The Karta: Position, Powers, Privileges and Obligations
Chapter Forty-Three
Syllabus topic 2.4, "Karta of the joint family, his position, powers, privileges and obligations"
Pages 258 to 263 of 477
In one line
The senior-most coparcener manages the family property, and the law gives him powers no ordinary agent has because it also holds him to duties no ordinary agent owes.
Position
Who is karta
The senior-most coparcener is karta. The office goes by seniority, not by election, and not by competence.
Three rules follow.
He holds by right, not by appointment. He does not need the consent of the other coparceners, and they cannot remove him for incompetence.
A junior coparcener may be karta by agreement. Where the senior coparcener gives up the position, expressly or by conduct, or is absent, or is incapable, the others may agree that a junior act as karta.
A minor cannot be karta, though a minor is a coparcener, because he cannot manage. Where all the coparceners are minors, the mother or guardian may manage the property as a de facto guardian, and that is a different office with much narrower powers, taken in [The Powers of a Natural Guardian, and the De Facto Guardian].
Can a woman be karta
This is the examinable question and it has two cases and one distinction.
Commissioner of Income-tax v. Seth Govindram Sugar Mills Ltd, AIR 1966 SC 24, decided on 26 March 1965.
Facts. A joint Hindu family of two branches owned a sugar mill. After partition the two kartas entered into a partnership in 1943 to run it, each representing his own family, the deed providing that a partner's death should not dissolve the firm and that his heir or nominee should take his place. One karta died in 1945 leaving three widows and two minor sons. The other carried on the business, and the firm sought registration as a partnership.
Held. A joint Hindu family as such cannot be a partner of a firm, but it may through its karta enter into a partnership with the karta of another family. And, decisively for this chapter, a widow, though a member of a joint family, cannot become its manager. Two High Court decisions to the contrary were overruled. It followed that the partnership ended when one of the two kartas died.
Why it matters here. It is the authority every textbook cites for the proposition that a woman cannot be karta. Note exactly what it decides: it is about a widow, who is a member of the joint family and has never been a coparcener.
Manu Gupta v. Sujata Sharma, RFA(OS) 13/2016, Delhi High Court, decided on 4 December 2023.
Facts. The last karta of the D. R. Gupta and Sons Hindu undivided family died in February 2006. Sujata Sharma, a daughter of a deceased son of the founder, claimed to be the next Karta as the eldest coparcener, relying on the Hindu Succession (Amendment) Act 2005. Most members did not object. Manu Gupta and three others did, arguing that kartaship owes its provenance to Hindu custom, that the 2005 amendment was meant only to equalise the division of property and not to confer the office, that the office remains confined to the senior-most male coparcener, and that a daughter might at most be recognised as a manager.
The Karta: Position, Powers, Privileges and Obligations
Held. The appeal was dismissed. Having held that she was entitled to be the Karta under law, the Division Bench declared Sujata Sharma to be the Karta of the family for the purpose of representing it before the Competent Authority. The Court also observed that the position of Karta is a legal entitlement which has no bearing on who actually performs the managerial functions, so that the appellant's having in fact managed the property did not give him the title.
Why it matters here. It supplies the modern answer, and it does not require Seth Govindram to be wrong. The classical rule was that only a coparcener may be karta. In 1965 no woman was a coparcener, so no woman could be karta. Since 9 September 2005 a daughter is a coparcener by birth, so the eldest coparcener may be a daughter, and the office follows.
Cite Manu Gupta as what it is, a High Court decision. The Supreme Court has not decided the point.
What the karta is not
He is not a partner, and the family is not a partnership. Seth Govindram says so in terms.
He is not a trustee in the strict sense. He is not accountable for past dealings in the way a trustee is, and he need not keep accounts unless partition is demanded.
He is not an agent of the coparceners. He does not derive his authority from them and they cannot revoke it.
He is not a co-owner with a defined share any more than any other coparcener.
The classical description is that his position is sui generis, of its own kind, and that is the phrase to use.
Powers
Power of management. He manages the family property and business, and his management is not open to question by the other coparceners merely because they would have managed differently.
Power to represent the family. He represents it in all matters, legal, religious and social. A decree against the karta in a suit relating to family property binds the whole family, including minor coparceners, provided he acted bona fide, and that is one of the most consequential powers in Hindu law.
Power to contract debts. He may contract debts for family purposes, and such a debt binds the whole family and every coparcener's interest.
The Karta: Position, Powers, Privileges and Obligations
Power to alienate. He may alienate joint family property, but only for legal necessity, for the benefit of the estate, or for indispensable religious duties. This is the largest single topic in the module and is [Alienation of Property: Separate and Coparcenary].
Power to acknowledge and to refer to arbitration. He may acknowledge a debt so as to extend limitation, and may refer a family dispute to arbitration.
Power to enter into a family arrangement. He may settle a dispute by a bona fide family arrangement binding on all, and the courts uphold such arrangements readily because they preserve the family.
Power to give a valid discharge, and to receive payment on behalf of the family.
Privileges
MU prints this as a separate word from powers, so it should be answered separately, and the difference is real: a power is something he may do for the family, a privilege is an indulgence the law allows him personally.
He is not bound to save or to invest. He may manage the property as he thinks best and is not liable for failing to make it more profitable.
He is not bound to account for past dealings, and may be called on to account only when a partition is demanded, and then only for what is existing at that date, not for what he spent.
He may spend at his discretion for family purposes, within reason, and the other coparceners cannot question the amount unless it is grossly excessive.
He may not be sued for an account by a coparcener except in a suit for partition.
Fraud, misappropriation or conversion take the privileges away. Where a coparcener proves that the karta has misappropriated or converted family property to his own use, the karta must account, and the court will call for accounts even without a partition.
