The End of Male Exclusivity as HUF kartas

The 2005 amendment provided that a daughter has an equal right as that of a son in an HUF. One of the questions which has arisen as a result of this amendment is that can a daughter also be a karta of an HUF? While there has been a strong opinion in favour of this view, it is only now that this issue was tested before a judicial forum and the Delhi High Court has given its favourable view. Let us analyse this interesting question and some more questions emanating from the same.

Concept of an HUF
The Act governs the law relating to intestate succession among Hindus. The Act applies to Hindus, Jains, Sikhs, Buddhists and to any person who is not a Muslim, Christian, Parsi or a Jew.

Traditionally speaking, an HUF was a joint family belonging to a male ancestor, e.g., a grandfather, father, etc., and consisted of male coparceners and other members. Thus, the sons and grandsons of the person who was the first head of the HUF would automatically become coparceners by virtue of being born in that family. A unique feature of an HUF is that the share of a member is fluctuating and ambulatory which increases on the death of a member and reduces on the birth of a member. A coparcener is a person who acquires an interest in the joint family property by virtue of being born in the family. Earlier, only men could be coparceners. A wife and a mother of a person also could not become a coparcener in an HUF.

The Watershed Amendment which started the Revolution
Under section 6 of the Act, on the death of a Hindu, his interest in an HUF devolves by Will or by intestate succession and not by survivorship. This is contrary to the position prior to 2005 when the interest devolved by survivorship. Thus, under survivorship, if a father died, his interest in the HUF devolved upon the other surviving HUF members. Now the position is that his interest would go either as per his Will or in cases where he has not made a Will, then as per the intestate succession pattern laid down under the Act.

To neutralise gender biases existing prior to 2005, the Central Government amended the Hindu Succession Act, 1956 by the 2005 Amendment Act which was made operative from 9th September 2005. This marked a watershed in the Hindu Law History because covenants laid down by Manusmriti where done away with. The amendment not only altered the succession pattern, but also changed the way HUFs were hitherto managed.

Section 6 of the amended Hindu Succession Act, 1956 provides that a daughter of a coparcener shall:
a) by birth become a coparcener in her own right in the same manner as the son;
b) have the same rights in the coparcenary property as she would have had if she had been a son; and
c) be subject to the same liabilities in respect of the said coparcenary property as that of a son.

Thus, the amendment, by one stroke, put all daughters at par with sons and they could now become a coparcener in their father’s HUF by virtue of being born in that family. In Ram Belas Singh vs. Uttamraj Singh, AIR 2008 Patna 8, the High Court held that the daughter of a coparcener shall by birth become a coparcener in her own right in the same manner as the son and will have the same rights in the coparcenary property as she would have if she had been a son and shall also be subject to the same liabilities in respect of the said coparcenary property as that of a son and any reference to a Hindu Mitakshara coparcener shall be deemed to include a reference to a daughter of a coparcener. It held that the Act makes it very clear that the term “Hindu Mitakshara coparcener” used in the Act now includes daughter of a coparcener, also giving her the same rights and liabilities by birth as those of the son.

In Ganduri Koteshwaramma vs. Chakiri Yanadi, (2011) 9 SCC 788, the Court held that the effect of the amendment was that the daughter of a coparcener had the same rights and liabilities in the coparcenary property as she would have been a son and this position was unambiguous and unequivocal. Thus, on and from September 9, 2005, the daughter was entitled to a share in the ancestral property and was a coparcener as if she had been a son.

A daughter, thus, has all rights and obligations in respect of the coparcenary property, including testamentary disposition. Importantly, this position continues even after her marriage. Hence, all though she can only be a member in her husband’s HUF, she can continue to remain a coparcener in her father’s HUF.

Meaning of a Karta
A karta of an HUF is the manager of the joint family property. Normally, the father and in his absence the senior most member acts as the karta of the HUF. It is the karta who takes all decisions and actions on behalf of the family. He is vested with several powers for the operation and management of the HUF.

In the case of CIT vs. Seth Govindram Sugar Mills, 57 ITR 510 (SC), the Supreme Court held that the managership of a joint Hindu family is a creature of law and in certain circumstances, could be created by an agreement among the copartner of the joint family.

The Supreme Court in Tribhovandas Haribhai Tamboli vs. Gujarat Revenue Tribunal, 1991 SCR (2) 802 held that the managership of the Joint Family Property went to a person by birth and was regulated by seniority and the Karta or the Manager occupied a position superior to that of the other members. It further held that the father’s right to be the manager of the family was a survival of the patria potastas (Latin for power of the father) and he was in all cases, naturally, and in the case of minor sons, necessarily, the manager of the joint family property. In the absence of the father, or if he resigned, the management of the family property devolved upon the eldest male member of the family provided he is not wanting in the necessary capacity to manage it.

