What a nominee should do to become a member of a society

By Legal Bureau

What a nominee should do to become a member of a society.

How is a Nomination name in a Housing Co-operative Society ? If the Society has adopted the Old Bye-laws , It states that a member may by writing under his or her hand and deposited with the Society during his or her life time or by a Statement made in any books kept for the same, nominee any person to whom under Section 30 of the Maharashtra Co-operative Society’s Act, the interest of the member is specified and on his or her death such shares shall be transferred to the name of the nominee .
It is to be noted that a Nomination made a member can be revoked or varied , by the member any number of times . The Society has no right to ask the member as to why a Nomination is being changed by him or her. In this connection some of the societies become adamant and do not change the Nomination pointing out Section 29(2) of the Maharashtra Co-operative Society’s Act simply states that the member shall not transfer any share held by him unless he has held it for a period of one year. Now this is not the transfer of shares or share certificates . This is merely an intimation given to the society , that incase of his or he demise the share certificate should be transferred in the name of the nominee.
Thus a member of the Society has very right to change the share certificate, as many times as he wants during his lifetime.
Now what action should the society take when the nominee applies for the membership of the Society ? First of all , it is absolutely essential for the Society , to call upon such a nominee to furnish a certificate. This is absolutely essential . Thereafter nominee should be called upon to produce the original share certificate .
Incase the nominee has lost the original share certificate , or the said share certificate, or the said share certificate has been misplaced, then the nominee should apply to the Society for issuing a duplicate share certificate by following the formalities for the same .
Thereafter the Society should call upon the nominee to pay up the outstanding dues of the deceased member A nominee cannot raise any dispute about the same, even if there was a dispute about the payment of the said amount between the deceased member and the society . The nominee is bound to pay up the entire amount as due and demanded by the Society , before he is admitted as the member of the Society.
Thereafter the nominee should pay the entrance fees of Rs.10 to the society and then make an application for the membership of the Society . At this point of time the Society should call upon the nominee to give a declaration in the prescribed Form No-24, to the effect that he does not hold any vacant land or a land with a building in any Urban Agglomeration specified under the Urban Land Ceiling and Regulation Act 197, which exceeds 500 sq. mtrs.
By following the above named procedure a nominee can be admitted as the member of the Society incase of the demise of the original member .

Question & Answers

I had taken the premises on Care Taken basis from a tenant for three years , who was my friend as the tenant had gone out of India ,due to his service . The tenant is working in a Bank . I have paid the rent for the last 2 ½ years by cash which has been accepted by the Rent Collector tell me that he can transfer the rent receipt in my name if I pay him a certain amount of money . Is it worthwhile doing so ? Can the tenant who is at present out of India after coming to Bombay after six months once again claim tenancy rights ? I have no where to go and reside . I really do not know what to do ? I therefore seek your advise in the matter ? Kindly advise .

Baffled care taker-Bandra , How can you think of letting down your friend , who has trusted you and given his premises to you of faith as care taker to look after the same during his temporary absence from Bombay . From your letter it is clear that you are merely paying rent of the premises and the tenant is not making any profit out of it . It appears tome that the Rent Collector is taking you for a ride. He has no right to transfer the tenancy receipt in your name unless the tenancy rights are surrendered by the main tenant . So do not fall into this trap and do not think of deceiving your friend who has trusted you to keep his premises intact by appointing you as the Care taker. After your friend returns to Bombay if he does not wish to keep you with him in the said premises , you would have necessarily to look out for some other premises .

