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Discussion > Family Law > Can karta of HUF sell ancestral immovable property with out   Unanswered Threads Post New Topic

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raj kumar makkad


Advocate
[ Scorecard : 131934]
Posted On 12 December 2009 at 18:50 Report Abuse

Question:- A Karta of a HUF makes an agreement with another person to sell an ancestral immovable property for a consideration. His married sons refuse to execute the sale deed in the last minute saying that the sale consideration is nowhere near the market price, their interests are therefore very much affected and the Karta has misled them to sign the sale deed. In the above circumstances.

a) Can A as the Karta bind his coparceners with an agreement which he has made with a third party and compel the latter to sign the sale deed?

b) What are the rights of the disappointed buyer who was ready with the sale deed for execution together with the related consideration?

c) Can he sue the Karta for the breach of the agreement?

d) Can he also compel the coparceners to sign the sale deed based on the agreement the Karta has made with him?

e) In other words can he ask for specific performance?

f) What are his other rights like in the Specific Relief Act?”

Answer:- A Karta or Manager of a HUF has all the powers to manage the family and its assets, being head of the family. The joint family property vests in the family and its coparceners/members. On partition Karta gets his share. He is not absolute independent, individual owner of the property. Each coparcener/member has share, right, title and interest in the ancestral property.

The power of the Karta to make an alienation is confined according to the Mitakshara to three purposes : (1) in the time of distress (apatkale); (2) for the sake or benefit of the family (kutumbarthe); and (3) for pious purposes (dharmarthe). The meaning of the terms is explained by the Mitakshara : “Time of distress” refers to a distress which affects the whole family; ‘for the sake of the family’ means for its maintenance; and ‘pious purposes’ are described as indispensable acts of duty such as the obsequies of the ancestors”. The first of the above purposes would be a case of legal necessity. The second would cover both family necessity and benefit. It is fairly clear from the Mitaksharathat the term maintenance or support of the family (poshana) would include not only transactions which are absolutely necessary for its bare maintenance but also transactions positively beneficial to the family in the sense that they are clearly calculated to raise its economic level and standard of life.

It has long been, settled that the managing member of a joint Hindu family has power to alienate for value, joint family property either for family necessity or for the benefit of the estate so as to bind the interests of all the undivided members of the family whether they are adults or minors or widows. (Please refer Mahadu vs. Gajara Bai 1954 Bombay 442 (DB). The powers of the manager of a Hindu family were considered by the Privy Council in a case which is always referred to as settling the law on the subject. That was the case of a mother managing as guardian for an infant heir. Of course, a father, and head of the family, might have greater powers, but could not have less, and it has been repeatedly heldthat the principles laid down in that judgment apply equally to a father, or other coparcener who manages the joint family estate. Their Lordships said (p. 423) : (1) “The power of the manager for an infant heir to charge an estate not his own, is under the Hindu law, a limited and qualified power. It can only be exercised rightly in case of need, or for the benefit of the estate”. Pundarikakshayya vs. Sreeramulu ILR (1946) Mad. 242 FB; Balamukund vs. Kamala Wati AIR 1964 SC 1385; (1965) (1) SCJ 212 : (1964) (6) SCR 321; Surendranath vs. Sudhir Kumar 1982 Ori 30; Manohari Devi vs. Chaudry Sibanavadas 1983 Ori 279.

The purchaser is bound to enquire into the necessities for the family to sell, and to satisfy himself, as well as he can, with reference to the parties with whom he is dealing,that the manager is acting in the particular instance for the benefit of the estate : Ramanathan Chettiar vs. Viswanathan AIR 1941 PC 43.

The rule as to bona fide inquiry laid down in Hanoomanpersaud’s case has been embodied in section 38 of the Transfer of Property Act. That section since the Amending Act 20 of 1929 has become applicable to Hindus. It runs thus : “Where any person, authorized only undercircumstances in their nature variable to dispose of immovable property, transfer such property for consideration, alleging the existence of such circumstances , they shall, as between the transferee on the one part and the transferor and other person (if any) affected by the transfer on the other part, be deemed to have existed, if the transferee, after using reasonable care to ascertain the existence of suchcircumstances, has acted in good faith”.

