In this article, we shall look at the introduction of the Hindu Minority and Guardianship Act and the meaning of the term natural guardians.

As per Section 1 Clause (2) of the Act, the Act extends to the whole of India except the State of Jammu and Kashmir and applies also to Hindus domiciled in the territories to which this Act extends who are outside the said territories.

As per Section 2 of the Act, The provisions of this Act are in addition to, and not in substitution or derogation of, the Guardian and Wards Act of 1890.

As per Section 3 of the Act, not only Hindus but Lingayat, Virashaiva, Brahmo followers, Prathana Samaj followers, Arya Samaj followers, Buddhist, Sikhs, and Jains are also covered under this Act.  Muslims, Christians, Parsis, and Jewish are not covered under this act.

Similarly, under Section 3 of the Act, it is applicable to

1. any child, legitimate or illegitimate, both of whose parents are Hindus, Buddhists, Jains or Sikhs by religion;
2. any child, legitimate or illegitimate, one of whose parents is a Hindu, Buddhist, Jain or Sikh by religion and who is brought up as a member of the tribe, community, group or family to which such parent belongs or belonged; and
3. any person who is convert or re-convert to the Hindu, Buddhist, Jain or Sikh religion

Section 4 Clause (a) says “minor” means a person who has not completed the age of eighteen years.

Section 4 Clause (b) says “guardian” means a person having the care of the person of a minor or of his property or of both his person and property, and includes— (i) a natural guardian, (ii) a guardian appointed by the will of the minor’s father or mother, (iii) a guardian appointed or declared by a court, and (iv) a person empowered to act as such by or under any enactment relating to any Court of wards.

The above-mentioned types of guardians are not exhaustive. A person who is taking care of a minor without the authority of law can also be a guardian under the above definition and is called a de facto guardian. De facto guardians include self-appointed guardians and guardians by affinity, such as guardians for a minor widow. However, a person does not have the right to sell or deal with minor’s property if he is merely a de-facto guardian as per section 11. Testamentary guardians were also introduced in Hindu law: It was also accepted that the supreme guardianship of the minor children vested in the State as parens patrie and was exercised by the courts.

Concept of Natural Guardians:

Section 6 of the Act, defines the meaning of the term “Natural guardians”.

Section 6: The Hindu Minority and Guardianship Act, 1956:

Natural guardians of a Hindu minor:

The natural guardians of a Hindu minor; in respect of the minor’s person as well as in respect of the minor’s property (excluding his or her undivided interest in joint family property), are—

(a) in the case of a boy or an unmarried girl—the father, and after him, the mother: provided that the custody of a minor who has not completed the age of five years shall ordinarily be with the mother;

(b) in the case of an illegitimate boy or an illegitimate unmarried girl—the mother, and after her, the father;

(c) in the case of a married girl—the husband:

Provided that no person shall be entitled to act as the natural guardian of a minor under the provisions of this section—

(a) if he has ceased to be a Hindu, or

 (b) if he has completely and finally renounced the world by becoming a hermit (vanaprastha) or an ascetic (yati or sanyasi).

Explanation.—In this section, the expressions “father” and “mother” do not include a step-father and a step-mother

In case of Legitimate Boy and Legitimate Unmarried Girl:

Under Sec. 6 Clause (a) of the Hindu Minority and Guardianship Act, in case of a legitimate boy and legitimate unmarried girl, his/her biological father is the natural guardian. It is only when the father is disqualified or is no more; the biological mother becomes the natural guardian. The explanation appended to section 6 clarifies that the ex­pression “father” and “mother” do not include a “step-father” and a “step-mother”.

In case of a minor boy or unmarried girl of age less than 5 years, ordinarily, the guardianship of such a child is given to the mother.

In case of Illegitimate Boy and Illegitimate Unmarried Girl:

Under Sec. 6 Clause (ab) of the Hindu Minority and Guardianship Act, in case of an illegitimate boy or illegitimate unmarried girl, his/her biological mother is the natural guardian. It is only when the mother is disqualified or is no more; the biological father becomes the natural guardian.

In Case of Married Girl:

In the case of married girl her husband is her natural guardian provided that he is not minor.

Persons Barred From Becoming Guardian of Hindu Minor:

The section 6 Clause (a) sub-clauses (a) and (b) further lies down that a person will be disentitled to be the natural guardian of a minor if he has ceased to be a Hindu, or if he had completely renounced the world by becoming a hermit (Vanaprasthi) or an ascetic (Yati or Sanyasi).

Section 7: The Hindu Minority and Guardianship Act, , 1956:

Natural guardianship of adopted son.

The natural guardianship of an adopted son who is a minor passes, on adoption, to the adoptive father and after him to the adoptive mother.

Section 7 refers to the guardianship of the adopted son. Accord­ing to this section the natural guardianship of an adopted son who is a minor pass, on adoption, to the adoptive father and after him to the adoptive mother. Thus the adoptive parents are treated as biological parents in eyes of law.