I am a member of a Housing Co-operation Society . I am earning a very modest salary . Every now and then the Society is demanding monies for the repairs of the building . I simply cannot afford it. Is it true that the Society can demand monies for the repairs to the building only once in three years ? Is it true that if a member does not pay monies for the
repairs as per the resolution passed by the Special General Meeting then the interest at the rate of 21% cannot be recovered from him ? Is it true that only those defaulters who not pay maintenance charges have to pay interest at the rate of 21%since our society had adopted the Model Bye-laws ? Could you kindly enlighten me in this matter ?
L.U. Nayak .
Mr. Nayak , you must remember that now you are a member of a Housing Co operative Society and such you are a co-owner of the building . If the building requires , it is your duty to pay your share of the same . It is not true at all that a society has a right to demand monies for the repairs of the building only once in three years . It is also not true that if a member does not pay the repair charges then the Society cannot recover 21% interest on the amount not paid for the repair charges . Since your Society has adopted the Model Bye-laws , it can recover 21% interest on the maintenance charges if not paid as well as contribution for repairs .
I have given my ownership flat on Leave and Licence basis for residential purposes merely for 11 months . The Licence period would be over next month . Now the Licensee has started writing to me letters after letters that he does not get adequate water in the building and infact has to buy water from outside . He has also complained about the resolution of the Society to keep the lift closed at certain hours . He has threatened me that I would have to pay him adequate compensation for lack of these facilities if I do not renew the Leave and Licence Agreement on the same terms and conditions after the licence period is over? I am perplexed and even do not get proper sleep at night . I want my flat back under any circumstances, as I do not wish to renew the Leave and Licence agreement . what do I do ?
Frightened Licenser
On the face of it , it appears to me that your Licensee is acting smart , in order to renew the Leave and Licence agreement for further period on the same terms and conditions. You are not responsible if due to certain reasons or due to less pressure your licensee does not get adequate water. You are also not responsible for the payment to your Licensee, if he has to buy water from outside . The Society where you are a member have passed a resolution to keep the lift closed for certain hours, inorder to keep it in proper condition and your Licensee is bound to respect the resolution of the Society . He has no right to complain about the same. Since you have given your flat on Leave and License basis for residential purposes if your Licensee were not quiet after the licence period is over , you would have to approach the competent Authority who would order your Licensee to pay double the licensee to pay double evicted . Moreover you would get a speedy disposal of the application . So do not pass sleepless nights as you would certainly get back your flat.

Issue of duplicate certificate in housing societies

By Legal Bureau

Issue of duplicate certificate
If any application is received by the managing committee for issue of duplicate share certificate the managing committee has to insist on the member to give undertaking.
The co-operative housing societies has to follow the procedure laid down in the Act, Rules or bye-law and not to go according to the provisions of Companies Act, while issuing duplicate share certificate.
Undertaking should be given by a member of co-op. Housing society on five Rupees stamp paper.

1. I, Shri./Smt………the member of the ………..Co.op.Housing Society Ltd. at………hereby solemnly declare that I had purchased FIVE SHARES of Rs. FIFTY each of the above mentioned society bearing Nos….to……… I hereby further declare that the share certificate No………dated………for the above said Five Shares issued to me by the said society has been lost, mislaid or is not traceable.
2. I hereby further state that I have not transferred the said share certificate to any other person/Persons nor created any charge or mortgage on it in favour of any Bank, Financing Agency, Employer or any other person or persons.
3. I hereby further solemnly declare and undertake to agree to indemnity or keep the society indemnified against any risk as to damages, costs and consequences arising out of any legal proceedings started against me as a result of my unlawful dealing with the said share certificate, in which the society would be involved.
4. I hereby undertake to surrender the original share certificate to the society, if traced subsequently.

Place :
Date : Signature of the Member
Name of the witnesses with their address
1. Signature of witness
2. Signature of witness

Dispute amongst legal heirs in housing societies

By Legal Bureau

Ques: What should the office bearers do incase there is a dispute amongst the legal heirs of the decrease member?

Ans: If there is a dispute amongst legal heirs of the deceased member then the Society should tell the claimants to produce a Succession Certificate/Letter of administration from the Competent Court. Till the time the Succession Certificate/Letter of Administration is not obtained the Society may not transfer the flat.


Ques: What is the dispute resolving machinery under the Maharashtra Co-operative Societies Act? Which type of dispute have to be referred to the registrar? Which type of dispute have to be referred to the Co-operative Courts?

