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THE KARTA OF A JOINT HINDU FAMILY: AN ANALYSIS FROM THE LENS OF MODERNITY
Author: Vishrut Parakulangara, II year of B.A.,LL.B.(Hons.) from Hidayatullah National Law University, Raipur, Chhattisgarh
An Overview on the Concept of the Karta
The Joint Hindu Family (‘JHF’) is a concept which is very unique in nature. This uniqueness stems from the fact that it consists of several members and each one of them have varying roles, functions and duties allotted to them. Moreover, a JHF, in certain situation is also engaged in trades in the form of partnerships, sole proprietorships or in the traditional form of business, that is the Hindu Undivided Form. Therefore, in such an institution where intricacies run deep in every small segment of the JHF and with varying degree powers and rights of the members, it becomes imperative that the Joint Hindu Family be headed by a single dominant figure, who not only manages the day-to-day affairs of the institution but is also responsible for the well- being and the prosperity of the family as a whole. Such a dominant figure, in context of the Joint Hindu Family is known as the “Karta”.
The Karta maybe defined as “Manager - Property belonging to a joint family is ordinarily managed by the father or other senior member for the time being of the family: The Manager of a joint family is called Karta”[i].The essence of the definition is that the Karta manages the ordinary affairs of the Joint Hindu Family, and is usually the father or the eldest member of the family. However, two important lacunae arise from this definition of Karta.
The first one is that the term ‘Manager’ as used to describe by the Karta is not completely appropriate. The second issue is that the definition does not leave any scope of a female co-parcener being the Karta of the family. These two lacunae would be discussed in-depth along with various other facets of a Karta in the coming sections.
Karta: A Patriarchal Concept?
From the olden times, due to the Indian society being deeply patriarchal, it was believed that only the father or in the absence of the father, the senior most male members of the household could become the Karta of the Joint Hindu Family. The essence behind this practise was that women were considered to be inferior to men and the role of Karta, which required not only the acumen in the field of family disputes but also in the field of finance, such a complex role could only be fulfilled by a man. However, as time passed and women started getting uplifted, the question of as to why a female member cannot become the Karta of the family arose.
The courts took diverging stances while trying to answer this question and there was an ambiguity regarding the status of women as Karta. The biggest stumbling block which prevented women from acting as the Karta was, that women members of the family had no right to become co-parceners. The major change in the law came in the year 2005, when the Hindu Succession (Amendment Act) of 2005, gave co-parcenery rights to even the daughters of the family.as well as granted them the right of survivorship.[ii]Thelandmarkcase of Sujata Sharma v Manu Gupta[iii]later cemented the rights of women members to become the Karta of the Joint Hindu Family.
In the case, a Karta of a Joint Hindu Family was the eldest among five brothers and a sister (the plaintiff). On the death of the Karta, as well as the five brothers, the defendant, who was the son of one of the brothers claimed that being the eldest male member of the family, he should become the Karta of the family. However, the Plaintiff opposed this view and claimed her right to be termed as the Karta, as the sole surviving daughter of the Karta.
The Delhi High Court while giving its judgement sided with the contentions made by the Plaintiff and held that the only stumbling block which blocked the women member of the Joint Hindu Family to become Kartas, was the fact that female members were not considered to be Co- Parceners. However, after the 2005 Amendment to the Hindu Succession Act, this stumbling block has been abolished. The implication of which is that now even female members have the equal right to become the Kartas of the family and seniority becomes the only ground for determining the role of Karta.
The Misnomer Regarding Karta
The role of Karta is often equated to the role of a manager of any business concern and that is why the Karta is also called as the ‘Manager of the Joint Hindu Family’. However, in reality this becomes a misnomer, as while at first glance the role of Karta and a Manager may seem the same, in actuality both the roles are of different nature.
The role of Karta is fiduciary in nature and the Karta selflessly devotes his efforts and time for the prosperity of his Joint Hindu Family. On the other hand, a manager of a business concern does not share a fiduciary concern with the other members of the business and is merely a professional or an employee who is hired for the skill they possess. Moreover, a manager would always be entitled for a salary or a fee or sometimes even a share in the profits of the concern they are associated with. However, the Karta being the representative of the Joint Hindu Family does not get any right to draw any salary and any income earned by him becomes the part of the asset of the family. Thus, this becomes another reason as to why it is inappropriate to compare a Karta with a Manager.
However, the Karta may be entitled to a salary for the effort put in by them, if there is a contract to the same. The landmark case of Jugal Kishore Baldeo Sahai v CIT[iv]lays down that the old hindu scriptures prescribe no bar on the Karta drawing salary for conducting the family business, if there is a contract for the same with the other family members. Moreover, the salary would not be held as an expenditure deductible under the Income Tax Act. [v]
The Powers of the Karta
Being the head of the Joint Hindu Family, who takes care of the day-to-day affairs of the Joint Hindu Family, the Karta is vested with powers and responsibility of a very high degree. A few of these rights have been discussed in brief below:
Right of Representation
The Karta being the sole representative of the family, has the right to represent the family in all social, religious, revenue as well as legal matters, including the litigation. If a suit is filed against the family, then it would be Karta ‘s name which would be mentioned, due to his representational powers.