In Varada Bhaktavatsaludu vs. Damojipurapu Venkatanarasimha (1940) 1 MLJ 195, the Madras High Court held that when there was an eldest member of an HUF, the presumption was that under the Hindu Law he was the manager of the family.

Can a Female be a Karta – Position till 2005
Till 2005, the unanimous opinion was that only a male descendant of an HUF could become a karta. Let alone a karta, a female could not even become a coparcener. In CIT vs. Seth Govindram Sugar Mills, 57 ITR 510 (SC), the Supreme Court held that coparcenership is a necessary qualification for managership of a joint Hindu family. The Court further held that even the senior most female member of an HUF could not be a karta. She would be a guardian of her minor sons till they become major but never the karta because of the fact that she was not a coparcener. Similarly, various decisions have held that a wife cannot be a karta of her husband’s HUF.

Delhi High Court’s Decision
In Mrs. Sujata Sharma vs. Shri Manu Gupta, CS(OS) 2011/2006, Order dated 22nd December, 2015, the Delhi High Court was faced with the crucial decision of whether a lady who was the eldest child of all the coparceners of the HUF could be a karta or would the eldest son instead be the karta? It was contended by the son that the amendment to the Act only dealt with succession issues and did not expressly deal with the managership of an HUF.

However, the daughter countered this argument by relying on the Supreme Court’s observations in the case of Seth Govindram Sugar Mills (supra). According to the Supreme Court, being a coparcener was a necessary qualification for becoming a karta and since a female was not a coparcener she could not become a karta. She further contended that after the 2005 amendment, this impediment has been removed and a daughter is now statutorily recognised as a coparcener. Hence, reading the aforesaid Supreme Court judgment and the 2005 amendment together, she could become a karta. The 174th Report of the Law Commission of the India, dated 5th May 2000 was also relied upon which recommended that the eldest daughter can become a karta. The Delhi High Court found favour with the arguments raised on behalf of the daughter and held that it would indeed be odd if a daughter had equal rights of inheritance in an HUF property but could not become a karta of the same HUF. It further held that the Act was a socially beneficial legislation which gave equal rights of inheritance to both males and females. It held that the Act recognised the rights of females to be coparceners and provided for gender equality. In such a scenario, there was no reason why a daughter could not be a karta. It even added that this would be the case even after her marriage. Thus, the High Court declared the eldest daughter to be the karta of her father’s HUF.

Some More Questions
Is it not paradoxical that a married daughter can be a karta of the HUF of her father but not of the HUF of her husband? Is that not a classic case of there yet being a gender bias? There is a lady who is good enough to be a coparcener in her father’s HUF but not fit enough to be a coparcener of her own husband’s HUF? Indeed, this is an area which needs immediate rectification. Unfortunately, in this case, the remedy cannot be judicial since it would have to be through an amendment to the Act.

Further, since a daughter can now become a coparcener in her father’s HUF, do her children automatically become coparceners in their maternal grandfather’s HUF? The answer seems to be yes since the amendment Act clearly provides that the daughter would have the same rights as a coparcener as those of a son! Thus, if the daughter’s son or daughter is the eldest amongst the cousins, would he /she become the coparcener in their maternal grandfather’s HUF, in precedence to the son’s children? The answer, again, seems to be yes! So there could be a scenario where the daughter’s daughter is a karta of an HUF?

Inspite of the 2005 amendment, several HUFs have yet continued with the son as the karta even in cases where his sister is elder to him. What happens in such cases? Does the karta get automatically replaced or does the sister in all cases need to move Court? What happens to the transactions carried out by the son post September 2005 as karta of the HUF? Can the other members of the HUF /the sister challenge them for want of authority? These are some of the interesting questions which come to mind. One wishes that the amendment was more holistic and far sighted in nature.

Conclusion
With this judgment, another male bastion falls… and it’s about time. One wishes that the Legislature had expressly clarified this issue of managership when it carried out the 2005 amendment. Maybe it is time for an altogether new Hindu Succession Act, instead of carrying out another ad-hoc amendment to the present Act which is already celebrating its 60th anniversary. HUFs yet constitute entity for owning properties and businesses in India and hence, the Act urgently needs a Version 2.0. On a lighter vein, one wonders, whether, in case of a female manager, the term karta should now be joined by the term ‘Karti’?