Ans: Co-operative movement was initially sponsored by the state. Apart from the public sector and the private sector, Co-operative sector has now come into existence. The Co-operative sector has the benefit of both the public sector as well as private sector. One of the principles distinguishing the Co-operative sector from the private sector is that the control of Co-operative enterprises is not in the hands of the capitalist who corner the share capital. The Co-operative sector is based on the principal of “one man one vote”. The beauty of the dispute resolving machinery is that even a single member who is aggrieved can approach the court/registrar for redressal of his grievances. With the passage of time a need was felt to provide a separate chapter on settlement of disputes and accordingly chapter nine consisting of Section 91 to Section 101 has been incorporated in the Maharashtra Co-operative Societies Act, 1960. Some type of dispute have to be referred to the registrar and some types of disputes have to be referred to the Co-operative Court. The Registrar of Co-operative society is a quasi-judicial authority. The Registrar of Co-operative society has the power as regards refusal of membership by the society to a prospective member. (Section 22 and 23). If the party is aggrieved by the decision of the Registrar or its subordinate then a provision exists for revision application under section 145 of the Act before higher authority i.e. joint Registrar of Co-operative Societies and even before the State Government under the said Section, 154. Finally the remedy under Writ Petition under Article 226 or 227 of the Constitution of India is also available to the aggrieved person in extra ordinary circumstances. Even at the time of expulsion, if passed with ¾ majority under Section 35 of the Act has to be submitted to the registrar and only after his approval can the society take steps to expel the member. The Registrar has power under Section 77A to appoint a new committee or administrator when there is a failure to elect member to constitute committee. Under Section 78 the Registrar has power to remove the managing committee or the members of the managing committee. The Registrar under Section 79 has powers to enforce performance of obligation. Under Section 80 Registrar has power to seize records of the society. However, the Registrar or the person authorized by him must apply to the executive Magistrate within whose jurisdiction the society is functioning for seizing and taking possession of the records and property of the society. Under Section 81, the Registrar has powers to appoint an Authority to audit the accounts of the Society. Under Section 82, the Registrar has power to direct the society to rectify the defects in the accounts. The Registrar on receipt of complaint or on his own can initiate an enquiry under Section 83. The Registrar can also initiate action under Section 89 to summon and enforce an attendance of any person and examine him on oath or affirmation or by affidavit or to compel the production of any document in the same manner, as is provided in the case of Civil Court under the court of Civil procedure 1908. The Registrar has power to inspect the working of the society under Section 89A.
Ques: For which all items should the member approach the Registrar of Co-operative Society? For which type of complaints should the member approach the Co-operative Court?

Ans: It is observed that many times people approach a different authority for redressal of their complaint. For normal day to day complaints such as- (a) Charging of compound interest, not issuing of passbook to members, not admitting the Purchaser as member of the society, recovery of the dues etc., the members of the public should approach the Registrar of Co-operative Societies. The Registrar has power under Section 77A of the Maharashtra Co-operative Societies Act to appoint members of committee, new committee or administrator when there is failure to elect members to constitute or whether committee does not enter upon the office. Under Section 78 The Registrar has power of removal of committee or member thereof. Under Section 79 the Registrar of powers to enforce performance of obligations. The member can approach the Co-operative Court under Section 91 if there are disputes between a member and the outgoing/incoming member. More powers are vested in the Co-operative courts. It is normally observed that as Co-operative courts take a long time, there is a tendency amongst the members to approach the Registrar of Co-operative Societies even in matters in which the Registrar does not have the jurisdiction. Section 91 of the Co-operative Court relates to dispute between a member of the society and another member of society, or the dispute between the employees of the society and the society or its members are govern under Section 91 of the Co-operative Societies Act. The value of flats is in lakhs if not in crores of rupees. Thus the jurisdiction of Co-operative court is unlimited and is almost on par with those jurisdiction of High Court as far as pecuniary jurisdiction is concerned. If a member is not paying the dues then also the society can approach the Co-operative court for recovery of dues. Election dispute challenging the Managing Committee of any Co-operative society have also be referred to the Co-operative Court under Section of the Act. It is observed that though the Co-operative Courts have jurisdiction to try and entertain the disputes amongst members pertaining to property matters of lakhs of rupees then also the infrastructure Section 23 (with regards to transfer of flats) or Section 35 (expulsion of members) or Section 77A (appointment of members of committee, new committee or appointment of administrator), Section 78 (power of removal of committee or member thereof) or under Section 81 audit, Section 83 enquiry by Registrar then in such cases an appeal is provided under Section 152 of the Co-operative Act before the Divisional Joint Registrar in Charge of the appeals.