This Section speaks only of an adopted son but makes no mention of an adopted daughter. The uncodified Hindu Law also did not recognize the adoption of a daughter. However, it may be noted that the Act came into force before passing of the Hindu Adoptions and Maintenance Act, 1956, which now recognizes the adoption of a daughter also, and confers that right both upon male and female Hindu.

Section 12 of the Hindu Adoptions and Maintenance Act, 1956 provides that an adopted child shall be deemed to be the child of his or her adoptive father or mother for all purposes with the effect from the date of the adoption.

Case Laws Explaining the Term Natural Guardians:

In P.T. Chathu Chettiar v. K. K. Kanaran, AIR. 1984 Ker. 118 case, the Court held that when the father is alive and is not disqualified to act as the guardian of the minor, it is incompetent for the mother to interpose herself as the guardian of the minor.

In Rajalakshmi v. Ramachandran, AIR 1967 Mad 113 case, the Court held that if a person donates property to a minor and appoints himself a guardian to look after the property he would not be a guardian within the meaning of the Act

In Essakkayal nadder v. Sreedharan Babu, AIR 1992 Ker 200 case, the mother of the minor was dead, but the father was not residing with his children. The Court held that the father is still alive, has not ceased to be a Hindu or renounced the world and has not been declared unfit, this does not authorize any other person to assume the role of natural guardian and alienate the minor’s property.

In Gita Hariharan v. Reserve Bank of India, AIR 1999 SC 1149 case, an educated and employed mother wants to make her five-year-old child nominee for her investments but asked for the paperwork in which she was either required to provide the name of the father or guardianship certificate. The Supreme Court held that under certain circumstances, even when the father is alive mother can act as a natural guardian. The Court also said that the term ‘after’ used in Section 6(a) has been interpreted as ‘in absence of husband’ instead ‘after the life-time of husband’. This new ruling had benefitted the society in two ways, firstly protection of rights of a child born out of wedlock and secondly provided a legal status to single mother especially for the children of sex workers. This judgment will at least do some good and safeguard the rights of unwed mothers or illegitimate child which Guardianship act had mentioned but society had still not accepted.

In a case Jajabhai v. Pathankhan, AIR 1971 SC 315 case, where a mother and father had fallen out and were living separately and the minor daughter was under the care and protection of her mother, the Court held that the mother could be considered as the natural guardian of minor girl.

In Smt. Dr. Snehalata v. Mahendra Narain, AIR 1979 Raj. 29 case, the Rajasthan High Court held that till the girl attained the age of 5 years it was not possible for the applicant’s father to have moved for the custody of the girl as contained in section 6 of the Act of 1956. Hence mother alone was entitled to the custody of the minor daughter

Empowerment of Mother as natural Guardian Under the Act:

The Hindu Minority and Guardianship Act, 1956 has im­proved the status of the mother as the natural guardian. Under the old Hindu Law, a mother could not act as a natural guardian of the child if the father has written any testament depriving her of the natural guardianship of the minor. Now under the Hindu Minority and Guardianship Act, 1956, the mother is considered as natural guardian after father or in absence of the father.

When studying Section 6 of the Act we have to understand provisions of Section 12 of the Act.

Section 12:The Hindu Minority and Guardianship Act, , 1956:

Guardian not to be appointed for minors undivided interest in joint family property.—

Where a minor has an undivided interest in joint family property and the property is under the management of an adult member of the family, no guardian shall be appointed for the minor in respect of such undivided interest: Provided that nothing in this section shall be deemed to affect the jurisdiction of a High Court to appoint a guardian in respect of such interest.

Section 12 substantially confirms the old Hindu Uncodified Law. If the minor is a member of the join mitakshara family, the father, as Karta, is entitled to management of whole coparcenary property, including the minor’s interest. After his death, this right of management passed on to the eldest son as next Karta. Now, the reason why guardian cannot be appointed of the undivided interest of such a member is not separate or undivided property. Such a case would, therefore. be governed by the general principles of Hindu Law relating to joint family property.

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When starting a business or is interested in expanding an existing one, an important decision relates to the choice of the form of organization. By weighing the advantages and disadvantages of each form of organization, the most appropriate form is determined. The decision of selection also depends on the form which satisfies the need of the entrepreneur. Various forms of business organizations from which one can choose the right one include:

• Sole proprietorship,
• Joint Hindu family business,
• Partnership,
• Cooperative societies, and
• Joint-stock company.

Joint Hindu Family Business

Joint Hindu family business is the oldest and specific form of business organization found only in India. It refers to a form of organization wherein the business is owned and carried on by the members of the Hindu Undivided Family (HUF). It is governed by the Hindu Law, which is one of the several religious laws (personal laws) prevalent in India. The firm is created by the operation of law. It does not have any separate and distinct legal entity from that of its members. When two or more families agree to live and work together, throw their resources and labour with joint-stock and share profits and the losses together, then this family is known as composite family.

