, as well as a member of the HUF after the amendment in Section 6 of the Hindu Succession Act.

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Rights and duties of a Karta

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Owing to his fiduciary role in the family, the Karta is expected to take decisions for the general well-being of the family and its businesses. In his bona fide role, a Karta takes decisions on behalf of an entire family and enjoys powers that allow him to:

• Enter into contracts
• Take debt for family purposes
• Acknowledge debts
• Refer matters for arbitration
• Enter into compromises
• Alienate joint family properties
• Represent the business in suits, etc.

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Karta’s role in property alienation

The Karta is the absolute manager of family property and this right cannot be challenged in the court of law. Coparceners can only seek partition, in case of a disagreement. Members, on the other hand, cannot seek partition but are entitled to get their due share, as and when the partition takes place.

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Unless it is done for the benefit of the HUF’s estate, because of a legal necessity or to perform an indispensable duty, a Karta cannot alienate family property without taking all the other coparceners on board.

Under the Hindu law, the Karta could decide to alienate the family estate:

• At the time of legal necessity or emergency (आपत्काले)
• For the benefit of estate of the family (कुटुम्बर्थे)
• To perform indispensable or religious duties (धर्मार्थे)

The Karta’s decision to alienate the property in the three above-mentioned special circumstances cannot be legally disputed.

However, if he were to do so in the absence of these reasons, his decision will be null and void and he could be dragged to court. If a dissatisfied party were to still bring the matter into court, the burden of proof will also lie on the Karta.

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