Necessity is not to be understood in the sense of what is absolutely indispensable but what according to the notions of a Hindu family would be regarded as reasonable and proper. “On the whole it would seen that a managing member has authority to do all acts which are clearly reasonable and proper for the realization, protection or benefit of the joint estate and for the protection and support of all the members of the joint family as well as what is required for indispensable acts of duty. The difficulty is not so much one of principle, as of its application to the varying nature ofcircumstances as they present themselves to different minds. It is perfectly clear that the preservation of the estate from extinction, the defence against hostile litigation affecting it, the protection of it or portions from injury or deterioration by inundation are circumtances which would justify an alienation, whether they are regarded from the point of view of legal necessity or benefit to the estate.”

In the instant case the sons claim that sale is below fair market value and hence refuse to sign the Sale Deed. As it affects their rights, they can claim so. Even a minor, on attaining majority can challenge.

(a) No, the sons cannot be compelled to sign the Sale Deed, which is adverse to their interest.

(b) It was the duty of the buyer to bonafidely enquire the authority of the Karta. At the time of agreement, such agreement should have been entered into with the major sons and coparceners too, to bind them.

(c) Can sue the Karta for damages and compensation payable in his individual capacity.

(d) No.

(e) He can ask for sale of share of the Karta and not whole of the property.

(f) As (c) and (e) above.

Read more: http://www.taxguru.in/general-info/can-karta-of-huf-sell-ancestral-immovable-property-with-out-the-consent-of-other-members-right-and-relief-to-buyer.html#ixzz0ZTq0olRZ



Total thanks : 1 times


Online certification courses IP, IT and Investment Law


Member (Account Deleted)


[ Scorecard : 2749]
Posted On 12 December 2009 at 20:24 Report Abuse

Makkad ji, Thank you very much for providing information regarding Karta of HUF ancestral immovable property.



V.V.RAMDAS


Advocate
[ Scorecard : 1019]
Posted On 12 December 2009 at 22:55 Report Abuse

Dear Makkd Ji,

You  put question and would have left for others to answer, than there would have some other test but  without waiting, answered immedeatly.Howevre very very interesting topic and nice answer. Thanks a lot for your inforamation.



Kamal Grover


Advocate High Court, Chandigarh M:09814110005 email:adv.kamal.grover@gmail.com
[ Scorecard : 2118]
Posted On 13 December 2009 at 00:43 Report Abuse

 

 

NICE

THANKS



Suraj


student
[ Scorecard : 40]
Posted On 14 December 2009 at 15:39 Report Abuse

Sir - I'm unable to find the text of the case "Ramanathan Chettiar vs. Viswanathan AIR 1941 PC 43". Please share. Also please share such similar judgements of recent past if you have.

A very interesting and comprehensive case study!!



Raghav Sood


Lawyer
[ Scorecard : 512]
Posted On 20 December 2009 at 17:48 Report Abuse

i am enlightened



Rani mangal


Secretary
[ Scorecard : 44]
Posted On 08 March 2010 at 14:04 Report Abuse

Dear Rajkumarji

I really appreciate your case study on HUF. Thanks for the same.

I want to know about a HUF if a person dies leaving behind his wife, a minor son and major unmarried daughter.

Who will be the next karta?

Whether unmarried major daughter is also a member of HUF?

Whether after marriage of major daughter she crases to be member of HUF?

What if the major daughter is of unsound mind and doesnot get married for life time.

What will happen if the monor son becomes major? whether he will be karta or his mother will be the karta?

W



ad. creaminall


professional Advocate
[ Scorecard : 2869]
Posted On 08 March 2010 at 15:11 Report Abuse

thanks for sharing knowledge.



Dhayalan 9894551170


advocate
[ Scorecard : 79]
Posted On 01 December 2010 at 10:02 Report Abuse

thanks for sharing



ADVOCATE DEFENSE.


POWER OF DEFENSE IS IMMENSE - firmaction@gmail.com
[ Scorecard : 15944]
Posted On 01 December 2010 at 14:11 Report Abuse

Irrespective of citations of Privy council refered by the leaned contributor , I deffer since it is not tested law now because circumstances are defference and hence not applicable.

HUF is mostly used for IT purposes.

For all  other purposes the name of karta is  on property records AS HIS PRSONAL NAME  not necessary as karta HUF . Only for IT records he shows it as belongING  to  HUF since there in no law which mandates that HUF property should be in in the name  affixed as karta or name HUF should be added.

So when liigations comes to court which is now not in small nos but  by MILLIONS yes MILLIONS of cases where these points are agitated and always defferent verdicts.

IN SHORT KARTA HAS ABSOLUTE RIGHT TO DEAL WITH THE PROPERTY AND PROBLEM MAY COME AFTER TRANSECTION IS DONE AND NOT EARLIER.

Those who defere please give any recent case of any court in India.




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