What are the duties and liabilities of the manager of joint Hindu family?– Explained!

The duties and lia­bilities of the manager of a Hindu family are enumerated below:

1. Liability to account on partition:

A Karta or manager of a joint Hindu family is not liable to account in the absence of proof of direct misappropriation of fraudulent and improper con­version of the money to his personal use and he is liable to account for what he has received and not for what as a reasonable and prudent manager he should have received.

He is not even bound to keep accounts unless the nature of the family properties is such as in the case of a trading family, that it becomes neces­sary to keep account. (Ramnathan Chettiar v. Narayan Chettiar, A.I.R. 1955 Mad. 629).

He is neither an agent nor an express trustee. He cannot, in strict parlance, be a trustee and the rules applicable to strict ac­counts and cestui que trusts existing in England are not appli­cable in India.

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The very structure of Mitakshara joint family excludes the possibility of a separate share and as such a right to account against the manager of the receipt and disbursements, i.e. of his management of the family and for a share of income, is a right which a coparcener of a Mitakshara family cannot enforce inde­pendently of the suit for partition. The result would be that the decree cannot direct an account as from the date before the sever­ance of status.

After the severance of status, the members cease to be coparcener and their position becomes as that of co-tenants with reference to the other members of the joint family, in respect of properties. Once the shares are defined and the relationship of co tenancy is established, they become entitled to ask for the account of income. (Ramnathan Chettiar v. Narayan Chettiar (ibid)).

Apart from law, on principles of general rule, the liability to account arises. An implied agency of the one who is in possession of the property for the others can, also be inferred either on the basis of tenancy or on equitable considerations. A co-owner can­not, therefore, escape liability to account to his other co-owners.

The manger is not liable for his past dealings with family property. He is liable to account only for those assets which are existing at -the time of the partition. He is however, liable from and after the date when a suit for partition is instituted because the suit for partition amounts to a severance of joint status.

Under the Dayabhaga Law, i.e., according to the Bengal school, a copar­cener can, without suing for partition, require the manager to account for his dealings with the joint family property and its income and in case of his refusal to render the account he can be compelled to do so by a suit (Benoy Krishna Ghosh Chaudri v. Amarendra Krishna Ghosh Chaudri, A.I.R. 1940 Cal. 51].

2. No new business so as to bind other coparceners:

The manager cannot start a new business so as to bind the interests of other coparceners in the family property except with their con­sent, they being all adults.

According to the Madras High Court a managing member, whether he is father or senior coparcener, cannot start a new trade or business so as to impose upon minor members the risk of such business. However, this limitation on the powers of a manager does not apply to the manager of a trading family or one who’s Kulachara or hereditary vacation is trade.

Otherwise there would be undue curtailment of commercial adventure and enterprise which is the very life, so to speak, of a hereditary trading family. In the case of a family belonging to the community whose hereditary vocation or Kulachara is trade or commerce, the borrowings of the father purposes of the family business s entered upon for the benefit of his family need not be justified on the ground of legal necessity or benefit. (Per Mock J. in Kulitalai Bank Ltd. Triuchirapali v. S.N. Nagamanickam, A.I.R. 1955 Mad. 670],

Though the imposition of the limitation on the powers of a manager of a trading family whose Kulachara is trade may amount to a curtailment of the spirit of commercial adventure and enter­prise in a trading family; on the other hand it hold that in a trading family the father or manger can start any business of trade however risky it may be, would be t hazard the interest of minors in the joint family property.

It orders to bind the minors’ interest in the property, it has to be shown that not only that the family was a Vaisya family but in fact the ancestors engaged themselves in trade. (Per Krishnaswami Nayadu, J. in Kulitalai Bank Ltd. v. S.V. Nagamanickam, and 1959 Mad. 670],

3. Liability to compensate:

In case of misappropriation or fraudulent and improper conversion by the manager of the family property he is liable to compensate the other coparceners in re­spect of their shares in property for money so misappropriated.

4. Voidable Alienation:

If the manager alienates the coparacenary property without any justified cause (i.e., without legal necessity or not for the benefit of family estate or without the consent of other members, the alienation is voidable and can be set aside by the other members).