The basis of membership in the business is birth in a particular family. Any person born into the family (boy or girl) up to the next coming three successive generations can be members of the business. The business is controlled by the head of the family who is the eldest member and is called karta or ‘Manager’. Karta is the main person responsible for business and finances. All members have equal ownership right over the property of an ancestor and they are known as co-parceners.

There are two systems which govern membership in the family business, viz., Dayabhaga and Mitakashara systems. Dayabhaga system prevails in West Bengal and Assam and allows both the male and female members of the family to be co-parceners. Mitakashara system, on the other hand, prevails all over India except West Bengal and allows only the male members to be co-parceners in the business.

Features of Joint Hindu family business:

• Formation: For a joint Hindu family business, there should be at least two members in the family. There must be some assets, business or ancestral property that they have inherited or will eventually inherit. The HUF business does not require any agreement or documentation as membership is by birth. It is governed by the Hindu Succession Act, 1956.
• Liability: The liability of all members except the karta is limited to their share of the co-coparcenary property of the business. Thus their liability is limited. The karta, being the head of the family, however, has unlimited liability. Thus the Karta is not only liable to the extent of his share in the business but his separate property is equally attachable and amount of debt can be recovered from his separate property.
• Control: The control of the family business lies with the karta. He takes all the decisions and is authorized to manage the business. His decisions are binding on the other members. He may choose to confer with the co-parceners about various decisions, but his decision can be independent. His actions will be final and also legally binding. The members of the family have full faith and confidence in Karta. Only Karta is entitled to deal with outsiders. But other members can deal with outsiders only with the permission of Karta. Only Karta has the implied authority to contract debts and pledge the credit and property of the firm for the ordinary purpose of the businesses of the firm.
• Continuity: The HUF business can be continued perpetually.  The business continues even after the death, lunacy or insolvency of the karta or any other member, as the next eldest member takes up the position of karta, leaving the business stable. The business can, however, be terminated (dissolved) with the mutual consent of all the members.  Any single member has no right to get the business dissolved.
• Minor Members: The inclusion of an individual into the business occurs due to birth in a Hindu Undivided Family. Hence, minors can also be members of the business. But they will enjoy only the benefits of the organization.

Merits of Joint Hindu Family Business:

• Easy to Start: It is very easy to start the Joint Hindu Family Business. No legal formalities are required to be faced, such as registration. It requires no agreement.
• Effective control and Prompt Decision Making:
• Like any other organization, there is scope for disagreements and conflicts. But since the karta has absolute decision making power. it will lead to prompt, flexible and effective decision making. The. This avoids conflicts among members as no member can interfere with his right of karta to take a decision. The prompt decisions help the business to grab opportunities.
• Secrecy: In Joint Hindu Family Business, all the decisions are taken by the ‘Karta’ himself. He is in a position to keep all the affairs to himself and maintains perfect secrecy in all matters.
• Continuity: The HUF business can be continued perpetually.  The death, lunacy or insolvency of the karta or any member will not affect the business as the next eldest member will then take up the position. Hence, operations are not terminated and continuity of business is not threatened.
• Limited Liability of Members:
• The liability of all the co-parceners except the karta is limited to their share in the business, and consequently, their risk is well-defined and precise. This keeps the balance between power and responsibility.
• Freedom Regarding Selection of Business: The Karta is at freedom to select any business of his choice. He has not to depend on others.
• Increased Loyalty and Cooperation: Since the business is run by the members are relatives and members of the same family, there is a greater sense of loyalty and cooperation towards one other. Pride in the growth of the business is linked to the achievements of the family. The trust among members is also there and leads to overall cooperation.

Demerits of Joint Hindu Family Business:

• Limited Resources: The capital is limited only up to the resources of one family. No outside members other than family members can be introduced to the HUF.  Thus the joint Hindu family business faces the problem of limited capital as it depends mainly on ancestral property. This limits the scope for expansion of the business. The Karta cannot take advantage of economies of large size due to limited finance.
• Unlimited Liability of Karta: The karta has power but he is burdened not only with the responsibility of decision making and management of the business, but also suffers from the disadvantage of having unlimited liability. His personal property can be used to repay business debts. This may make him overly cautious and timid in his business dealings. Another factor is that he may even be held responsible for the actions of other members.
• Dominance of Karta: The karta individually manages the business and takes all the decisions which may at times not be acceptable to other members. This may cause conflict amongst them and may even lead to breaking down of the family unit.
• Limited Managerial Skills: The position of karta is given to the senior-most family member, whether he is the most qualified or not is not taken into consideration. Since the karta cannot be an expert in all areas of management and he may not be able to perform all managerial functions because of the limitation of time and energy. the business may suffer as a result of his unwise decisions. His inability to decide effectively may result in poor profits or even losses for the organization. Due to the limited scale of operations and financial resources, it may not be feasible for HUF to secure the services of experts in different fields like purchasing, production, and marketing.
• Misuse of Power: The karta is the only decision-maker of such organization. No other member can interfere in his management. This may lead to the misuse of power and the Karta may use the power for his personal interest.

The joint Hindu family business is on the decline because of the diminishing number of joint Hindu families in the country.

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