CASE PRODLEM-2
Q.2. Gopal Sharma and Balram Sharma are two brothers, who inherited some ancestral property.They
decided to form a Hindu Undivided Family (HUF) business consisting of four male members.Gopal
Sharma is the elder brother. So he became Karta'. The business took a loan of rupee 20 lakh from Punjab
National Bank having maturity period of 5 years. Due to poor financial position of the business,they
were unable to repay the loan. They sold the ancestral property for 10 lakh and paid the same to
Punjab National Bank. They could not pay the balance amount of loan with interest. T
case for recovery of the balance amount. Gopal Sharma pleaded the court that the loan
purpose of business, therefore, all the members of the business were liable to repay thy
held that all other members were responsible only to the extent of their share in b
business property was already sold. However, Gopal Sharma, being 'Karta' would I
balance amount even by selling his personal properties. Gopal Sharma had to sell som
assets to repay the balance amount of bank loan.
(a) Is the court's decision justified? Give reasons in support of your answer.
(b) State any three other features of HUF businesses.
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get to get the same time as
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