Admitting a new member in a society and the societies rights

By Legal Bureau

Minno J. Pallia a Chairman of a Housing Cooperative Society has written whether a Society has a right to ask a member to settle all dues before he can be given permission to sell his ownership flat. Can a member say that a certain bill is in dispute and be matter decided by the court of law. Now Mr. Pallia wants to know the right of the Society not to grant a no objection Certificate, to a member to sell his flat.
Section 23 of the Maharashtra Cooperative Society has to be followed for admittance of a new member in a society. Under this section, it is indicated that the Society cannot disregard the application from as applicant without a true and good reason. If a Society does so, an appeal can be filed with the Registrar. The Registrar would give his verdict within 15 days of receiving such an application from the member, which will have to be accepted by the society.
Many questions come up in this regard. Can a Society maintain that it will not transfer the Share Certificate on the name of a new member provided all the dues are paid by the old member of the society ? Certainly yes. One thing is clear that in case a member applies to sell his flat and request transfer of the Share Certificate to the name of the purchaser, he must settle all the dues of the society. Even if such a payment is debatable or disputable he cannot make part payment and has to settle his accounts in full before the Society could give his permission to transfer the Share Certificate.
Now many Societies pass a resolution in their Managing Committee, or Annual General Meeting or a Special General meeting, that if a member wants to sell his flat then it should be sold only to relative of the member or their person indicating by the member, if the relatives of the member do not wish to buy the flat, then only it can be sold to an outsider. It is clear that such kind of a resolution by any Society is absolutely illegal and cannot be implemented. A member has full right to sell his flat to anybody and a Society cannot prevent him from selling the flats to an outsider.
Now lets find out the circumstances under which a Housing Cooperative Society can stop the admittance of a new member. Now suppose if an application to buy the flat has been made by lady who is the sole person in the family and the Society comes to know that she has a bad character and may start some immoral business in the building, the Society can stop the admittance of such a member under such circumstances. However, it should be remembered that the Society cannot stop admittance of a member only on the basis of doubt.
If suppose the member buying the flat has a large family and the Society feels that admittance of such a member would mean excessive use of water and lift facilities, can it stop the admittance on this pretext ? Certainly not. That a member has a large family, cannot be a reason enough to restrict the membership. This cannot be held as a good and fair reason.
In addition, if a Society is informed that the purchaser of that flat is a smuggler and has a police record, then can a society stop admittance of a new member ? The reason is that the Society has a solid evidence, in order to reject the application of the purchaser of the flat and the transfer of the Share Certificate.
When the Society receives application from a member, can it interview the member to find details according to law ? Yes. Infact, when a new member is being admitted, he must be called and an interview should be taken. The new member should be strictly told that he will have to follow the byelaws and resolutions of the Society and he will have to pay the maintenance charges of the society regularly.
Now, Supreme Court judgement on giving rights to the societies for restricting admission of outsider on religion and community basis, has given society right to deny admission to outsiders. The society must pass its intention in the AGM with majority.

Transfer formalities in Housing Societies in Maharashtra

By Vimal Punmiya FCA, LLB.

On entering into an Agreement for the sale of purchase of Flat/shop etc. before execution of such sale deed the Transferor is required to prove to the Transferee that he is the true member of the society in which the said Flat or shop is situated . As a proof of his true membership the Transferor is required to produce before the Transferee the following documents :
I ) Original and copy of the Purchase Deed with society/with Builders.
II ) Original and a copy of Share Certificate.
Original and a copy of latest society’s bill,
Original and a copy of Best Bill,
Original sinking fund certificate if any,
Pass Book issued by the society,

Only after going through these records and on satisfaction of the true membership of the Transferor. The transferee agrees to sign the form No. 20-B to be filed before the society for its No Objection to admit the Transferee as its member.
On obtaining no objection certificate from the society and if the apparent consideration of sale deed exceeds Rs. 75,00,000/- ( For the property situated in greater Bombay ) both the parties are required to sign and file form 37-I in duplicate before the Appropriate Authority of the Income Tax Department along with a copy of the Agreement for sale signed by both the parties. The Appropriate Authority takes minimum 3 months ( excluding the month in which form No.37-I is filed ) time to pass the relevant order, wherein either it mentions regarding Acquisition of the Flat/shop or grant of No objection. In case of acquisition of the property the Appropriate Authority acts as the Transferee and pays the consideration mentioned in the Agreement after deducting a certain percentage as per the provision of sec. 269 UA (2) to the Transferor and the sale deed comes to an end. If the Appropriate Authority has granted its no objection to the sale of the Flat/Shop then and in such event both the parties proceed further and execute other relevant documents for the effective transfer and vacant and peaceful possession of the said Flat/shop.
The following are the various documents required to be signed by both the parties at the time of vacant possession of flat. The documents such as :

a Agreement of sale ( to be properly stamped ).
B Transfer Form.
Letter to the society requesting them to transfer share certificate in the name of purchaser and incidental to that use and occupation of Flat/shop etc.

The Transferor is required to indemnify the Transferee against any claim made by any third person by signing the Indemnity Bond. It is also advisable to take a special power of Attorney in favour of Transferee and also to send letters to the society for issue of share certificate in the name of Transferee and to the B.E.S.T. for transferor further is required to sign a declaration in support of his possession and also acknowledge the receipt of the consideration amount by signing the receipt. As per the urban land ( Ceiling and Regulation Act ) 1976 the Transferor is required to give declaration in the form 24 that he does not hold any vacant land the area of which together with the area of the proposed flat to be transferred does not exceed 500 sq.mtrs. similar declaration is required to be given by the Transferee too in Form No.25.

