Right of a nominee in coop society in maharashtra on oners d
Pradyot
(Querist) 12 March 2018
This query is : Resolved
is nominee has right to property in CHS Act in Maharashtra after the death of a owner based on following SC Judgment.on 10/03/2016
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No.4646 OF 2006
INDRANI WAHI .......APPELLANT
VERSUS
REGISTRAR OF COOP. SOCIETIES & ORS. .......RESPONDENTS WITH CIVIL APPEAL No.4930 OF 2006
Kishor Mehta
(Expert) 12 March 2018
The meaning of the order of the Hon. Supreme Court is taken in the wrong context and has not been properly understood. The Hon. Supreme Court has never stated that the nominee is an owner, but he holds the flat in trust for the legal heirs of the owner. The Society has to transfer the share certificate in the name of the nominee as per the Bye-laws of CHS, however it does not make him an absolute owner of the flat.
Guest
(Expert) 13 March 2018
Dear Shri Kishor Mehta,
As you stated that a nominee "holds the flat in trust for the legal heirs of the owner," can you please make a mention of any section of the Transfer of Property Act that may confirm your conviction about the nominee cannot be the rightful owner of the property after death of the owner of property? So far as I know the TPA as well as the Indian Trusts Act are totally silent on this aspect. Neither the property of an individual can be treated as a Trust, nor a nominee is appointed, as a Trustee under the provision of the Indian Trusts Act.
If the Supreme Court has never stated that the nominee is the owner, it has also not stated with the support of any section of law that the nominee cannot be treated as the owner of the property of the deceased owner and has necessarily to be treated as a Trustee for the legal heirs of the deceased and is compelled to transfer the property in the names of the legal heirs.
To be frank, I believe that convictions, perceptions, assumptions and presumptions cannot hold good, if not supported by any law of the land.
Guest
(Expert) 13 March 2018
@ Ms. Usha kapoor,
The opinion of both the experts are contradictory in nature. When you say, "I concur with experts" does that mean you concur on the opposite opinion of both the experts at a time?
Kishor Mehta
(Expert) 13 March 2018
With due respect to the experts and in all humbleness I write that in order to transfer an immovable property or claim ownership either of (1) Probate on a WILL : (2) Letters of Administration or (3) Heirship certificate, are required from a Court of Law. Simply filing a nomination form in a CHS DOES NOT make the nominee an owner of the flat. Nomination in a CHS is governed by the prevailing CHS Bye-laws, and these do not have the legal authority to transfer the legal ownership of a CHS flat to the nominee to the exclusion of the legal heirs of the original owner.
Guest
(Expert) 13 March 2018
Dear Shri Kishore Mehta,
I have not asked for the process to be adopted in the probate of will, letter of administration or the heirship certificate. I have simply asked about the relevant sections that describe a nominee as merely a trustee of legal heirs. Even if there is any law that prescribes that legal heirs would have the preference to acquire the property of deceased in preference to the nominee, you may like to quote even that provision.
It is not a question of byelaws, as these are subsidiary to the CHS Act. So far as I know, even under the provisions of the CHS Act, the claim of the legal heir comes only if there exists no nomination. Further, no provision of even the CHS Act states that a nominee should act merely as a trustee of the legal heirs. The Act very clearly lays down TRANSFER OF INTEREST of the deceased. Transfer of interest does not mean that the interest should further be transferred to any non eligible member, may he be a legal heir, whom the deceased had never preferred during his life time to become the beneficiary of his property. Otherwise, he would have written a will in favour of his legal heirs. A nomination is just like a will of the deceased for a particular property, where he wanted his property to be transferred to his preferred person appointed as his nominee and that is kept in the possession of the CHS to be implemented after the death of the owner. Just like a will, a nomination can also be changed any time during the life time of the owner. Neither a will can be be treated as a final legal document, nor a nomination and can be changed by the free will of the owner of the property.
You may better go through the provisions of the CHS Act. Please don't hesitate to correct me, if I am wrong with specific reference to the CHS Act or the TP Act.
I only know that there must be some legal base of the statement of an expert. So far law is concerned, there is no place for any presumption.
Kishor Mehta
(Expert) 13 March 2018
Please refer the judgment of Hon. Supreme Court referred to by the queriest, a relevant paragraph from the order is cited hereunder you may draw your own conclusions, I never liked to enter into unnecessary discussions or arguments,
" The Cooperative Society has no option whatsoever, except to transfer the membership in the name of the nominee, in consonance with Sections 79 and 80 of the 1983 Act (read with Rules 127 and 128 of the 1987 Rules). That, would have no relevance to the issue of title between the inheritors or successors to the property of the deceased. Insofar as the present controversy is concerned, we therefore hereby direct 'the Cooperative Society' to transfer the share or interest of the society in favour of the appellant - Indrani Wahi. It shall however, be open to the other members of the family (presently only the son of Biswa Ranjan Sengupta - Dhruba Jyoti Sengupta; we are informed that his mother - Parul Sengupta has died), to pursue his case of succession or inheritance, if he is so advised, in consonance with law."
