Legal position of a nominee in cooperative society

A nominee holds the property asthough he is the beneficial owner until and unless a successful claim is made by one or more other persons. This is the position for all nominations such as bank accounts, insurance policy etc. Is there a time limit for claiming the property from the nominee?

From what I heard about nominees and beneficiaries,   

1. It is the nominee's duty to distribute the asset among rightful heirs (which may or may not include the nominee, depending on relationship with the deceased).  

2. Nominees are just proxies, so that the financial institute does not have to deal with finding the right beneficiaries and getting into legal disputes of the deceased family.  

I don't quite understand the term "cooperative society", but if the nominee can get away not distributing the asset among legal heirs for 6 years, (s)he can use it for her/him self?

It is not the responsibility of the nominee to find out who  the legal heir of the nominator is.  Most often the nominator nominates the person whom he wants to inherit the property. Finding out a true successor and transferring the property to him or her is not is not an easy job. In fact the institutions find it difficult to determine who is the true successor. If they transfer to the wrong person they can be sued. So a nominee has to act only if someone comes forward and makes claim.

A co-operative organisation is one which is formed according to co-operative principles. It will be formed by the consumers who want the goods or services sold/rendered by the institution. For instance a group of consumers who want accommodation for themselves come together, pool their resources, construct a building with flats and allot the flats among themselves. Co-operative Societies are controlled by the Co-operative Department of the Government.

Thank you Dr. Ramani.

Is this explanation of 6-year expiration specific to cooperative societies only or are they in general applicable to all nominee-driven assets (such as bank accounts, insurance policies, stocks/shares etc)?

And, after 6 years, is the nominee free to use it or should it be handed over to the government (say, for some fund, if money or for being auctioned, if a non-cash asset)? 

I have seen that there is a huge misconception about the rights of the nominee - it's a deep-rooted belief in the society that the nominee is the legal heir of the asset.  Apparently, the financial institutes (and even some legal personnel) reinforce that belief.

The 6 year limitation mentioned by Mr. Nitesh Ahuja applies to co-operative societies in Maharashtra only. Further the 6 year period is not for a legal heir to claim from the nominee. It is for the nominee to claim from the co-operative society. 

As for the legal heir to claim from the nominee, I do not know whether there is any specific limitation at all. One will have to look into the respective law or into the law of limitation.

When a person dies, the person himself is not available to give directions with regard to his estate. The estate will go to legal successors under law if the person dies intestate and according to will if the person had executed a will. It is risky and bothersome for a bank, insurance company or other bodies to transfer the assets to a claimant. Succession laws can be complicated and it would be desirable to have the claim established by an authority like a court of law. Determining who is the rightful claimant is often risky even when a will is available. The will has to be genuine in the first place. Further even a genuine will can be disputed. In most States in India it is not enough to produce a will before a Bank or a Society. One will have to obtain a probate on the will from competent authority. A Society or a Bank would like to avoid all these difficulties. Hence the provision for nomination has been made.

Even the nominee being only a trustee is an escape route to avoid the problems of establishing claims. For all practical purposes, in default, a nominee is the rightful owner of the property. He can deal with the property as though he is the absolute owner until and unless a valid claim is made. A nominee is not an executor.

In the case of assets like cash it can disappear in no time once it comes into one's possession. A nominee can sell a flat, the next day it comes into his possession.

"Learn the laws of succession and be the wisest of them all." That was what Prophet Mohammad was reported to have said.

Thank you very much, I appreciate your detailed clarification. 

To me, it sounds unreal that the nominee can sell a flat/property (or use up the cash) without the consent of the beneficiaries - but then laws can be weird and complicated.

I, for one, am an opponent of inheritance - if a person does not find his family trustworthy enough to gift them while (s)he was while alive, they're not worthy of it and it should all go to the general pool; people would start living and be friendlier to one another, rather than wait for someone to die and strategize how to grab the most of the estate (s)he leaves behind:)

please dont be confused about nominee case it is very clear that if any body is nominee of any bank and insurance and propery which is not ancestor he is fully right of successor of property.

I add further to what Avadhesh Paliwal says.

Notwithstanding the position of law, in most cases, the agency such as, say, an insurance company treats the nominee as though he is absolutely entitled for the amount. I do not know what is the position under law at present. Until some years back a nomination made by an unmarried person of, say, his mother for life insurance, provident fund etc. automatically lapsed when the person got married. 

A member of a co-operative housing society is expected to nominate only the person to whom he wanted the house to go. If he had more than one to inherit the property he can nominate all of them. The question of a nominee being a trustee comes only when the rights of the nominee are challenged.

Now that I know is not true - both you and Avadhesh Paliwal need to re-read the original post by Nitesh Ahuja.  

The financial institutes (banks, insurance etc) do nit "treat" the nominee as absolutely entitled for the money - they do not have that authority.  The only reason they are required (by law) to have a nominee is for them to be able to stay out of any inheritance headaches.  They are required to transfer that money into that of the nominees and their duties end there - they're not supposed to keep track of who does what with that money (though a lot of uninformed employees 'helpfully' suggest the nominee that it is all his/hers, while it just indicates their ignorance, like most people have about nominees).  

I know nothing about the cooperative societies, but the concept of nominee, I would expect, will not change in that case either.

...and a nominee, who is a trustee, may not be a beneficiary of the asset at all.  I can make an unrelated friend the nominee for my bank deposit and if I didn't mention this friend or this account in my will, this friend should hand that money (which the bank just needs to transfer to his account) over to my legal heirs (I think he can claim reasonable expenses incurred on him being a trustee)

The concept of Nomination has been made weird by certain judgement of High Courts and then the interpretatioin of those judgements by different lawyers. I say, when a property is self acquired by a couple with their hard earn money during their life time and they wish to transfer it to their chosen child, a son or a daughter, what right the 1. Society 2.Court 3.Lawyers got to interfere in their fundamental rights ?.Its their property and its their wish to nominate only 1 person> How anybody just interfere in their wish. Suppose the couple is having 2 sons. One is having good moral character and the other is Thief/Dacoit type and they donot wish to part anything owned by them to second son,THEIR WISH HAS GOT NO VALUE ??? I know, my lawyer friends will jump in : saying a property can be passed only through a WILL. My question to them :Why one should bear high charges of the lawyer, First to MAKE A WILL. second to register, Third to PROBATE (Again money to pay to court and their own fees). WHY WHY WHY. Money Money and Money for every small things to be done.Why their is no freedom or what about fundamental rights of that couple. The laws are purposely made in such a way, so as to pave the way for earning of lawyers. I termed them as "PARASITES". Refer "wikipedia" to learn the meaning of Parasites as I am sure, those LLBs are not Science students to understand the meaning of PARASITES.

Dear Sir/Madam,

Since your case is complicated case as such I require documents and same may be send to my email/PM (personal mail) for detailed legal advise.

With regards,

Legal Expert