Karta's Liability for HUF Debts Is Personal and Unlimited: Bombay High Court

“Even in the absence of a personal decree, a Karta is personally and unlimitedly liable for unsatisfied debts of the HUF”, On 8th January 2026, the Bombay High Court (Commercial Division) in Manjeet Singh T. Anand v. Nishant Enterprises HUF through its Karta & Anr., delivered a landmark decision on the jurisdiction of the arbitral seat court in execution proceedings, and the personal liability of a Karta in enforcement of an arbitral award passed against a Hindu Undivided Family (HUF).

Justice R.I. Chagla, while allowing the Interim Application No. 5306 of 2025, dismissed both preliminary objections raised by the Judgment Debtors — the first challenging the territorial jurisdiction of the Bombay High Court to execute the award, and the second objecting to the enforcement of the award against the personal assets of the Karta, Respondent No.2, despite the award not having specifically directed payment against him personally.

The Court rejected both contentions, holding that (i) the seat court retains execution jurisdiction under Section 2(1)(e) of the Arbitration and Conciliation Act, 1996, and (ii) under Hindu law, the Karta is personally and unlimitedly liable for unsatisfied debts of the HUF, and a separate decree is not required against him.

Seat Court Retains Execution Jurisdiction Irrespective of Where Assets Are Situated

The core legal issue in the case involved the jurisdiction of the executing court. The respondents contended that since none of the disclosed assets were located within Mumbai, and the arbitral award was merely enforceable as a “deemed decree” under Section 36 of the Arbitration Act, the execution could only be filed before a court within whose jurisdiction the assets or judgment debtor resided, as per Sections 38 and 39 of the Civil Procedure Code (CPC), 1908.

Rejecting this, the High Court observed: "The Respondents’ argument is on the misconceived premise that the Supreme Court’s observation in Sundaram Finance that there is ‘no requirement’ of first filing in the Seat Court, means that the Award Creditor can no longer file for execution in the Seat Court at all. This is completely contrary to the express language of Sundaram Finance and the Full Bench in Gemini Bay.” [Para 64]

Relying heavily on the Full Bench ruling in Gemini Bay Transcription Pvt. Ltd. v. Integrated Sales Service Ltd., the Court reaffirmed that:

“An Award made under Part 1 of the Arbitration and Conciliation Act, 1996 can be executed not only by the Court as defined by Section 2(1)(e)(i) but also by the Court to which it is sent for execution under Sections 38 and 39 of the CPC.” [Para 63]

Accordingly, the Award Creditor is vested with a choice to either approach the Seat Court or file directly where the assets are located. This interpretation, the Court noted, has been followed in Global Asia Venture Company v. Arup Parimal Deb and reaffirmed by Delhi High Court in Gujarat JHM Hotels Ltd. v. Rajasthali Resorts & Studios Ltd.. It also observed that the judgment in Sara Chemicals & Consultants v. Ogene Systems (I) Pvt. Ltd., cited by the Respondents, was distinguishable, as it had not noticed or applied the binding Full Bench ruling in Gemini Bay.

Karta’s Personal Liability for HUF Debts Does Not Require a Separate Decree

Turning to the second issue — whether the Karta’s personal assets could be attached in execution when the arbitral award was only against the HUF — the Court made emphatic observations reaffirming the personal and unlimited liability of a Karta under Hindu Law.

Justice Chagla held:

“It is settled law that the Karta’s liability for unsatisfied debts or dues of the HUF is personal and unlimited. The contention that the Karta has no liability save for the costs component is ex-facie without merit.” [Para 72]

The Court rejected the Respondent Karta’s argument that in the absence of a specific decree against him, his personal assets could not be proceeded against. It ruled that such an argument misconceives the unique status of a Karta, whose liability arises not by contractual obligation, but as a consequence of status under Hindu law.

Citing multiple authorities including Mulgund Co-operative Credit Society v. Shidlingappa Ishwarappa Mavi, Shiv Bhagwan Moti Ram Saraogi v. Omkarmal Ishar Dass, and the Full Bench of the Punjab and Haryana High Court in Khairati Ram & Anr., the Court reaffirmed:

“The Karta is personally liable for unsatisfied debts of the HUF by virtue of his sui generis status, and that an HUF is a juristic person only in certain contexts and in a limited sense, such as for taxation.” [Para 83]

The Court also dismissed the Karta’s plea of res judicata, noting that: “The issue of whether the Karta’s assets can be reached in execution by virtue of operation of Hindu Law was never and could never even arise for consideration before the Arbitral Tribunal.” [Para 74]

Further:

“The present proceedings are execution proceedings unconcerned with affixing of any contractual liability. The issue is unique to the post-award execution stage.” [Para 86]

Thus, even though the arbitral tribunal had not awarded the principal decretal sum against the Karta in his personal capacity, the absence of a personal decree was not fatal to the execution of the award against his personal assets.

Receiver Appointed; Disclosure Directed; Injunction Against Alienation Ordered

Having rejected both preliminary objections, the Court proceeded to allow the interim reliefs sought by the Award Creditor. Observing that immovable properties deposited as security during the arbitration were lying custodia legis, the Court directed:

“The Court Receiver is appointed with all powers under Order XL Rule 1 of the CPC including the power to take physical possession of the said immovable properties and to sell the said properties on such terms as this Court may deem fit.” [Para 91]

Further, the Court granted injunctions restraining alienation of assets and directed fresh disclosure of assets and bank statements by both Respondents:

“Respondents are directed to file Affidavits of Disclosure of all movable and immovable assets, income tax returns for the last three years and bank statements for the last one year.” [Paras 92–95]

The Court refused to stay the operation of its order, noting that the Award was passed as far back as 30th November 2023, and had not been stayed except for the costs component, which had already been deposited.

The judgment significantly strengthens the rights of award creditors to enforce arbitral awards against Karta’s personal assets, by affirming the settled principle that a Karta's liability for debts of the HUF is personal and unlimited, regardless of whether the award or decree is passed specifically against him. It also settles the controversy regarding execution jurisdiction of the Seat Court, recognizing it as having concurrent jurisdiction alongside courts where the assets are located.

By reiterating that the Arbitral Seat Court can not only entertain execution applications but also grant interim reliefs such as disclosure and injunctions, the judgment provides significant clarity and support to award creditors seeking expeditious and effective enforcement.

Date of Decision: 08 January 2026