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Managing Members in relation to HUF

The word Managing Member is also very widely used in relation to HUF. Managing member is a member of the HUF who manages the entire affairs of the HUF. A Karta is by default the Managing Member of the HUF. However, sometimes, it may happen that the Karta being the seniormost coparcener is not in a position to act and manage the affairs of the HUF and in this case, he appoints any member of the HUF as the Managing Member who runs the HUF based on guidance and directions received from the Karta and he therefore, in his such capacity is referred to as the Managing Member. In the case of Mudit vs Ranglal (1902) 29 Cal 797, it was held that a Senior Member may give up his right of, management, and a junior member may be appointed as manager.

 

In the case of Sunil Kumar v. Ram Parkash, (1988) 2 SCC 77 fAIR 1988 SC 5761 , at page 86 the Apex Court held as follows re power of. Karta/managing member

 

Managing Member and his Powers

 

In a Hindu family, the karta or Manager occupies a unique position. It is not as if anybody could become Manager of a joint Hindu family. “As a general rule, the father of a family, if alive, and in his absence the senior member of the family, is alone entitled to manage the joint family property.” The Manager occupies a position superior to other members. He has greater rights and duties. He must look after the family interests. He is entitled to possession of the entire joint estate. He is also entitled to manage the family properties. In other words, the actual possession and management of the joint family property must vest in him. He may consult the members of the family and if necessary take their consent to his action but he is not answerable to every one of them.


The legal position of karta or Manager has been succinctly summarised in the Mayne’s Hindu Law (12th Edn. para 318) thus:


“318. Manager’s legal position. — The position of a karta or manager is sui generis; the relation between him and the other members of the family is not that of principal and agent, or of partners. It is more like that of a trustee and cestui que trust. But the fiduciary relationship does not involve all the duties which are imposed upon trustees.”


The managing member or kart has not only the power to manage but also power to alienate joint family property. The alienation may be either for family necessity or for the benefit of the estate. Such alienation would bind the interests of all the undivided members of the family whether they are adults or minors. The oft-quoted decision in this aspect, is that of the Privy Council in Hunoomanpersaud v. Babooee. There it was observed at p. 423: “That power of the manager for an infant heir to charge an estate not his own is, under the Hindu law, a limited and qualified power. It can only be exercised rightly in case of need, or ‘for the benefit of the estate.” This case was that of a mother, managing as guardian for an infant heir. A father who happens to be the Manager of an undivided Hindu family certainly has greater powers to which I will refer a little later. Any other manager however, is not having anything less than those stated in the said case. Therefore, it has been repeatedly held that the principles laid down in that case apply equally to a father or other coparcener who manages the joint family estate.
 
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