(1) Power over income and expenditure;
(2) Power to manage joint family business;
(3) Power to contract debt for family purposes;
(4) Power to enter into contracts;
(5) Power to refer to arbitration;
(6) Power to enter into compromise;
(7) Power to give discharge;
(8) Power to acknowledge debts;
(9) Power to represent in suits;
(10) Power of alienation of joint family property.
(1) Power over income and expenditure:
The Karta exercises extensive control over the income and expenditure of the joint family. Since his position is not like the trustee or agent, he is not bound to economise or save like a trustee or agent provided he spends the income of the family for the benefit of the members of the family, e.g., for maintenance, education, marriage, sraddha and other religious ceremonies of the coparceners and of the members of their respective families.
(2) Power to manage joint family business:
The Karta has the power to manage the joint family business. In this respect he can take all such steps which are just and necessary for the promotion of the business.
(3) Power to contract debt for family purposes:
The Karta can enter into contracts incurring debts for family purposes and family business which will bind the other coparceners to the extent only of their interest in the joint family property. Such debt contracts could bind the adult coparceners personally also if they were parties to the contract expressly or impliedly or they subsequently ratify the contract and in case of minors if they ratify on attaining majority.
In case of a loan advanced to the manager, if the lender makes due inquiry into the necessity for the loan and lends the money born fide, the debt is binding on the interests of all the members although the reasonably credited necessity did not in fact exist.
(4) Power to Enter Into Contract:
The Karta has the power of making contracts, giving receipts, entering into compromises, discharging contracts ordinarily incidental to the business of the family.
(5) Power to Refer to Arbitration:
The Karta may refer to arbitration any matter involving the interest of joint Hindu family and the other members of the family including minors are bound by the reference and consequently by the award made upon it.
(6) Power to Enter Into Compromise:
The Karta can enter into a compromise in any matter relating to joint family property. He, however, has no power to give up a debt due to joint family and give up a valuable item without any return or consideration, though he has a right to settle accounts with the debtors and to make a reasonable reduction either towards interest or towards principal in the interest of the family.
(7) Power to Give Discharge:
The Karta has power to give a valid discharge to the debt due to joint family. Where one of the members of joint family is a minor, he cannot claim the benefit of Section 7 of the Limitation Act.
(8) Power to Acknowledge Debts:
The Karta has power to acknowledge a debt or make a part payment of it, so as to extend the period of limitation. But he cannot execute a fresh promissory note or a bond so as to revive a time barred debt.
(9) Power to Represent in Suits:
The Karta may represent the joint family in the event of a suit by or against the family, so that other members are not the necessary parties to the same. The Karta himself be sued or he can institute a suit with respect to any property or other matters of the joint family. Whenever a decree is passed against him, that would bind all other members of the family, if, as regards minor members, he acted in the litigation in their interest, and in case of major members, he acted with their consent.
The Karta represents the interests of the joint family property also. In Fathiunnisa Begum v. Tamirasa Raja Gopala Charyulu, the Court observed that a Hindu widow inheriting her husband’s share under Hindu Women’s Right to Property Act, 1937, does not by itself disrupt the joint family status.
After such inheritance she continues to be a member of the joint family and the Karta of joint family can represent her in all suits. The enlargement of her limited estate into full estate by virtue of Section 14 of the Hindu Succession Act does not bring about a change in the Karta’s power to represent joint family including her.
(10) Power of Alienation:
The Karta can alienate for value the joint family property so as to bind the interests of the other coparceners provided it is made:
(a) With the consent of all the existing coparceners; they being all adults;
(b) For legal necessity; or
(c) For the benefit to the estate.
Thus where the Karta alienates the joint family property for legal necessity or for the benefit to the estate, the consent of the other coparceners to this effect is not necessary. He, in such cases can proceed to alienate the joint family properly even without the consent of other coparceners.
He does not enjoy the absolute power to alienate joint family property. Some strict restrictions have been provided over his powers in this respect. The expression “for pious purposes” has been so often used in different contexts in Hindu law. The powers of Karta cannot extend in this context.
In G. Shiva Kumari v. Indian Overseas Bank, the Andhra Pradesh High Court held that the Karta of joint family can burden the estate by mortgaging the property for the benefit of the estate. However, in doing so, he must act as a prudent owner with the knowledge available to him at the time of transaction. A transaction by the manager which is neither risky nor speculative but calculated to confer a positive advantage on the family, can be said to benefit the estate.
The law also sanctions gifts to strangers by a manager of a joint family of small extent for pious purposes. But a gift to a stranger, however, much the donor was beholden to him, cannot be sustained on the ground that it was made out of charity. The scope of the power cannot be extended on the basis of wide interpretation given to the words “pious purposes” in the Hindu law in a different context.
The father as a Karta of joint family can dispose of or mortgage the joint family property which includes the shares of his sons. Such sale or mortgage can be effected by him for the payment of debts which he had incurred for his personal gains. The alienations in such cases would be binding on his sons provided the debt was incurred prior to alienation and it was not for any immoral purposes.
In Pavitri Devi v. Darbari Singh, the Court held that the Karta has got absolute power to alienate his undivided interest in the joint family. The transferee in such cases acquires the right to get that part of the property partitioned and to claim possession over it to the same extent and in the same manner as it was available to the Karta.
In Radha Krishna Das v. Kaluram, the Supreme Court held that “where an alienation by way of sale of the family property made by a Hindu father is challenged by his sons on the ground of want of legal necessity then it is now well settled that what the alienee is required to establish is legal necessity for the transaction and that it is not necessary for him to show that every bit of the consideration which he advanced was actually applied for meeting family necessity. The reason is that the alienee can rarely have the means of controlling and directing the actual application of the money paid or advanced by him unless he enter into the management himself.”
Legal necessity does not mean actual compulsion; it means pressure upon the estate which in law may be regarded as serious and sufficient. The onus of proving legal necessity may be discharged by the alienee by proof of actual necessity or by proof that he made proper and bona fide enquiries about the existence of the necessity and that he did all that was reasonable to satisfy himself as to the existence of the necessity.
Where the father in the capacity of Karta alienates the property on the ground of legal necessity, the burden of its proof is on the alienee. Where legal necessity is not proved, the alienation would be binding on the share of the father in joint family property. Similarly where the father gave away the ancestral property in gift to his daughter, the Madras High Court held that the gift was void not voidable. Where a coparcener surrenders his share in the coparcenary property in favour of his wife, it was held to be invalid.
In Sunil Kumar v. Ram Prasad, the Supreme Court held that where the father as a Karta proceeded to sell away joint family property on account of legal necessity, no coparcener could restrain him through a suit of injunction from doing it. If the coparcener considers the sale to be bad, he could challenge its validity after the sale is effected.
Where the sale considerations were spent by Karta who was agriculturist, on purchase of agricultural implements and also on marriage of granddaughter it was held that the sale was for legal necessity therefore the court refused to set aside the sale merely on the ground that consideration was meagre. Similarly in Sunder Das and others v. Gajananrao & others, ancestral property was alienated by the Karta on ground of legal necessity.
It was mentioned in sale-deed as to sale being for legal and family necessity. Father was serving as upper division clerk in court. He was not shown to have been addicted to immoral conduct. Sale was thus treated to have been taken for family necessity. Thus father was held competent to have disposed of share of minor sons. Hence the minor sons were bound by the sale made by the father for family necessity.
In Naresh and others v. Babulal and others, the High Court held that Karta of the family cannot be restrained from alienating joint family property.