The Transferee is also required to send letter to the society and undertake to pay stamp duty and execute a document and sign the same. He is also further required to make an application to the society to admit as a member of the society by signing application for membership and filing the same with the society.

Further it is to be noted that all the original documents relating to the transfer of title, rights and interest in the society such as

Original No Objection Certificate from society,
Original Share Certificate.
Original No Dues Certificate from society.
Original (Latest) society bill and Receipts.
Original ( Latest ) BEST Bill.
Original Purchase Agreement.
Pass Book issued by the society.
All other original/documents of title to the Flat.
Keys of the said Flat/Shop to be obtained from transferor.

Thus one the above mentioned formalities are completed and vacant and peaceful possession of the Flat/shop is handed over to the Transferee the sale deed is said to be finalised and completed.

The members, desiring to exchange their flats, shall make a joint application to the secretary of the society, containing the following details :
The name of the members concerned.
The distinctive numbers of their respective shares and No. of their Flats.
The carpet areas ( in sq.metres ) of their respective flats.
The building number/numbers or name/name of the building/buildings in which the respective flats are situated.
The reasons for exchange of Flats.



Rules 24 of the M.C.S. Rules, 1961

No Transfer of shares shall be effective unless :

( A ) It is made in accordance with the provisions of the bye-law.
( B ) A clear fifteen day’s notice in writing is given to the society indicating therein the name of the proposed transferee, his consent, his application for membership, where necessary and the value proposed to be paid by the Transferee.
( C ) All liabilities of the Transferor due to the society are discharged ; and
( D ) The transfer is registered in the books of the society.

Any charge in favour of the society on the share so transferred will continue unless discharged otherwise.

Bye-Law No.19 :
’19 (1) Notwithstanding anything contained in any other bye-law, no member shall be permitted to transfer any shares held by him/or his interest in the property of the society unless he had held such shares or interest in the property for a period of not less than one year from the date of his admission to the membership of the society. Application for transfer shall be in the form set out in schedule II appended to the Bye-law.
Registration of Transfer :
Until the transfer of shares is registered, no right shall be acquired against the society by the Transferee, nor shall any claim of the society upon the Transferor be affected.

Bye Law No.20 :

“ 20 ( 1 ) The society shall issue within six months of allotment, a share certificate showing the number of member’s register, the number of the shares and the holder’s anme in full under the signature of officers authorised in this behalf and duly sealed with the society seal.

The Committee shall keep a share register in which there shall be entered the name, occupation and address of the member, the date of admission and the number of shares allotted or transferred from another member’ holding. The Register shall also show the number of shares transferred, repaid, forfeited or cancelled and the date of such repayments, forfeiture or cancellation.
Up on each transfer of any shares there shall be paid to the society such fee not exceeding Rs.50/- as the committee may fix”.

A part from transfer of share and interest of a member in the capital/property contemplated under section 29 of the M.C.S. Act 1960, Rule 24 of the MCS Rule 1961 and the Bye-Laws No.19 and 20 of the model bye-laws for co-op, housing societies, transfer of shares and interest of a deceased member in the capital/property of a society to his nominee or heir has to be considered by the society. Section 30 of the M.C.S. Act 1960, the Rule 25 of the M.C.S. Rule , 1961 and the bye-laws No.15 and 15 deal with transfer of shares and interest of a deceased member in the capital/property of the society. The said Rule also deals with the procedure to be followed for the transfer of shares and interest of a deceased member in the capital/property of the society if the deceased member had not made any nomination. The said provisions are reproduced hereafter.

(a) A member, desiring to transfer his shares and interest in the capital/property of the society, shall give 15 days notice of his intention to do so to the secretary of the society in the prescribed form, along with the consent of the proposed transferee in the prescribed form.

b On receipt of such notice, the secretary of the society shall place the same before the meeting of the committee, held next after the receipt of the notice, pointing out whether the member is prime-facie eligible to transfer his shares and interest in the capital/property of the society, in view of the provisions of section 29 (2) (1) of the Act.

