Nomination in Co-op Society

By Legal Bureau

Nomination means an act of nominating. To nominate means to appoint a person who will look after the property of the person after his death. E.g: LIC/GIC,BANK etc.

A) WHAT IS PROCEDURE FOR NOMINATION?

A member can file nomination in –

• Form no. 15A In case of a single Nominee.

• Form no. 15B more nominee-Were percentage of each nominee is required to be mentioned.

The Form is to be filed and signed by the party in presence of two witnesses. And 3 copies are to be filed, One as Acknowledge receipt, Second to be received by the party after necessary entry is recorded in the society’s record and the original to be kept in society office.(entered within 7 days from meeting of managing committee).

B) WHAT IS THE FEES FOR RECORDING THE NOMINATION?

There is no charge for recording the nomination for the first time. However if the earlier nomination is revoked and new nomination is given to the society for each subsequent nomination Rs.5/- will be charged by the society.

C) WHEN SOCIETY TRANSFER PROPERTY IN NAME OF NOMINEE?

After death of person society can transfer property in name of nominee. Nominee will write to society along with copy of death-certificate and various forms (application, undertaking 500 sq. ft.), used for residence.

(i) Single nominee

(ii) More than one nominee (nominees will decide who will represent society).

Now after new model Bye-law, also allow Joint Ownership in society which was not permitted earlier. Earlier 1^st person was treated as member and other were as associate members.

D) If the nomination firm is not filed then

for transfer purposes society may insist for probate /succession certificate which involve lot of time & expenses.

i)  once application is made society can invite objection in one month (notice board  of society public notice in two newspapers ).expenses to be born by legal heirs.

ii) Indemnity bond for future claim if any.

iii) more than one legal heir then who will be 1

E) If nominee is not able to find share certificate then can apply to society for duplicate

Nominee takes these steps

a) first file application to society,

b) second give advertise in two newspapers,

c) Indemnity Bond then duplicate certificate can be issued and original will be treated as cancelled like railway ticket –if duplicate is issued –original is of no use.

WHAT IS THE DIFFERENCE BETWEEN WILL & NOMINATION?

A nomination is not a will.

When there is a nomination already filed with the Society, the normal impression is that the Nominee on the death of the Member, automatically becomes a member by filing an application .However, The Supreme Court of India has ruled in 1984 that “a Nominee is a mere Trustee with whom society can initially deal with after the death of a member. All the legal heirs of the deceased Member have a right of succession to the property of the deceased member and a Nominee cannot exclude the other legal heirs”.

Thus the nominee merely acts as the trustee. In some instances, the nominee and the beneficiary of the will is the same person. At all times, the provisions of the will prevail over the nomination. It is advisable to have the same person as the nominee and the beneficiary of the will, so as to prevent future disputes. A nomination, in order to be effective, need not be executed as a will but must be in accordance with the formalities required by the particular provision applicable.

WHETHER WILL ALSO TO BE EXECUTED WHEN NOMINATION IS GIVEN TO THE Society

Any transfer of interest of the deceased member in the Co-operative housing Society is governed by the section 30 of Maharashtra Co-operative Societies Act, 1960. Section 30(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 has been 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 o legal representative, as the case may be, is duly admitted as a member of the society:

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

From interpretation of the above section we understand the following thing.

It is very clear on the plain reading of the section that the intention of the section is  to provide for who has to deal with the society on the death of the member and not to create a new rule of secession .The purpose of the society has to deal and create interest in the nominee to the exclusion of those who n law will be entitled to the estate.

The purpose is to avoid confusion in case there are dispute between the heir and legal representative and to obviate the necessary of obtaining legal representation and to avoid uncertainties as to with whom the society should deal to get proper discharge.

Society has no power, except provisionally and for a limited purpose to determine the disputes about who is the heir, or legal representatives. It, therefore, follows that the provisions 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 for interregnum between the death and the full administration of the estate and not for the purpose of conferring any permanent right of such 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.

Even when a person is nominated or even when a person is recognized as a heir or a legal representative of the deceased member, the rights of the persons who are entitled to the estate or the interest of the deceased member by virtue of law governing succession are not lost and the nominee or the heir or legal representative recognized by the society, as the case may be, holds the share and interest of the deceased for the disposal of the same in accordance with the 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 subsist 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.(Gopal Vishnu Ghatnekar Vs. Madhukar Vishnu gatnekar).

The provisions of section 30 for transferring a share and interest into a nominee.

The heir or legal representative as will be decided by the society, is meant to provide for interregnum between the death and the full administration of the estate, and no for the purpose of conferring any permanent right on such a person to a property 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 a person is recognized as a heir or a legal representative of deceased member right of the person 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 recognized by the society, as the case may be, holds the share and interest of deceased for disposal of the same in accordance with law. (Gopal Vishnu Ghatnekar Vs. Madhukar Vishnu gatnekar).