2016 (3) TMI 1255 - SC - Indian Laws

Transfer of title in favour of the nominee - case of a valid nomination under Section 79 of the 1983 Act - inheritors or successors to the property of the deceased - member of the Cooperative Society requirment to nominate a person in whose favour the Cooperative Society would dispose of the share or interest of the member on his death - Held that - As is postulated under Section 79 of the 1983 Act, Rule 127 of the 1987 Rules provides, that if a nomination has been made by a member under Section 79, the share or interest or the value of such share or interest standing in the name of the deceased member, would be transferred to the nominee. Rule 127 postulates nomination only in favour of a person belonging to his family . It is not necessary for us to deal with the issue whether the appellant Indrani Wahi, being a married daughter of the original member Biswa Ranjan Sengupta, could be treated as a member of the family, of the deceased member (Biswa Ranjan Sengupta), because the learned Single Judge, as also, the Division Bench of the High Court concluded, that the appellant Indrani Wahi was a member of the family, of the original member - Biswa Ranjan Sengupta. This conclusion has not been assailed by the respondents, before this Court. Rule 128 of the 1987 Rules also leads to the same inference. Inasmuch as Rule 128 aforementioned provides, that only in the absence of a nominee, the transfer of the share or interest of the erstwhile member, would be made on the basis of a claim supported by an order of probate, a letter of administration or a succession certificate (issued by a Court of competent jurisdiction). Insofar as the instant aspect of the matter is concerned, there is no doubt in our mind, that even Rules 127 and 128 of the 1987 Rules, lead to the inference, that in case of a valid nomination, under Section 79 of the 1983 Act, the Cooperative Society is liable to transfer the share or interest of a member in the name of the nominee. We hold accordingly. Having recorded the above conclusion, it is imperative for us to deal with the conclusion recorded in paragraph 6 (already extracted above) of the judgment of this Court in the Usha Ranjan Bhattacharjee case (1997 (3) TMI 621 - SUPREME COURT OF INDIA ). In this behalf, it is necessary to clarify that transfer of share or interest, based on a nomination under Section 79 in favour of the nominee, is with reference to the concerned Cooperative Society, and is binding on the said society. The Cooperative Society has no option whatsoever, except to transfer the membership in the name of the nominee, in consonance with Sections 79 and 80 of the 1983 Act (read with Rules 127 and 128 of the 1987 Rules). That, would have no relevance to the issue of title between the inheritors or successors to the property of the deceased. Insofar as the present controversy is concerned, we therefore hereby direct the Cooperative Society to transfer the share or interest of the society in favour of the appellant Indrani Wahi. It shall however, be open to the other members of the family (presently only the son of Biswa Ranjan Sengupta Dhruba Jyoti Sengupta; we are informed that his mother Parul Sengupta has died), to pursue his case of succession or inheritance, if he is so advised, in consonance with law. Appeal stands allowed in the above terms.

Summary

Issues Involved:
1. Validity of nomination under Section 79 of the West Bengal Cooperative Societies Act, 1983.
2. Rights of a nominee versus the rights of legal heirs.
3. Interpretation of Sections 79 and 80 of the West Bengal Cooperative Societies Act, 1983.
4. Applicability of Rules 127 and 128 of the West Bengal Cooperative Societies Rules, 1987.
5. Relevance of previous judgments related to nomination and inheritance.

Detailed Analysis:

1. Validity of Nomination under Section 79 of the West Bengal Cooperative Societies Act, 1983:
The appellant's father, Biswa Ranjan Sengupta, nominated his daughter, Indrani Wahi, as per Section 79 of the 1983 Act. Section 79 mandates that a member of a Cooperative Society must nominate a person to whom the society will transfer the share or interest upon the member's death. The appellant argued that her father's nomination was valid and that she should be recognized as the rightful owner of the flat.

2. Rights of a Nominee versus the Rights of Legal Heirs:
The Deputy Registrar of Cooperative Societies initially declined to transfer the flat to Indrani Wahi, asserting that as a married daughter, she did not fall within the definition of 'family' under Section 79 read with Rule 127 of the 1987 Rules. The High Court's Single Judge, however, ruled that married daughters are not excluded from the definition of 'family' and directed the transfer of membership to Indrani Wahi. The Division Bench of the High Court, relying on previous judgments, held that while a nominee is entitled to possession, the issue of title should be adjudicated separately among the legal heirs.

3. Interpretation of Sections 79 and 80 of the West Bengal Cooperative Societies Act, 1983:
Sections 79 and 80 are crucial for determining the controversy. Section 79 allows a member to nominate a person for the transfer of their share or interest upon death. Section 80 stipulates that the share or interest of a deceased member shall be transferred to the nominee. The Supreme Court emphasized that the Cooperative Society must transfer the share or interest to the nominee, but this does not determine the title, which remains subject to inheritance laws.

4. Applicability of Rules 127 and 128 of the West Bengal Cooperative Societies Rules, 1987:
Rule 127 allows nomination in favor of a family member and includes major sons and daughters. Rule 128 provides that in the absence of a nominee, the share or interest should be transferred based on legal documentation such as probate or succession certificates. The Court concluded that a valid nomination under Section 79 mandates the Cooperative Society to transfer the share or interest to the nominee.

5. Relevance of Previous Judgments Related to Nomination and Inheritance:
The Court referred to previous judgments, including Usha Ranjan Bhattacharjee vs. Abinash Chandra Chakraborty and Smt. Sarbati Devi vs. Smt. Usha Devi. These cases clarified that a nominee is entitled to possession but not necessarily the title, which should be determined by inheritance laws. The Court distinguished these cases by emphasizing that the Cooperative Society must transfer the share or interest to the nominee, but the legal heirs can still contest the title in an appropriate forum.

Conclusion:
The Supreme Court directed the Cooperative Society to transfer the share or interest of Biswa Ranjan Sengupta to Indrani Wahi, as per the valid nomination under Section 79. However, the Court clarified that this transfer does not affect the rights of other legal heirs to pursue their claims of inheritance or succession in accordance with the law. The appeal was allowed, and the judgment was applied to a similar case (Civil Appeal No.4930 of 2006) with the same outcome.