Kishor Mehta
(Expert) 13 March 2018
Please refer the judgment of Hon. Supreme Court referred to by the queriest, a relevant paragraph from the order is cited hereunder you may draw your own conclusions, I never liked to enter into unnecessary discussions or arguments,
" The Cooperative Society has no option whatsoever, except to transfer the membership in the name of the nominee, in consonance with Sections 79 and 80 of the 1983 Act (read with Rules 127 and 128 of the 1987 Rules). That, would have no relevance to the issue of title between the inheritors or successors to the property of the deceased. Insofar as the present controversy is concerned, we therefore hereby direct 'the Cooperative Society' to transfer the share or interest of the society in favour of the appellant - Indrani Wahi. It shall however, be open to the other members of the family (presently only the son of Biswa Ranjan Sengupta - Dhruba Jyoti Sengupta; we are informed that his mother - Parul Sengupta has died), to pursue his case of succession or inheritance, if he is so advised, in consonance with law."
Kishor Mehta
(Expert) 13 March 2018
Please refer the judgment of Hon. Supreme Court referred to by the queriest, a relevant paragraph from the order is cited hereunder you may draw your own conclusions, I never liked to enter into unnecessary discussions or arguments,
" The Cooperative Society has no option whatsoever, except to transfer the membership in the name of the nominee, in consonance with Sections 79 and 80 of the 1983 Act (read with Rules 127 and 128 of the 1987 Rules). That, would have no relevance to the issue of title between the inheritors or successors to the property of the deceased. Insofar as the present controversy is concerned, we therefore hereby direct 'the Cooperative Society' to transfer the share or interest of the society in favour of the appellant - Indrani Wahi. It shall however, be open to the other members of the family (presently only the son of Biswa Ranjan Sengupta - Dhruba Jyoti Sengupta; we are informed that his mother - Parul Sengupta has died), to pursue his case of succession or inheritance, if he is so advised, in consonance with law."
Kishor Mehta
(Expert) 13 March 2018
I do not want to be abrupt nor do I intend any disrespect to any expert, however I do not want to be drawn into any further discussions or arguments and treat the matter as a closed chapter as far as I am concerned. Good Wishes to one and all.
Guest
(Expert) 13 March 2018
Dear Shri Kishore Mehta,
I did not ask for any judgment also, but specific section of any Act that describes a nominee to be merely a trustee of the legal heirs.
This is a sheer misunderstanding among most of the lawyers that judgments are always correct and perfect. The judgments are also prone to mistakes. Had there been the scope of the judgments to be 100% correct & perfect there would not have been any need for making provision in law for revisions and appeals against the judgments.
Please provide relevant section of any law of the land that prescribes a nominee as a trustee.
Guest
(Expert) 14 March 2018
It seems, Mr. Kishor Mehta has the dire need to undergo a refresher course in law, if unable to recollect some relevant section of an Act in support of his presumption about nomination.
Kishor Mehta
(Expert) 14 March 2018
Thank you for the advice, though unasked or uncalled for and not in good taste. Hereunder is some relevant information about the rights of a nominee which may help in clearing out the haze, and please no more personalities.
" What are the legal rights of a nominee?
Is Nomination a Myth?
By making a nomination in your assets would the assets devolve as mentioned in your Will or would it go to the person nominated absolutely? Increasing amount of misconceptions about the consequences of appointing a nominee are prevalent.
A nomination is made during the life of the holder / owner of the asset and comes into force after his death. The primary uncertainty appears to be whether after a nomination is made the nominee derives absolute right as the owner or the nominee is merely a trustee on behalf of others and acts in a fiduciary capacity for the legal heirs as per the succession law. A recent judgement passed by a learned single judge of the Hon�ble High Court at Bombay as discussed below has considered in detail the question as to whether by virtue of the nomination a person can claim exclusive rights to and ownership of the investments.
It is important to understand the effect of nomination under various laws.
The Black�s Law Dictionary, 8th edition, defines a �Nominee� as
��..2. A person designated to act in place of another, usu. in a very limited way
3. A party who holds bare legal title for the benefit of others or who receives and distributes funds for the benefit of others�
There are various Acts, namely Companies Act, 1956 as also Companies Act 2013, the Maharashtra Co-operative Housing Societies Act, 1960, Banking Regulation Act, 1949, Provident Funds Act, 1925, Insurance Act, 1938, Government Saving Banks Act, 1873, Depositories Act, 1996, Mutual Funds Regulations, 1996, etc., that have provisions pertaining to nomination. Though all these Acts have provisions for Nomination the language of the provisions are different in the Acts.
It is pertinent to note that the Companies Act, 1956 as also Companies Act, 2013, Banking Regulation Act, 1949, Provident Funds Act, 1925, Government Savings Banks Act, 1873, Depositories Act, 1996 have a �Notwithstanding provision� with respect to nomination which is also notwithstanding the Testamentary Succession. It appears that it is this notwithstanding provision which caused the confusion with respect to the rights of the Nominee. Thus, due to the above Notwithstanding provision (which is notwithstanding Testamentary Succession) it was interpreted that upon the death of the Nominator the Nominee in respect of his assets is vested with all the right of the Nominator and becomes the owner of the asset.