Power to Settle Family Disputes
The Karta is bound by his position to settle family disputes, if taken within the family members or between family and outsiders, by entering into a compromise between the two fighting parties or may even refer the dispute for arbitration.[vi]
Right to Manage the Family Affairs
The Karta also has the right to manage the family affairs and is the sole authority of the family. Any decision which may be of a significant effect on the family, has to be ratified by the Karta themselves. Moreover, if a co-parcener wishes for the partition of his property, then the Karta’s consent becomes essential. Moreover, the Karta also has the power to oust any co-parcener who is detrimental to the prosperity of the Joint Family, any time, out of his discretion.
Right of Gifting Properties
The Karta has the sole rights to gift the Joint Family Property as well as self- property to the descendants. Before 1964, the Karta only had the right to gift movable property. However, in the case of Guramma v Mullappa[vii], it was held that the Karta also has the right to gift a small portion of the immovable property to their relatives with ‘pious intentions’, such as marriage of a daughter.
Karta in the Modern Times: An Absolutist?
The previous section expounded upon the powers and duties of a Karta in a Joint Hindu Family. The fact that, when looked at it from the perspective of a modernist, it seems that the Karta more than being the “Manager” of the family, actually becomes the “Monarch” of the Family. This thought process is not wrong by any stretch of the word, simply because the position of Karta is indeed given unlimited powers to make decision not only on the day-to-day affairs of the family, but also possesses the final say in almost every decision of the family. This system however, points towards a very un-democratic system with the powers vested within just a single entity with no system of checks and balances.
In the old times, one of the reasoning behind appointing just one Karta, may have been that wisdom was equivalent to seniority and a single Karta would have been best suited in scenarios where other co-parcenery and members may not have had the adequate skills to manage the complex daily affairs of the family or the family business in general. However, in the modern era, where the Joint Family systems have become more complex and have become more scattered, the existence of a single Karta is impractical and unfeasible. This could be exemplified by the fact that if the family business has two branches in two different cities across the country. Then, it becomes unfeasible for a single Karta to manage both these branches efficiently and in a proper way.
Further, due to the changing competitive environment among businesses, other form of business like the Joint Stock Company or the Partnership have been preferred over Hindu Undivided Family, which may soon lead to the extinction of family run businesses[viii]. The underlying reason behind this changing trend is that having just a single person responsible for managing each and every affair of a business seems unfeasible in this day and age. Firstly, the Karta may not have the all-round skills to become an efficient manager, as it is not possible for a single person to possess all the tricks of trade. On the other, a business concern in the form of say, a company or the partnership, may have multiple directors, managers and partners, thus making it easy for each of them to achieve specialisation and yield benefit of division of labour, which is one of the Principles of Management propounded by Henri Fayol. Secondly, when talking from the perspective of business, is also criticised because the Karta of a HINDU UNDIVIDED FAMILIES has an unlimited liability. That is, the Karta would not be just pay off the liability from the share they hold in the business but also from their personal assets.
Thus, it becomes clear that in the current times, the provision of providing Karta with almost all the decision-making powers of not just the day-to-day affairs, but also in the family business, may be seen to be synonymous to absolutism, where the other family member is at the whims and fancies of the Karta. Moreover, even the business aspect of a Joint Hindu Family, that is a HINDU UNDIVIDED FAMILIES , seems to lag behind in the modern times vis-à-vis, other forms of business, due to lacunae associated with having a sole dominant Karta.
The Karta of a Joint Hindu Family is regarded as the head and the manager of the family, with absolute powers vested in the hands of the position. While, it is necessary that the Karta always acts for the betterment of the Joint Hindu Family, due to the nature of the powers, the probability that the Karta misuses the authority for selfish gains becomes one of the major issues which plague the entire institution of JHF. Moreover, the role of Karta has been criticised in the modern times, as it promotes absolutism and in essence, is an inefficient post when looked at from the perspective of a family business. It is true that a few years back, the prospect of a female member being a Karta, let alone a co-parcener in the family, was seen as a pipedream. However, the 2005 Amendment in the Hindu Succession Act, 2005 and the case of Sujata Sharma[ix], emerged as watershed moments. Similarly, while the prospect of having more than one Karta, managing the daily affairs of the family, may seem like an outright and senseless proposition now, the situation might be different in the coming future, simply because, such a change would surely help in removing the current lacunae which plague the institution of JHF and help in bringing back the past glory of Hindu Undivided Family businesses.
[i] Alba Law Offices, Female as Karta of a Hindu Family, Legally India, ( August 26,2022,11:35 AM) https://www.legallyindia.com/views/entry/female-as-karta-of-a-hindu-undivided-family#ftn2. [ii]Id. at 1. [iii] (2016) 226 DLT 647. [iv](1967) 63 ITR 238,242 [v] II, Dr. Poonam Pradhan Saxena, Family Law Lectures: Family Law II 147 (LexisNexis 2011). [vi]Jagannath v. Mannu Lal, (1894) ILR 16 AII 116. [vii] AIR 1964 SC 510. [viii]Lubna Kably,HINDU UNDIVIDED FAMILIES no longer popular among high net worth Indians but winding up a challenge, Times of India, (August 26,2022,11:45 AM) http://timesofindia.indiatimes.com/articleshow/61557596.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst [ix]Supra Note 3.