Nomination to flats on member’s death– Confusion Compounded

By I C Naik

Nomination of a person to whom the society shall transfer the share and interest of the deceased member is a matter of serious anxiety for every flat-owner in a housing society. The Process has become a source of irritation to the Management Committee though the M C S Act 1960 u/s 30 provides an extremely simple mechanism in this behalf.

It is to be administered in accordance with simple Rules 25 and 26 of the M C R 1961. Rule 25 offers two modes of filing nomination namely by a document or by an entry in the Nomination Register and it must take place during the life time of the member. Where nominee was not appointed by a member the Committee should invite claims through notice displayed on the Society’s Notice Board and decide the name of successor to the best of its ability. Rule 26 requires that in the members’ register in Form I prescribed under Rule 32, at item (1) Full name and address of the person nominated by the member under Section 30(1) and (2) Date of nomination are to be entered. What more does one need to feel secured?

Conspicuous by its absence in Law and Rules is the very common phrase namely “ subject to the requirements of bye-laws” meaning thereby no need to have any further elaboration in the bye-laws about nomination management. Membership Application Form prescribed for seeking membership is all that is required and is provided in every Model.

In one dispute about a married daughter nominee seeking membership upon death of his father, in a co-operative housing society registered under West Bengal Act, the Apex Court directed to admit such nominee to membership.  The Apex Court did not go in to the issue of ownership rights of legal heir available under personal laws of the rightful successors, as that was not raised before any of the Courts. It was debated solely with reference to cooperative society law. The S C ruled: Valid nomination entitles the nominee to membership and possession and occupation of the flat without any further actions by the Committee.  [Indrani Wahi vs. Registrar of cooperative societies & ors C A No.4646 of 2006 of 2006 [March 10, 2016]

Regular visitors to this web-site must have come across a topic “Why Managing Nominations in C H S is so Clumsy” discussed in Parts 1-4: find them here:  The source of confusion is solely redundant procedures prescribed in each model bye-laws and the Housing Manual has proved once gain its redundancy in this regard.

1 In Para 3.5 of Housing Manual a reference is made to sub-rule 32 and 33 which “enables the member to make an application in the prescribed  from  to  the  society  for  nomination”  These numbers are to be found in  Model bye-laws 2009 and not Sub-Rules.

2. Under this Model, bye-law No 32 specifies a fee of Rs 100/- for filing a fresh Nomination revoking the one previously filed. Housing Manual specifies only half of it, namely Rs 50.

3. Most part of the rest of the text is avoidable repetition of content of the bye-laws in a language which adds to the confusion:

4. On the lines of bye-laws the Housing Manual also crosses the statutory boundaries of Section 30. There exists an unambiguous immunity to the society under sub-section 4 as extracted below: (4) “All transfers and payments duly made by a society in accordance with the provisions of this section shall be valid and effectual against any demand made upon the society by any other person.   Bypassing this law,  two requirements as copied below verbatim are added increasing the burden of C H S management :

a. The  nominees  shall  also  file  an  Indemnity  bond  in  the  prescribed  form indemnifying the society against any claims made to the shares   and interest of the deceased member in the capital / property of the society by any of them.

b. “A person has made nomination to the membership by nominating anyone. That nomination do not supposed acquired full right of ownership to them. They have to approach competent court and legal ownership to society and beneficiary of shares and interest in property of society and concerned person provides legal and proper documents to society. “

5. Paragraph 3.6 of Housing Manual lays down a “Procedure where No Nomination is made by a Member “ There are more than 300 words used to provide a mandate to take care of such situation which could have taken care in  less than 45 words: “In the absence of a valid nomination, the claimant shall provide succession certificate issued by a competent Court and in the meanwhile the Committee may admit any one of the claimants to the membership which shall be subject to the Court’s Certificate.“

Such unwarranted procedures have the effect of frightening members inculcating reluctance to taking responsibilities of managing the affairs of the housing society.

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