Property Rights: Karta of the HUF Entitled to Mortgage the HUF Property: Supreme Court

In a recent landmark judgment, the Supreme Court of India reaffirmed the rights of the Karta in a Hindu Undivided Family (HUF) to mortgage HUF property. The ruling came in response to Special Leave to Appeal (C) No(s). 2147621477/2023, originating from a judgment by the High Court of Judicature at Madras at Madurai.

The Court's observation was crystal clear: "The father of the petitioner herein, as the Karta of the HUF, was entitled to mortgage the HUF property." This assertion emphasizes the authority of the Karta in HUF matters and underscores their right to make decisions regarding HUF property, even without the consent of other members.

The case revolved around a joint family property that was mortgaged by the petitioner's father as one of the guarantors. The petitioner argued that the property was a part of the HUF, with his father serving as the Karta. The Court cited the well-established principle that the Karta has the right to sell, dispose of, or alienate HUF property, even without the consent of other family members.

Crucially, the judgment highlighted that a coparcener may challenge the actions of a Karta post-alienation, but only if the alienation was not for legal necessity or the betterment of the estate. In this particular case, no such assertion was proven.

As a result, the Supreme Court upheld the impugned judgment, dismissing the special leave petitions. This ruling not only clarifies the role and authority of the Karta in HUF property matters but also underscores the importance of legal necessity or estate improvement in such transactions.

This judgment is expected to have significant implications for property rights within Hindu Undivided Families, reaffirming the rights of the Karta and providing guidance on when challenges to their actions can be considered valid.

Legal experts and scholars have lauded this decision as a significant step in upholding the traditions and principles of Hindu family law while also providing clarity on property transactions within HUFs.

Date of Decision: 03-10-2023

N.S. BALAJI VS  THE PRESIDING OFFICER DEBT RECOVERY TRIBUNAL & ORS. 

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