👍👍👍👍👍Om Siddharaj Co-Operative … vs The State Of Maharashtra & Others on 24 June, 1998

https://indiankanoon.org/doc/653957/

Bombay High Court

Om Siddharaj Co-Operative … vs The State Of Maharashtra & Others on 24 June, 1998

Equivalent citations: 1998 (4) BomCR 506

Author: . B Saraf

Bench: . B Saraf, A Sakhare

ORDER Dr. B.P. Saraf, J.

1. By this appeal the appellant Co-operative Housing Society seeks to challenge the order of the learned Single Judge dated 2nd March 1998 rejecting the writ petition of the appellant society against the order of the Minister of State (Co-operation) by which he allowed the revision application of the respondent No. 5 Pradeep Kamat and directed the appellant society to register the nomination of Mr. Kamat as nominee of the original member late Shri H.K. Desai.

2. The material facts of the case, giving rise to this appeal, are as follows :

The appellant is a Co-operative Housing Society. One of its members, Shri H.K. Desai, made a nomination on 7th December 1979 in favour of his wife Smt. Nalini. The said nomination was entered by the appellant society in its nomination register. On 15th June 1992, Mr. Desai sent another nomination in the prescribed form to the appellant society in favour of respondent No. 5 Shri Pradeep Kamat. Mr. Desai died on 15th July 1992. The society refused to register the nomination of Mr. Kamat on the ground, inter alia, that he was not a relative of the original member Mr. Desai. Mr. Kamat appealed to the Deputy Registrar, Co-operative Societies against the decision of the appellant society not to register the nomination. The Deputy Registrar rejected the appeal. Aggrieved by the above order, Mr. Kamat approached the Divisional Joint Registrar, Co-operative Societies. The Divisional Joint Registrar also rejected the application on the ground that Mr. Kamat was not the natural heir of the original member Mr. Desai and confirmed the order of the Deputy Registrar. Against the above order, the nominee Mr. Kamat approached the State Government under section 154 of the Maharashtra Co-operative Societies Act, 1960 (“Act”). Before the Minister of State (Co-operation), who heard the revision application, it was contended on behalf of Mr. Kamat that under section 30 of the Act it was not necessary that the nominee should be a relative of the member. The Minister accepted the above contention and allowed the revision application. The appellant society challenged the decision of the Minister before this Court by filing a writ petition under Article 226 of the Constitution. The learned Judge rejected the writ petition by following the Single Judge decision of this Court in Gopal Vishnu Ghatnekar v. Madhukar Vishnu Ghatnekar, . Aggrieved by the above order of the learned Single Judge, the appellant society is before us by way of this appeal.

3. We have heard Mr. D.H. Mehta, learned Counsel for the appellant, who submits that the nomination in this case is contrary to the. requirements of section 30 of the Act. According to him, section 30 of the Act does not contemplate nomination in favour of any person other than the heir or legal representatives of a member. Our attention was drawn by the learned Counsel to the fact that there was an earlier nomination in favour of the wife of the original member. According to him, unless the subsequent nomination in favour of respondent No. 5 is recorded by the appellant society in its ragister, it would not be operative. There is no dispute in this case about the fad that the subsequent nomination in favour of respondent No. 5 was submitted to the appellant society during the life time of the member. The learned Counsel could not tell us as to why the society did not record it despite it being filed by the original member. He, however, reiterated his contention that section 30 of the Act contemplates nomination only in favour of heir or legal representatives of the deceased member and not in favour of strangers.

4. We have carefully considered the submissions of Mr. Mehta, learned Counsel for the appellant. Section 30 of the Act, which deals with transfer of interest on the death of a member, reads as under :

“30. Transfer of interest on death of member (1) On the death of a member of a society, the society shall transfer the share or interest of the deceased member to a person or persons nominated in accordance with the rules, or, if no person has been so nominated to such person as may appear to the committee to be the heir or legal representative of the deceased member.

Provided that, such nominee, heir or legal representative, as the case may be, is duly admitted as a member of the society:

Provided further that, nothing in this sub-section or in section 22 shall prevent a minor or a person of unsound mind from acquiring by inheritance or otherwise, any share or interest of a deceased member in a society.

(2) Notwithstanding anything contained in sub-section (1), any such nominee, heir or legal representative, as the case may be, may require the society to pay to him the value of the share or interest of the deceased members, ascertained in accordance with the Rules.

(3) A society may pay all other moneys due to the deceased member from the society to such nominee, heir or legal representative, as the case may be.

(4) All transfers and payments duly made by a society in accordance with the provisions of this section shall be valid and effectual against any demand made upon the society by any person.”

On a plain reading of section 30, it is clear that on death of a member of the society, it is incumbent on the society to transfer the share or interest of the deceased member to” a person or persons nominated in accordance with the Rules“. It is only in the event of there being no nomination of any person, the society can transfer the share or interest of the deceased member to “such person as may appear to the committee to be the heir or legal representative” of the deceased member. The language of the section is clear and unambiguous. If a person is nominated in accordance with the Rules, the society is obliged to transfer the “share and interest of the deceased member” to such nominee. It is no part of the business of the society in that case to find out the relation of the nominee with the deceased member or to ascertain and find out the heir or legal representatives of the deceased member. It is only if there is no nomination in favour of any person, that the share and interest of the deceased member has to be transferred to such person as may appear to the commitee of the society to be the heir or legal representative of the deceased member. The contention of the learned Counsel for the appellant that the nomination can be only in favour of an heir or legal representative is not tenable on the face of the clear language of section 30 of the Act.

