Karta can mortgage the property with consent of the co parceners
HUF property
Property is in Name of HUF. Father is Karta. 2 sons, daughter in Law and 2 minor Grand Son is co-parceners in HUF. HUF want to Mortgage Property for business Loan Setting by One SON. All major coparceners are ready to give consent (Including for Minor their father is Giving Consent) regarding mortgage of property. Karta including all major coparcener are guarantor in this proposal... Also they are ready to give declaration that they will repay the bank dues first in case need arises... Is this transaction ok in eyes of Law..
Asked 3 years ago in Property Law
Religion: Hindu
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8 Answers
The transaction of mortgaging the property of a Hindu Undivided Family (HUF) is valid in the eyes of law, provided that consent is given by the Karta of the HUF and all other major coparceners. In addition, consent from the minor coparceners can also be obtained through their father. Furthermore, the Karta and other major coparceners can act as guarantors for the loan if required.
IN THIS CASE HUF PROPERTY IS GOING TO MORTGAGED FOR "FIRM" OPERATE BY ONE OF COPARCENERS AS "PROPRITER". MY DOUBT IS HUF PROPERTY CAN BE MORTGAGE FOR BENEFIOT OF HUF ONLY, IN THIS CASE BENEFIT IS COPARCERNER(INDIVIDUAL) WHO WILL START THIS FIRM AGAINST MORTGAGE OF HUF PROPERTY. HUF AND OTHER COPARCERN IS READY TO GIVE GUARANTEE IN THIS CASE.
Asked 3 years ago
Let the new business be set up in name of HUF only
The HUF property can be used for the common interest of all the coparcaners and not in the interest of any single individual
If the property belonging to HUF is mortgaged for loan for family business then with the consent of all members, it can be offered towards mortgage loan.
HUF may mortage its property for purposes of Security, to third parties (group Co.) PROVIDED all the HUF members pass & sign a resolution for the purposes, wherein all the HUF members would be liable /prosecutable for default
As you have rightly said, generally the HUF property could be mortgaged only for the benefit of the HUF. If all the coparceners give express consent, the HUF property could very well be mortgaged for the purpose stated.
Yes it can be used for Benefit of HUF only.Its should be common benefit
Dear client,
As per the Hindu Succession Act, 1956, a HUF is a legal entity with a separate identity from its members. The Karta of the HUF has the power to manage the property of the HUF and also has the power to make transactions on behalf of the HUF.
If the Karta of the HUF, along with all the major co-parceners, is willing to give consent for the mortgage of the HUF property, and they are also willing to act as guarantors for the loan, then the transaction should be legally valid.
However, it is advisable to consult a legal expert to ensure that all legal requirements and formalities have been complied with, and to protect the interests of all parties involved in the transaction.