C In the event of ineligibility of the member to transfer his shares and interest in the capital/property of the society, the committee shall direct the secretary of the society to inform the member accordingly within 3 days of the decision of the committee.
D If the committee is satisfied that the member is prima facie eligible to transfer his/her shares and interest in the capital/property of the society, the committee shall direct the secretary of the society to inform the member within 3 days of the decision of the committee to make the compliance as under :


Can Society transfer the Share Certificate in the name of the nominee

By Advocate Sanjeev Kanchan

I would like to deal with the above query in detail, since similar problems are faced in many co-operative societies.
For instance, a person has been nominated as a legal nominee by the deceased member in the records of a co-operative housing society. The said deceased husband died in Bombay in 1999, leaving behind him his wife and his two adult sons. The sons have filed their objection with the society and requested them not to transfer the share certificate in the name of their mother, although she is the nominee of the flat as per the records of the society.
Section 30 of the Maharashtra Co-operative Societies Act 1960 deals with the provision of transfer of interest which is as under :-
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 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 duly admitted as a member of the Society.
All transfer and payments duly made by a society in accordance with the provisions of Section 30(4) shall be valid and effectual against any demand made upon the society by any other person.
Rule 25, 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 document, such document shall be deposited with the society during the members life-time and, where the nomination is made by statement it shall be signed by the member and attested by one witness.

Rule 25 Section 3
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.
After taking into consideration the claim or objections received in reply to the notice or otherwise, and after making such inquiries as 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 Representatives of the deceased member and proceed to take action under Section 30.
However, what is important is the section and not the rules and bye- laws in as much as the rules and bye laws cannot provide everything contrary to the section. It is very clear on the plain reading of the section that the intention and purpose of Section 30 of the Maharashtra Co-operative Societies Act is to provide for who has to deal with the society on the death of a member and not to create a new rule of succession. The purpose of the nomination to make certain that the person with whom the society has to deal on the death of a member. The society has to deal with the legal nominee who has been nominated by the deceased member on the records of the society. The purpose of this section is to avoid confusion in case there are dispute between the heirs and legal representatives and to avoid uncertainties as to with whom the society should deal to get proper discharge. The society is not concerned with any kinds of dispute raised by any person whosoever, so for the transfer of membership of deceased member to his nominee is concerned. Nevertheless all the persons entitled to the estate of the deceased as per succession law applicable to them do not lose their right to the same, even after transfer of the shares in the name of the deceased member.

It is pertinent to note that transfer of any property including share of the society is not governed by the ordinary law but by the provisions of the Maharashtra Co-operative Societies Act, and the rules and bye-laws framed by the Society. However, the right of society to admit a person of its choice as a member cannot be exercised arbitrarily and so as to deprive person of his/her right to the shares or property of a deceased member. The law does not give a right to the society to refuse membership to a person who is entitled to become a member. To repeat, a society has the right to admit a nominee of a deceased member of an heir or legal representative of deceased member as chosen by the society as a member. A member of the society will have to obtain relief in the normal court against such person and have his rights ascertained and declared, and thereafter apply to the society on the basis of the Court Judgement to make him a member of the society.
Whether nomination is will
From the requirements for making a nomination, one may feel that nomination is Will. But is reality the Nomination is not a Will. Will as nomination filed in accordance with the provisions of rule and bye laws in the prescribed form and general intention (which is must in the Will) is not to provide for succession after death of a member.
Status of a Nominee
The provisions of nomination is found in various Acts, for example, L.I.C., Provident Fund, Gratuity, but the nomination does not create any title or interest in favour of the nominee. In a recent case under the Insurance Act, the Supreme Court in SMT SARBATI DEVI versus SMT USHA DEVI reported in A.I.R. 1984 SC, 346 held that it does not confer any beneficial interest in the nominee and the other heirs can claim the amount in accordance with the law of succession governing them. Therefore as a principal as can very well say that nominee is mere trustee with whom society can initially or prima facie deal with and after the death of a member, all the heirs of the deceased member will have a right of succession to the property, and the nominee cannot exclude other heirs. In other words the provisions of ordinary succession law will not be affected by nomination.
In view of aforesaid facts and the judgement, it is simply clear that the society will have to transfer the shares in the name of the nominee, irrespective of any objection being raised by any other person unless and until the aid objections obtain relief in the normal court against the nominee and society. In my opinion the society has no alternative except to transfer the shares in the name of the nominee.