The procedure of nomination is laid down in Rule 25 of the Maharashtra Cooperative Societies Rules, 1961 (“Rules”) which reads as follows :

“25. Nomination of persons :

(1) For the purpose of transfer of his share or interest under sub-section (1) of section 30, a member of a society may, by a document signed by him or by making a statement in any book kept for the purpose by the society nominate any person or persons. Where the nomination is made by a document, such document shall be deposited with the society during the member’s life time and where the nomination is made by a statement, such statement shall be signed by the member and attested by one witness.

(2) The nomination made under sub-rule (1) may be revoked or varied by any other nomination made in accordance with that sub-rule.

(3) (i) Where a member of a society has not made any nomination, the society shall on the member’s death, by a public notice exhibited at the office of the society, invite claims or objections for the proposed transfer of the share or interest of the deceased within the time specified in the notice.

(ii) After taking into consideration the claim or objections received in reply to the notice or otherwise, and after making such inquiries as the committee considers proper in the circumstances prevailing, the committee shall decide as to the person who in its opinion is the heir or the legal representative of the deceased member and proceed to take action under section 30.”

It is clear from Rule 25 that for the purpose of transfer of his share or interest under sub-section (1) of section 30, a nomination can be made by a member in favour of any person either (i) by a document signed by him, or (ii) by making a statement in any book kept for that purpose by the society. Where the nomination is made by a document signed by the member, such document should be deposited with the society during the member’s life time. Sub-rule (2) clearly provides that a nomination can be revoked or varied by another nomination made in accordance with sub-rule (1). It is only where the member has not made any nomination, that the society is required to ascertain the heir or legal representative of the deceased member by following the procedure laid down in sub-rule (3). If there is a valid nomination, the society has to deal with the nominee in place of the deceased member. The transfer made in favour of the nominee constitutes a valid and effectual discharge of the liability of the society against any demand made upon it by any other person.

5. In the instant case, there is no dispute about the fact that a nomination was made by the original member in favour of respondent No. 5 by a document signed by him and the said document was deposited by him with the society during his life time. The document was in the form prescribed by Bye-Law No. 34 of the Housing Society, viz,. Form 15-A and was duly attested by two witnesses as required by the Bye-laws. There is no infirmity in the nomination. The earlier nomination made by the member in favour of his wife got revoked by this nomination. It was, therefore, incumbent upon the society, after the death of the member, to transfer his share and interest to the nominee and to deal with him for all purposes in place of the deceased member. It was not open to the society to refuse to deal with the nominee on the ground that he was not a relative of the deceased member. No such qualification of a nominee is contemplated either by section 30 of the Act or Rule 25 of the Rules. That being so, we are of the clear opinion that the Minister of State (Co-operation) was right in setting aside the decision of the society and the orders of the Deputy Registrar and Divisional Joint Registrar of Co-operative Societies and holding that the society was bound to accept the nomination and act in accordance with the same. The learned Single Judge was right in rejecting the writ petition of the society against the above decision.

6. We have also perused the Single Judge decision of this Court in Gopal Vishnu Ghatnekar v. Madhukar Vishnu Ghatnekar (supra) on which reliance was placed by the Minister of State (Co-operation) in support of his order and by learned Single Judge for rejecting the writ petition. In that case, it was held that the purpose of nomination under section 30 of the Act is to make certain the person with whom the society has to deal and not to create interest in the nominee to the exclusion of those who in law will be entitled to the estate. The learned Judge observed :

“The purpose is to avoid confusion in case there are disputes between the heirs and legal representatives and to obviate the necessity of obtaining legal representation and to avoid uncertainties as to with whom the society should deal to get proper discharge. Though, in law, the society has no power to determine as to who are the heirs or legal representatives, with a view to obviate similar difficulty and confusion, the section confers on the society to determine who is the heir or legal representative of a deceased member and provides for transfer of the shares and interest of the deceased members’ property to such heir or legal representative. Nevertheless, the persons entitled to the estate of the deceased do not lose their right to the same.”

The legal position was summed up thus :

“It, therefore, follows that the provision for transferring a share and interest to a nominee or to the heir or legal representative as will be decided by the society is only meant to provide the interregnum between the death and the full administration of the estate and not for the purpose of conferring any permanent right on such a person to a property forming part of the estate of the deceased. The idea of having this section is to provide for a proper discharge to the society without involving the society into unnecessary litigation which may take place as a result of dispute between the heirs or uncertainty as to who are the legal heirs or representatives..…Even when a person is nominated or even when a person is recognised as an heir or a legal representative of the deceased member, the rights of the persons who are entitled to the estate of the interest of the deceased member by virtue of law governing succession are not lost and the nominee or the heir or the legal representative recognised by the society, as the case may be holds the share and interest of the deceased for disposal of the same in accordance with law. It is only as between the society and the nominee or heir or legal representative that the relationship of the society and its member is created and this relationship continues and subsists only till the estate is administered either by the person entitled to administer the same or by the Court or the rights of the heirs or persons entitled to the estate are decided in a Court of law. Thereafter the society will be bound to follow such decision.”

We are in agreement with the conclusion of the teamed Single Judge in the above decision that once there is a valid nomination, the society is obliged to deal with the nominee.

6. In the instant case, the society refused to deal with the nominee only on the ground that he was not a relative of the deceased member. This the society could not have done. Once there is a valid nomination, the society is obliged to deal with the nominee. It is no part of its business to ascertain the heir or legal representative of the deceased member. It is only if there is no nomination, that it is required to make enquiry in accordance with the procedure laid down in sub-rule (3) of Rule 25 of the Rules to find out the heir or legal representative of the deceased member for the purpose of transfer of his share or interest under sub-section (1) of section 30 of the Act.

7. In the premises, we do not find any merit in this appeal and it is, therefore, dismissed at the admission state itself.

8. Appeal dismissed.