Obligations
To maintain the members of the family, out of the joint family property. That duty runs to every member, coparcener or not, and so covers the wives, the widows and the unmarried daughters.
To pay the family's debts out of the joint funds.
To meet the marriage expenses of the unmarried daughters and other members, out of the joint family property, which is a real charge on the estate and not a matter of grace.
To perform the necessary religious ceremonies and shraddha for the family.
To account on partition, as described above.
To act bona fide and in the interest of the family. This is the general obligation that all the others express. His powers are wide precisely because he is bound to use them for the family.
The Karta: Position, Powers, Privileges and Obligations
Not to alienate without justification, for which see the next chapter.
Writing the answer
MU sets this as an essay, and the four printed words give the structure:
Position. Senior-most coparcener; holds by right; sui generis, not partner, agent or trustee; a junior may act by agreement; a minor cannot; and a daughter now may, because the office follows coparcenary status.
Powers. Management, representation, contracting debts, alienation for necessity or benefit or religious duty, acknowledgment, arbitration, family arrangement, discharge.
Privileges. No duty to save or invest, no duty to account for past dealings except on partition, discretion in expenditure, immunity from a suit for accounts, all lost on proof of fraud.
Obligations. Maintenance, debts, marriage expenses, religious ceremonies, accounting on partition, bona fide management, and no unjustified alienation.
A worked example
A Mitakshara family consists of the widow W, her sons B (aged 40) and C (aged 35), and her daughter D (aged 45). B has been abroad for ten years and has given up management. C runs the family shop, borrows for it, and has spent a large sum on D's wedding and on a family shraddha. B returns and demands accounts of the last ten years, and challenges a sale C made of family land to pay a merchant's pressing demand.
Who is karta? The senior-most coparcener is karta by right. D is the eldest and, since 2005, a coparcener, so she may be karta; Manu Gupta declared the eldest daughter Karta on exactly that footing. If she does not act, B as the senior male coparcener would be, and C acts as karta by consent or by B's abandonment of the office.
Can W be karta? Not as of right. Seth Govindram held that a widow could not be manager because she is not a coparcener, and that rule is unchanged; what changed is that a daughter is one.
Was the borrowing lawful? The karta may contract debts for family purposes, and the debt binds the family.
The wedding and the shraddha? Both are within his obligations: marriages of members and ceremonies are family purposes.
Can B call for accounts of the past ten years? No. Among the karta's privileges is the absence of any duty to account for the past or to justify his spending; he accounts on partition, and then only for what is then in hand. That privilege goes on proof of fraud, misappropriation or conversion.
The sale. A karta may alienate coparcenary property only for legal necessity, benefit of the estate or religious duty, and this was to meet a pressing demand, which is legal necessity. Alienation is taken in [Alienation of Property: Separate and Coparcenary].
The Karta: Position, Powers, Privileges and Obligations
What is the karta's position in law? Sui generis: he is not a partner, not an agent and not a trustee, though he owes good faith.
What it does NOT mean
The karta is not an agent. He does not act on anybody's instructions, and his powers do not come from a grant.
He is not a trustee either. He is not bound to invest, nor to account for the past, though he must act in good faith.
Seniority is not a duty. The senior-most coparcener may give up the office, and a junior may then act with the consent of the others.
The privilege against accounting is not absolute. It goes on proof of fraud, misappropriation or conversion.
"For family purposes" is not "for any purpose he thinks fit". The purpose must be one the family's needs support.
Manu Gupta did not overrule Seth Govindram. It applied the same rule, that only a coparcener may be manager, to a daughter who has been a coparcener since 2005.
Quick revision
- Position: the senior-most coparcener is karta by right; his position is sui generis, not a partner, agent or trustee.
- Powers: to manage the family and its property; to represent the family, so that a decree against him binds it; to contract debts for family purposes; to enter into contracts and compromises; to acknowledge debts; to refer to arbitration; and to alienate only for legal necessity, benefit of the estate or religious duty.
- Privileges: no duty to invest, none to account for the past, none to justify his spending, and no obligation of equal division while joint. All go on proof of fraud, misappropriation or conversion.
- Obligations: to maintain the members; to pay debts of the family; to defray marriage expenses and ceremonies; to account on partition; and to act in good faith throughout.
- Cases: Commissioner of Income-tax v. Seth Govindram Sugar Mills Ltd held that a widow could not be manager, because she was not a coparcener; Manu Gupta v. Sujata Sharma declared the eldest daughter Karta, since a daughter has been a coparcener since 2005.
Test yourself
1. Who may be the karta of a joint Hindu family? The senior-most coparcener, as of right. He may give up the office, and a junior coparcener may then act with the consent of the others. Only a coparcener may hold the office, which is why a widow may not, and why a daughter may since 2005.
2. State the powers of a karta. To manage the family and its affairs; to represent the family in dealings and in litigation, so that a decree against him binds the members; to contract debts for family purposes; to enter into contracts, compromises and references to arbitration; to acknowledge debts; and to alienate coparcenary property, but only for legal necessity, for the benefit of the estate, or for the performance of indispensable religious duties.
The Karta: Position, Powers, Privileges and Obligations
3. What are the karta's privileges? He is not bound to invest the family funds, nor to account for his past dealings, nor to explain how he has spent the income; he accounts only on partition, and then for what is in hand. Each privilege ceases on proof of fraud, misappropriation or conversion.
4. What are his obligations? To maintain the members of the family, to pay the family's debts, to meet the expenses of the marriages and ceremonies of the members, to render accounts on partition, and to act in good faith and for the benefit of the family throughout.
The rest of this subject
These notes are cut from the University's printed syllabus. Open the syllabus itself, or the past papers, for the same subject.