Can Society transfer the Share Certificate to Nominee

Can Society transfer the Share Certificate in the name of the nominee inspite of objections from legal heirs?

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 Mumbai 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
(i) 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.
(ii) 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.





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38 thoughts on “Can Society transfer the Share Certificate to Nominee

  1. Hello Sir,
    My brother and me purchaed a flat no. 1002 = having 2 agreement 1002A and 1002B of the same flat. 1002A belong to me and 1002B belongs to my brother. My brother stayed at different place with his wife and a minor kid. He died – we hv no nomination and no will. My brother wife also know / wants that the flat should be transferred to me – she is ready to sign any document – what docements are we suppose to give to society to transfer the flat in my name ? awaiting reply sir

  2. i have property in the name of father and uncle,now we are separated from joint family of uncle, now i want to delete 2nd holder name(my uncle) in property how i can do it?
    please tel me the exact procedure as per law

    and also guide me what is the implication as per income tax
    chetan shah
    9867711221
    victorzkl@hotmail.com

  3. My mother is the shareholder of a shop in a Cooperative Society. My brother is now the nominee. He had applied for transfer of shop in his name. The society has asked for indemnity bond after which they will make him trustee. However he cannot sell the shop till he provides a succession certificate.
    Now as per our internal family arrangement, my brother decided that the shop should be transferred to my name.
    I applied to the society to transfer the shop in my name with following documents
    “Memorandum Recording Oral Settlement”
    “Affadavit cum declaration”
    “Indemntiy Bond”

    However society replied to my brother rather than me, that the society has decided to transfer the shop in my brothers name as a trustee, until he give succession certificate & also attached a copy of their previous reply.
    I have following questions
    1) Does a succession certificate apply to an immovable property
    2) Is it necessary for the shop to be transferred to my brothers name first and then only it will go to the whose name is in succession certificate
    3) Will I have to pay society transfer charges for both the name transfers
    4) We inquired in court regarding succession certificate, however they said that for immovable property I have to produce letter of administration. However society is insisting of succession certificate. What should be done

  4. both the nomination paper as well as share certificate has got misplaced in transition,but the society does have the copy ,but due to some vested interest they are not transferring the same in my mothers name. What is the alternative to get a copy from court or some office

  5. Posted on March 12, 2012 at 12:58 pm
    Hello Sir,
    My brother and me purchaed a flat no. 1002 = having 2 agreement 1002A and 1002B of the same flat. 1002A belong to me and 1002B belongs to my brother. My brother stayed at different place with his wife and a minor kid. He died – we hv no nomination and no will. My brother wife also know / wants that the flat should be transferred to me – she is ready to sign any document – what docements are we suppose to give to society to transfer the flat in my name ? awaiting reply sir

  6. one of the lady member of our society had died some years back.(in 2002) She had four children (two sons and two daughters ,all adults) As per record of society, nomination is given in favour 3 children (two sons and one daughters) Previous committee/s has not taken steps for transfer interest of shares till date . In 2009 two sisters and one son gave a letter to society stating that all four children has rights on flat, no transactions such transfer, sale etc, should be done without their knowledge . No action is taken by then managing committee on the letter
    The son who has not signed letter(one of the nominee in nomination form) is staying in the flat and there is huge arrears of maintenance charges payable for the flat to the society.. We have recently written letter to the son who is residing in the flat to clear the dues as well as settle the issue of pending transfer of interest of shares among the family members..There is no response till date. We have also written to others but letters are retuned undelivered. We have come across existence of unregistered will which gives equal right to all the four. But the executor has not executed the will. None of four members are co-operating to solve the issue and blame each other for delay.
    Please let us know the steps to taken to safeguard the interest of the society as well as what is procedure to be followed if they are not settling the issue among themselves.