Landmark Judgement on Nomination in a Housing Society

By Legal Bureau

Nomination in a Co-operative Housing Society

A Nominee when he is not the sole legal heir, is a Trustee, for the legal heirs of the deceased. The practice of providing for Nomination is to ensure that the institutions (Bank, Insurance or a Co-operative Society) know from the Nomination as to whom to hand over the Property of the deceased on the death of the Member etc. It is, therefore, a useful legal device to have a Nomination to secure continuity of Membership on the Records of a Society.
This does not mean that the Nominee becomes the Owner in Title of that flat in a Society. The property of the deceased Member must ultimately go to his legal heirs, according to the law of Succession. However, the task of ascertaining the legal heirs of a particular person who dies is a complicated one, in most cases. Therefore, even if a Bank or a Society takes a decision in their normal routine and procedure, that a particular person is their heir of the deceased, such an opinion cannot be considered to be legally binding on anyone, including the family of the deceased. The reason is that such questions can only be decided conclusively by a Court of Law.
Therefore, on the death of a Member, it is the duty of the Society to transfer the right, title and interest of the deceased Member to the Nominee under a valid Nomination. This is made clear by a Ruling given by the Division Bench of Bombay High Court in Bombay Cases Reporter, 1998, Vol. 4, page 506. This issue is treated fully. In this case, a Member after filing a Nomination in favour of his wife revoked the Nomination and submitted a fresh Nomination in favour of someone who was not his relative. The Society, therefore, refused to accept this second Nomination. The Deputy Registrar and the Divisional Joint Registrar agreed with this second Nomination. The Deputy Registrar and the Divisional Joint Registrar agreed with this view of the Society but the Hon’ble Minister of State for Co-operation over-ruled this Ruling in a Revision Application. This was also challenged, and a judge of the Bombay High Court approved and confirmed the Ruling of the Minister of State. This was challenged in Appeal. The Division Bench, therefore, held that,
“Once there is a valid Nomination, the Society is obliged to deal with the Nomination. It is no part of its business to ascertain the heir or the legal Representative of the deceased Member. It only if there is no Nomination, that it is required to make inquiry in accordance with the procedure laid down in Sub-Rules 3 of Rule 25 of the Rules to find out. The reason for Nomination have been well summarised in 1982, Maharashtra Law Journal, pg. 65, by the Bombay High Court as under :
“It is very clear on a plain reading of Section 30 of the M.C.S. Act, that the intention of the Section is to provide for who has to deal with the Society on the death of a Member, and not to create a new Rule of Succession. The purpose of Nomination is to make certain, a person with whom the Society has to deal, and not create interest in the Nominee to the exclusion of those who in law, will b entitled to the Estate. The provisions for transferring the Share and Interest to a Nominee or to the heir or legal representative to be decided by the Society, is only meant to provide for interrugnum 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 te property forming part of the Estate of the deceased. The idea of having this Section is to provide for a proper discharging to the Society, without involving the Society into the unnecessary litigation, which may take place as a result of dispute between the heirs or uncertainity as to who are the legal heirs or representatives.”
Therefore, the Society has to act upon a valid Nomination whether the Nominee is a relative, a friend or some unknown Party. The responsibility of the Society is over thereafter. However, a Nominee has the right to deal with the flat as he deems fit. He can sell it also, but he should know his responsibilities in acting in such manner. This is a matter to be settled between the Nominee and the legal heirs. If there is a Will wherein equal shares are given to the mother and the children, the mother is a Trustee for the children who are the beneficiaries. Simply because the name of the mother only is shown in the Share Certificate, she does not become the exclusive owner of the property since she is also a Trustee to look after the welfare of the children. But, as far as the Society is concerned, she is the only one with whom the society. The obligations between a mother and her children, as stated above of Trustee and beneficiaries, is an internal matter of the family, and the Society is not concerned with that. This mother has also a right to nominate someone of her choice for the flat, but that Nomination will be subject to the rights of the legal heirs (children).
Therefore, a Nominee does not become full-fledged legal owner of the flat disregarding the rights of the legal heirs of the deceased Member. The misunderstanding that a Nominee is the sole owner of the flat and the other family members are at the mercy of the Nominee is to be removed for all practical purposes. There may be as many Nominations one by one, but the last one officially recorded by a Society is to be acted upon.

Can a co-operative Housing Society refuse to admit a person as a member belonging to other religion/caste/community?

By Bankimchandra Khona, solicitor.

  1. There are few Co-operative societies wherein membership to the

Co-operative  Society is restricted to particular community or religion                       or caste. At the time of admitting the member, declarations and undertakings are taken from such intending member that the intending member belongs to particular religion cast or creed and that he will not permit or allow person of other religion, cast or creed to occupy or use the flat or premises.