The above interpretation was tested by the Hon�ble Supreme Court and various High courts in the following cases:
Smt. Sarabati Devi and Anr. Vs. Smt. Usha Devi [1]
Ram Chander Talwar and Anr. Vs. Devender Kumar Talwar and Ors. [2]
Shri. Vishin N. Kanchandani and Anr. Vs. Vidya Lachmandas Khanchandani and Anr. [3]
Shipra Sengupta Vs. Mridul Sengupta and Ors [4]
Mr. Antonio Joao Fernandes Vs. The Assistant Provident Fund Commissioner and Ors. [5]
Shashikiran Ashok Parekh Vs. Rajesh Virendra Agrawal & Ors [6]
After hearing the respective parties, it appears that though the legislature and the draftsman have opted to use the language as Notwithstanding provision including the Testamentary succession, the Courts are of the view that the above Acts cannot override the succession law and succession can be governed only by Succession Law i.e. Testamentary or Intestate as the case may be and not by any other Act. Such an interpretation is a deviation from the normal rule for interpretation of a statute, wherein a Notwithstanding provision would prevail over other provisions. In the above cases while dealing with the provision of nomination the Courts have held that despite the provision being �Notwithstanding� the same would not overrule the law of Testamentary and Intestate succession. The Nominee does not become the owner of the asset and is merely a trustee who holds for and on behalf of the legal heirs of the Nominator.
However, the Hon�ble Bombay High Court, in the case of Harsha Nitin Kokate Vs The Saraswat Cooperative Bank Ltd. and Ors [7] (�Kokate�) dealing with nomination in the Companies Act, 1956 held that as the provision is �Notwithstanding any other provisions in law� and also vests the asset in the nominee, the nominee takes the asset to the exclusion of the other heirs and becomes the owner of the asset. In this decision the court did consider the decision of the Supreme Court in Sarbati Devi, however, the Courts attention was not drawn to several binding decisions of the Supreme Court and Bombay High Court.
Subsequently, in or around March 2015, the same issue again came up before the Hon�ble Bombay High Court in the case of Jayanand Jayant Salgaonkar and Ors. Vs. Jayashree Jayant Salgaonkar and Ors [8] wherein it was contended that the Kokate case was per incuriam as the same did not consider all the Supreme Court and High Court Judgments. Accordingly, the Hon�ble Bombay High Court, after considering all the cases and argument of both the sides came to the conclusion that the Judgment in the Kokate case is per incuriam and therefore bad law.
Thus, in view of the Judgment in case of Jayanand Jayant Salgaonkar, it appears that whatever be the language of the section in the Acts relating to Nominee, a nominee is a mere trustee and holds the assets for and on behalf of the legal heirs. On death of the Nominator, the Company will confer the rights on the nominee but the same will not make the nominee the owner of the asset but only a trustee who holds the asset for and on behalf of the legal heirs of the deceased.
Thus, while carrying out succession planning, it is important to note that Nomination may not really serve the purpose as the Nominee will only act as a Trustee for and on behalf of the legal heirs of the Nominator.Nomination does not really serve the purpose for the Nominator in fact it helps the organisation (i.e. Bank, Mutual Fund, Insurance, etc.) as in case a Nomination has been effected, the organisation merely confers the right on the Nominee so that does not have to hunt / search for the legal heirs of the deceased. The assets of the Nominator (irrespective of Nomination) will devolve upon the beneficiaries in case of a Will and upon the legal heirs in the absence of a Will as per the respective laws of succession.
Therefore, it appears that the compliance of the procedure of nomination is merely a myth as it does not substitute a Will and merely appointing a nominee will not suffice. Further, it will not be out of place to point out that there appears to be a gap / disconnect between the legislature, draftsman and final interpretation by the Courts of the provisions of the various Acts. Needless to state the interpretation of the Courts would prevail and Nominee is considered only as a Trustee and not the owner.
� By Nirav Jani (Senior Associate & Team Leader) & Ritu Shetty ( Associate), Hariani & Co
Editor: Trupti Daphtary
[1] 1984 AIR SC 346
[2] (2010)10 SCC 671
[3] (2000)6SCC724
[4] (2009)10SCC680
[5] 2010(3)ALLMR599
[6] in the high court of Bombay Notice of Motion No. 2024 of 2011 in Suit No. 1267 of 2011
[7] 2010(112)BOMLR2014
[8] Notice of Motion No. 822 of 2014 in Suit No. 503 of 2014 and Testamentary Petition No. 457 of 2014 Decided On: 31.03.2015
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Guest
(Expert) 14 March 2018
Wasteful exercise in making copy paste of an article from some other website, which can only make the querist more confused.
No section of law is quoted to prove the nominee as merely a trustee of the legal heirs of the deceased. I did not ask for any article or case laws. Particularly in the case of nominations, case laws represent failure of the respective lawyers to present the case in right spirit.
Case laws or the articles can't be the substitute of main laws.
Guest
(Expert) 15 March 2018
Having failed in quoting relevant section of law, it seems, Mr. Mehta is also one among the several lawyers, who do not apply their own minds while relying merely on judgments in discard of the provisions of the main Acts of Law.