  7. While going through the nomination register, we have come across that one member has appointed his wife and three minor sons ( they have become major now ) as nominee/s with 25% share in 1981.
    His wife has died long time back..Reminder has sent to him recently to revise/update the nomination .but no response
    What is the position of society.

    whether society can treat the existing nomination is still valid since no change is advised and treat the share equally between three sons who are major now (i.e 331/3% each) or we can advise him
    the nomination given by him is longer valid since one of nominee has expired and if he is interested he should revise nomination, otherwise law will take own course in case any eventuality.
    Please enlighten us the legal position.

  8. My dad expired leaving behind a nomination and will stating that his flat to be nominated to his 3 sons and 2 daughters in equal proportion. 4 children have signed a letter to transfer the flat in their name. one is not signing the transfer papers as he is staying in the flat. What can the society do in this position. can they go ahead with the transfer without his signature.   

  9. I have a query. One lady staying in our society is estranged from her husband. He does not stay here but his name is first on property index II card and hers is second. Further the lady has submitted a POA signed by her ex husband assigning the half ownership in favor of his son as he turns 18. The lady is demanding the share certificate in her sons and her name. Can we issue share certificate in the minors name or issue it as per the property card Index II as available with the society showing Husband & wife’s name?

  10. In our society one member is died who submitted nomination form in favor of his wife.He has two sons except no one is legal hair. One advocate suggested that society should obtain an affidavate from his wife declaring that there are only three legal hairs and her sons has no objection for transferring share certificate in her name and also to obtain no objection letters from her sons to that effect.
    Please advice us whether this is correct procedure to transfer share certificate in her name.

  11. Hello sir
    I’m amit dodhiwala age 32 from mumbai . My mom bought a flat in 1998 in that she made me a joint holder but I was minor at that time by six months at the time of paying stamp duty and final registration I was fully major .then in 1999 our building made coop housing society at that time society said that no nomination is required by my mother as it was in joint name with me .my mother expired in 2010 unexpected with out leaving any will.after some days I went to society to transfer the share certificate in my name as I was the joint holder they asked me to take noc of my both married sister so I made affidavit and indemnity bond where I and my both sister had transfer their share and interest in the said flat on my name as a legal heir then society had transferred the share certificate 100% on my name . After some months I wished to sell the flat at that time society again asked for the noc of both the sister at that time one of my elder sister had objected and asked for the 1/3 share of the total value of the flat and sent notice to society to not to transfer the flat on third party name and she also clams that the affidavits given to society while changing the name in share certificate has not singed by her so I had approached the handwriting expert and results came that she has only singled the documents .but due to the notice sent by her to society they are not letting me to sell the flat and now I wish to take bank loan on the said flat society is not giving noc for that also so what action should I take and what are my rights holding in the flat.

    Regards

  12. IF Mother and son were joint holders of a flat in a society. Share cert, was in their names. Now son has expired and his wife too has expired leaving their son alive. Can mother apply to have society share cert. delete her son’s name and replace it with her nominated daughter’s name without no objection cert./affidavit from her grandson or is this compulsorily required by society.
    If so can you mail me the formats for above.

  13. My Father passed away in 2011 and now as no nomination was made in the society where we are staying, i want to make my mother as legal heir. Can i get the content to publish in news-paper. and what is the detailed procedure to make my mother a legal heir of that flat.

  14. My mother nominated her five sons in the society. Now on her death the first nominee has applied for membership.He has submitted an indemnity bond. The society is insisting that all the nominees sign the indemnity bond although only the first will be admitted. The others have no objection to the membership of the first nominee.What is the right procedure? Thanks.
    With Regards.

    1. Nominee are mere trustee. There is no first or last nominee. If there is no objection, a family partition deed signed by all other nominee must be submitted to the society besides all other transfer formalities.

  15. in my society there is one resident who have the share certificate in the name of 2 persons but one person is dead during august 2016 so he wants to remove the dead persons name from share certificate and keep only his name so, in this case can i need to issue new share certificate with new share certificate number or keep old share certificate number on the new share certificate.
    He have the WILL of dead person and his is a nominee.

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