1. Mortgage of Hindu Undivided Family property by the Karta acting as a guarantor. (Para 1 )
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2023 Supreme(SC) 1781
SUPREME COURT OF INDIA
SANJIV KHANNA, S.V.N. BHATTI, JJ.
N.S. Balaji – Petitioner
Versus
The Presiding Officer Debt Recovery Tribunal and Others – Respondents
Petition for Special Leave to Appeal (C) No. 21476-21477 of 2023
Decided On : 03-10-2023
Advocates:
Advocate Appeared:
For the Petitioners: Ramakrishnan Viraghavan, K. Krishna Kumar
Advocate Appeared:
For the Petitioners: Ramakrishnan Viraghavan, K. Krishna Kumar
The Karta of a Hindu Undivided Family has the right to mortgage family property without requiring consent from other members, valid unless challenged on legal necessity or betterment grounds.
Headnote:(A) Hindu Succession Act, 1956 - Karta of Hindu Undivided Family (HUF) Property - Rights pertaining to the Karta - The Karta has the authority to mortgage HUF property even if a minor has undivided interest, as established in Sri Narayan Bal vs. Sridhar Sutar - The mortgage executed by the Karta does not require consent from other HUF members unless it is challenged on grounds of legal necessity or betterment of the estate. (Paras 2-3)
(B) Special Leave Petitions - The court declines to interfere with the lower court's judgment when the Karta's right and actions regarding HUF property are established. (Para 4)
Facts of the case:
The petitioner claims that the property in question was a joint family property mortgaged by his father, the Karta of the HUF, as a guarantor.
Findings of Court:
The court confirmed that the father had the right to mortgage HUF property without the need for consent from other family members.
Issues: The main issues addressed were the rights of the Karta over HUF property and the nature of the consent required from other coparceners.
Ratio Decidendi: The court reaffirmed the established legal principle that the Karta has the authority to act on behalf of the HUF, allowing for mortgage transactions without other members' consent, unless the act is challenged on specific grounds.
Result: Special leave petitions dismissed.
Legal Category Hierarchy
Table of Contents
2. Validity of HUF property mortgage by the Karta without the consent of other coparceners. (Para 1 , 3 )
3. Karta is authorized to manage and alienate HUF property; consent of other members is not required unless alienation lacks legal necessity or estate betterment. (Para 2 , 3 )
4. A Karta possesses the legal authority to alienate HUF property, which remains valid unless proven to be without legal necessity or for the estate's betterment. (Para 2 , 3 )
5. Special leave petitions dismissed and pending applications disposed of. (Para 4 , 5 )
6. Does a Karta have the right to alienate HUF property without the consent of other members?
Yes, a Karta is entitled to sell, dispose of, or alienate HUF property, and the consent of sons or other members of the HUF is not required for such transactions. (Para 2 , 3 )
7. Under what conditions can a coparcener challenge the alienation of HUF property by a Karta?
A coparcener may challenge the Karta's alienation of HUF property if it is established that the act was not for legal necessity or for the betterment of the estate. (Para 3 )
8. Can HUF property be alienated by the Karta if a minor has an undivided interest?
Yes, the Karta has the right to alienate HUF property even if a minor of the family has an undivided interest, as the HUF acts through its Karta or an adult member. (Para 2 )
ORDER :
1. In the present case, the petitioner claims that the property in question was a joint family property/Hindu Undivided Family (HUF) property, which was mortgaged by the petitioner’s father as one of the guarantors. The petitioner also states that his father was the Karta of the HUF.
2. The position on the rights of a Karta vis-a-vis an HUF property is well settled. This Court in Sri Narayan Bal vs. Sridhar Sutar , (1996) 8 SCC 54 has held that the Karta has the right to sell/dispose of/alienate an HUF property, even if a minor of the family has undivided interest. The reason is that an HUF is capable of acting through its Karta or an adult member of the family in the management of the HUF property.
3. Thus, the father of the petitioner herein, as the Karta of the HUF, was entitled to mortgage the HUF property. The sons or other members of the HUF need not be consenting parties to the mortgage. Post alienation, a coparcener may challenge the act of a Karta, if the alienation is not for legal necessity or for betterment of the estate, which is not the assertion established in the present case.
4. In light of the aforesaid, we are not inclined to interfere with the impugned judgment and hence, the special leave petitions are dismissed.
5. Pending applications, if any, shall stand disposed of.