  1. Question arises whether such restrictions are valid. Can a Society refuse to admit a person from other religion or cast or creed to become a member of the said society? Can a Society retrained use of a flat by a member of other community or caste or religion?
  2. Very interesting case arose in a case of Society whose membership and right to use and occupy the premises was restricted to only persons who are professing Zorastrian religion. As per Society’s Rules and Regulations and Bye-laws, only person who were permitted to stay therein required to be Zorastrian and they were required to file necessary declarations for the said purpose. One of the members married a women of non-Zorastrian faith. The said Society filed a suit against the member and also added after sometime the wife of the said member who was not following Zorastrian faith and took out motion for restraining non Zorastrian lady from residing or occupying the said flat. Question which arose before Hon’ble High Court of Bombay was that there was an Agreement for sale providing that flat will be used only for residence of Parsee/ Irani Zorastrian and not to be sold to person other than Parsee Zorastrian. The question before the Court was that in a case when Agreement for sale or Bye-laws and Rules a d Regulations of the Co-operative Society if such provision is made, are the members bound by them or are they valid against the persons who are claiming through such members. The Hon’ble Court rejected the Application for injunction prayed for by the society for restraining a non-Parsee/ non-Zorastrian lady using the flat. Such injunction was refused by the Hon’ble High Court of Bombay.
  3. The Hon’ble Court considered the provisions of The Maharashtra Ownership Flats Act, 1963 and The Maharashtra Co-operative Societies Act, 1960. The Court stated that provisions of the said two Acts are binding on the Society concerned and any Bye-law or restriction to the contrary would be hit by those provisions. The Hon’ble Court stated that when an Agreement is contrary to the statutory provisions, its statutory provision which will prevail and one can not insist enforcement of the clauses of the Agreement which is contrary and violative of the statutory provisions. The Court did not grant any interim reliefs to the said society.
  4. It was decided by Hon’ble Division Bench of Bombay High Court in a Notice of Motion No.3525 of 2000 in Suit No.4437 of 2000 (The Zorastrian Radih Society Vs. Mrs. Pervin Nariman Jogina & Anr. Reported in 2001(2) ALL MR 675.)

Donation or any other charges not allowed while transfer

By Legal Bureau

The law is very clear as to how much transfer fee can be charged in co-operative housing societies on a transfer of flat. The Commissioner for Co-operation and Registrar Co-operative Society, Maharashtra, has issued two circulars, clarifying the matter. The circular contains the table of maximum allowable transfer fee and clearly states that no further amount can be taken as donation. For the clarity and information the circulars are reproduced here in below.
Office of the Commissioner for Co-operation and Registrar, C.S. Maharashtra State, Pune.
Circular No. Grihnirman /Gala Tabdil/FFC/89 dated 27th Nov. 1989.
Sub : To increase the amount of premium to be paid on transfer flats.
There is a provisions in bye-law No. 40 (d) (7) of the new model bye-laws published premium maximum upto Rs. 1000/- to be paid to the society is less as compared to the person, he will have to pay the fee as transfer premium as mentioned below. Necessary amendment to bye-law No. 40 (d) (7) may be made accordingly and then executed by the societies.
2. It is therefore requested to bring to the notice of all co-operative housing societies falling under your jurisdiction, the instructions contained in the above said circular and accordingly, to give instructions to the societies to make amendments to their bye-laws at appropriate places.

Area under Maximum premium
To be paid
1) Municipal Corporation & Development Authorities Rs. 25,000/-
2) ‘A’ Class Municipalities Rs. 20,000/-
3) ‘B’ Class Municipalities Rs. 15,000/-
4) ‘C’ Class Municipalities Rs. 10,000/-
5) Rural Sector Rs. 5,000/-

For Commissioner for Corporation & Registration C.S., M.S., Pune.

Society Transfer fees is just Rs1000/- and premium of 1% in Goa

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By Goa Bureau
Sec 134. Fees and premium for transfer of shares or interest of the member.— (1) A
member whose application for transfer of shares and occupancy right in the property of
the society is accepted by the society shall pay transfer fees not exceeding Rs. 1,000/- as
may be provided in the bye-laws of the society and an amount of premium not exceeding
1 % of the value of the plot or dwelling unit as shown in the transfer document:
Provided that no such premium shall be paid in the matter of a transfer to a member of
a family as defined in ‘Explanation’ to section 6 of the Act.
(2) In case of transfer of share and interest or occupancy right from individual member
to joint member, such transfer fee and premium shall also be payable.
(3) The amount of transfer fees shall be credited by the Society to its reserve fund and
the amount of premium shall be credited to a fund called “common amenities fund” to be
used for common amenities in the society.

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