In the case of a valid nomination, a Cooperative Society is liable to transfer the share or interest of a member in the name of the nominee #indianlaws

Where a member of a cooperative society nominates a person in consonance with the provisions of the Rules, on the death of such member, the cooperative society is mandated to transfer all the share or interest of such member in the name of the nominee. The rights of others on account of an inheritance or succession is a subservient right. Only if a member had not exercised the right of nomination under Section 79, then and then alone, the existing share or interest of the member would devolve by way of succession or inheritance.

Appellant’s father was admitted as a member of the Cooperative Housing Society. Out of his wedding there were two children – a daughter and a son. He recorded the name of his daughter in terms of the mandate contained in Section 79 of the West Bengal Cooperative Societies Act, 1983 as nominee in whose favour `the Cooperative Society’ would dispose of the share or interest of the member “on his death”.

Appellant after the death of her father communicated to the Cooperative Society for entering her name in place of the name of her father. Society passed unanimous resolution in making the transfer. Consequent upon the passing of the resolution, she has been paying maintenance and other charges to the Society. When the news of above transfer travelled to Appellants brother, an objection was filed before the Society Registrar to the effect that membership to the flat should be transferred to the name of his mother.

Thereafter several communications were exchanged amongst the parties whereupon, it was contended by mother of the Appellant that infact she is the nominee and not the appellant. The Deputy Registrar, Cooperative Societies accordingly declined to record the name of Appellant as the successor of the flat originally allotted to father of the Appellant.

The transfer of the flat in the name of the appellant was declined on the ground, that the appellant being a married daughter did not fall within the definition of term `family’ as contemplated under Section 79 of the 1983 Act [read with Rule 127 of the West Bengal Co-operative Societies Rules, 1987.

High Court while disposing of the writ filed against the above order, held that the Deputy Registrar of the Cooperative Societies was not justified to exclude the appellant being a daughter of the original member – her father, from the purview of the provisions of the 1983 Act, and the 1987 Rules framed thereunder.

The High Court had held that the married daughters were not excluded from the purview of Rule 127 of the 1987 Rules and accordingly had directed the Registrar of the Cooperative Societies to grant the necessary approval for transfer of the membership in the name of Appellant, as nominee of her father.

Division Bench in further appeal held that transfer can happen only after expressing consent of all the heirs. The above finding lead to the filing of appeal before the Apex Court.

The Court observed that as per the provisions concerned, where a member of a cooperative society nominates a person in consonance with the provisions of the Rules, on the death of such member, the cooperative society is mandated to transfer all the share or interest of such member in the name of the nominee. The rights of others on account of an inheritance or succession is a subservient right. Only if a member had not exercised the right of nomination under Section 79, then and then alone, the existing share or interest of the member would devolve by way of succession or inheritance.

Under Section 79 of the 1983 Act, Rule 127 of the 1987 Rules provides, that if a nomination has been made by a member under Section 79, the share or interest or the value of such share or interest standing in the name of the deceased member, would be transferred to the nominee.

Rule 127 postulates nomination only in favour of a person “belonging to his family”. It was held as not necessary to deal with the issue whether the Appellant being a married daughter of the original member could be treated as a member of the family, of the deceased member because even the courts below had held that she was a member of the family of the original member. This finding was never challenged.

Only in the absence of a nominee, the transfer of the share or interest of the erstwhile member, would be made on the basis of a claim supported by an order of probate, a letter of administration or a succession certificate (issued by a Court of competent jurisdiction).

[Indrani Wahi vs. Registrar of Coop. Societies & Ors.]

(SC, 10.03.2016) – Civil Appeal No. 4646 of 2006