'Karta' Personally Liable if HUF is Unable to Satisfy Arbitral Award: Bombay HC

The Bombay High Court also declared that a 'Karta' has a personal and unlimited liability for satisfying unpaid arbitral dues of a Hindu Undivided Family (HUF), thereby enabling creditors to proceed against the Karta's private assets without a separate decree.

In a major boost for award creditors, the Bench of Justice R.I Chagla has held that the "seat court" retains the jurisdiction to execute an arbitral award and provide interim relief, even if the judgment debtor's assets are situated outside of its territorial jurisdiction.

This decision was pronounced in response to an award-holder, Manjeet Singh T. Anand's Interim Application which sought reliefs in support of the enforcement of a final arbitral award dated November 30, 2023. Nishant Enterprises HUF was awarded a principal amount of ₹12.52 crore with 10% interest and fees of ₹22.25 lakh by the sole arbitrator.

Despite this, a sum of ₹14.79 crore remained unsatisfied. Following the award-debtor's disclosure affdivait that revealed a lack of adequate assets to satisfy even 5% of the decretal sum, the award-holder sought coercive execution and protective remedies in the Bombay High Court.

The HUF (respondents) raised a preliminary objection, contending that under Sections 38 and 39 of the Code of Civil Procedure (CPC), an execution application can only be filed where the assets are located.

It was argued that the Bombay High Court lacked territorial jurisdiction as all stated assets were situated in Thane. Regarding liability, the Karta contended that HUF being a separate legal entity, his personal assets cannot be executed in the absence of a personal arbitral award.

The award-holder countered that the Supreme Court jurisprudence does not deprive the seat court of execution authority and that arbitration law assumes a pro-enforcement approach. It was further asserted that a Karta's obligation for commercial debts of the HUF is personal and unlimited under established Hindu law. This principle applies at the enforcement stage even in cases where the arbitral tribunal did not issue a separate award against the Karta.

The Bench rejected the jurisdictional challenge and held that the seat court is never denuded of jurisdiction even post-award. The Court made it clear that decisions like Sundaram Finance v. Abdul Samad and Anr., do not oust the seat court's jurisdiction to issue enforcement-related relief, but rather, they offer an additional way to execute a judgment where assets are located.

On personal liability, the Court adopted a clear pro-enforcement stance, observing that the defence was a “brazen attempt, so that the Applicant is left holding a mere paper decree.” The Court emphatically held that “it is settled law that the Karta's liability for unsatisfied debts or dues of the HUF is 'personal' and 'unlimited'.”

The Court noted that the arbitral tribunal's refusal to pass a separate money award against the Karta did not bar execution against him, as questions of Hindu law liability “never and could never even arise for consideration before the Arbitral Tribunal.” Since the HUF admittedly carried on business, the Karta's personal assets were held reachable in execution.

Accordingly, the Bombay High Court rejected both preliminary arguments, upheld its jurisdiction as the arbitral seat court and decided that the Karta's personal assets could be used to enforce the arbitral award.

Furthermore, by ordering the respondents to disclose all assets through a comprehensive affidavit and bank records, it restrained them from alienating any property and appointed a Court Receiver to take possession of the secured assets.

Case Title: Manjeet Singh T. Anand v. Nishant Enterprises HUF & Anr.

Citation: 2026 LLBiz HC (BOM) 31

Case No.: Interim Application No. 5306 of 2025 in Comm. Execution Application No. 19 of 2025

Coram: Justice R.I. Chagla

Date of Decision: 8 January 2026

Appearances:

– For Decree Holder: Mr Rashmin Khandekar, Mr. Jamsheed Master, Mr. Anand Mohan and Mr. Aniket Worlikar

– For Respondent No.1: Mr. Prathamesh Kamat, Mr. S.B. Rao and Mr. Gauri Rao

– For Respondent No.2: Dr. Sanjay Jain, Mr. Nakul Jain, Mr Sankalp Anantwar and Mr. Ronak Mistry