Members, Their Rights, Responsibilities and Liabilities

Part 8

v     Why is Nomination Necessary?

If a member of a Co-operative housing society dies, what happens to his or her membership in the society? In case there is no proper nomination made by the deceased member, what is the position of his or her heirs as to the property rights? What should be done by a member to avoid any confusion after death? These questions are very important and members should take steps to prevent any awkward situations in the eventuality.

A proper nomination by a member as provided under the Bye-laws, therefore, assumes extreme significance in the functioning of a society. It is in the interests of both the society and the members in order to protect the rights of family members.

An associate membership or a joint membership does not by itself entitle an automatic transfer of membership.

This is a wrong impression with many members and must be removed. As per the Bye-laws, a joint or associate member has no property rights. Under the law, a joint or an associate member automatically ceases to be so after the death of the first member.

The first and foremost precaution to be taken by a member is that he or she should nominate a family member in the nomination. The society finds it difficult to fix a legal heir to the shares for the transfer of interest in the property. It is also difficult for the society to collect contributions towards out goings even as the flat continues to be occupied by family members of the deceased member.

Even if a member makes a will and appoints a legal heir as a beneficiary of the interest and shares in the property, a probate has to be obtained from a competent court in the absence of the nomination. This procedure is tedious and time consuming.

      What are the precautions?

A society member must fill in the nomination form and submit it to the society and obtain an acknowledgement on the third copy. Thereafter the committee passes a resolution and accepts the nomination form duly certified by a resolution number and the date of the managing committee meeting endorsed on the form.

It is of utmost importance that the document of nomination be deposited with the society in the manner explained above during the lifetime of the member.

Bye-laws also provide that a member can revoke the nomination. The provisions are contained in Section 30 of the Maharashtra Co-operative Societies Act, 1960, Rule 25 of the Maharashtra Co-operative Societies Rules, 1961 and Bye-laws No. 34 and 35 of the model Bye-laws.

A nominee holds the shares and interest in the flat in trust, and in case of a dispute the matter is referred is referred to a competent court whose decision will be binding on the society and the nominee and disputants.

v     Right of nominee

Dispute was filed by the society for the recovery of the flat for allowing responding No.2 to occupy the flat without obtaining prior permission of the society. Respondent No.1 is the member and Respondent No.2 is his close relative being the husband of his sister. Wife of Respondent No.2 was a nominee of the Respondent No.1 The question was, whether bye-law No.12(1)(g) r/w bye-law No.12(1)(a) would permit the member of the family, in particular who is nominee of the member to occupy the suit flat without obtaining prior permission of the society. Nomination by member does not create any right in favour of the nominee, but the right is in favour of the nominee is limited and fructifies only after the death of the original member. Occupation of flat by Respondent No.2 and his family members was unauthorized users of the flat. Petition was allowed.