Dr. Dhrubes Biswas vs The State Of West Bengal & Ors

The Petitoner, Dhrubes Biswas, who resided abroad for his professional commitments, upon return to India alleges to have found that the flat unit locked and was aggrieved by the denial of the Housing Society to accept him as a member and to enter into, possess & occupy the flat unit.

The Petitioner approached the Registrar of the Co-operative Housing Society with a compliant case seeking redressal as against such deprivation.

By an order dated 21st December, 2018, the Joint-Registrar, Co-operative Societies, RTAH Cell has ordered that both the mother and the petitioner are to be deemed as nominees of the deceased and the Membership of the Society shall devolve jointly on both of them.

A question of law is raised by Mr. Raja Saha, learned Advocate appearing on behalf of the State. He submits that Section 76 of the 'West Bengal Co-

Operative Societies Act 2006' (2006 Act) uses the expression "a person" may be inducted as a nominee, thereby meaning only one person, can be a nominee.

He therefore submits that the nomination of the

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petitioner and his mother jointly in the instant case is illegal and so is the order of the Registrar.

While the language of the Statute appears to be clear there is room and need for interpretation of the provisions of Section 76 of the 2006 Act in the context of the State's submissions.

Section 76 of the 2006 Act stipulates as follows:-

"76. Nomination by member:- Subject to the by-laws of a Co-operative society, any member of such Co- operative society may in accordance with the rules nominate a person in whose favour the Co-operative society shall dispose of the share or interest of such member on his death.".

In the context it is also relevant to set out Rule 117 of the West Bengal Co-Operative Societies Rules 2011 "117. Nomination of transferee 1.

A member of a co-operative society may in accordance with the provision of section 76 nominate in writing any person belonging to his family to whom the share or interest or the value of such share or interest shall, on his death, be paid or transferred under the provision of the Act; nomination shall be made in Form XXVIIIB.

Provided that if a member has no family he may nominate any person to whom such share or interest or the value of such share or interest shall be paid or transferred; Provided further that such member may, from time to time, revoke such nomination and make a fresh nomination.

2. Every co-operative society shall keep a register of all persons so nominated.

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3. In case the nominee of a member dies, the member shall report the death of such nominee to the society and make a fresh nomination if he so desires.

Explanation - For the purpose of this rule a family shall have the same meaning as given in the Explanation to sub-section (3) of section 16 and shall include major sons and daughters irrespective of marital status."

(emphasis added)

Section 76 of the 2006 Act, quoted underneath, ought to be interpreted in the light of the ancillary by- laws and Rules annexed to the 2006 Act.

Sub-rule (1) of Rule 117 specifies that a member of a co-operative society may, in accordance with the provision of Section 76, nominate in writing, any person belonging to his family to whom the share or interest or the value of such share or interest shall, on his death, be paid or transferred under the provision of the Act.

A conjoint reading Section 76 of the 2006 Act and Rule 117 of the 2011 Rules would reveal the intention of the legislature that the expression "a person" mentioned in Section 76 would have to mean and include more than one person. It is also relevant to note that Clause 3 of Rule 117 stipulates that the every Co-operative Society shall keep a Register of all persons so nominated. So to read the expression "a

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person" under Section 76 as to mean only one person would render Rule 117 nugatory and otiose. This would not only defeat the intention of the legislature but is also against the principles of harmonious interpretation.

For the purpose of explaining the conclusion that the Court proposes to arrive at a hypothetical example is taken. Let us assume for the sake of argument that a person has more than one legal heir i.e. a wife and two sons, all 3 heirs would be entitled to the membership. As per the scheme of Section 76 of the 2006 Act the member would either have to nominate one person as member and execute a will to transfer the share equally upon all 3 persons. In case of intestacy all three legal heirs entitled to his share of property in terms of Succession Act, in question and would need a decree of Court to prove their right to a share in the property.

With a view to prevent any ill-intention on the part of one heir to deprive the others of their share it is also necessary to permit the recorded shareholder to name all beneficiaries of the shareholding to be named as nominees in the records of the Society.

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It is, therefore, clear and unequivocal view of this Court that the expression "a person to be a nominee" under Section 76 of the 2006 Act must be read to be one or more legal heirs in the case of death of the original member. Section 76 of the 2006 Act, expression "a person to be nominated" must be read to include more than one person.

The Supreme Court in the case of Indrani Wahi v Registrar of Cooperative Societies and Others, reported in (2016) 6 SCC 440 ('Indrani Wahi Case'), the Supreme Court considered the provisions of nomination under the West Bengal Cooperative Societies Act, 1983 (the predecessor of the the 2006 Act), wherein, the cooperative society is required to transfer the shares and interest of such member in the name of the nominee. The conclusion drawn by the Supreme Court was that a cooperative society under the 2006 Act was bound by the nomination made by the member. Therefore, in case of a nomination in the name of more than one person, the society has no option but to transfer the shares in the name of the named nominees, after the death of the member.

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It is now well settled principles of common law as recognized by series of decisions in this regard by the Hon'ble Supreme Court of India that the nominee is actually a trustee or custodian of the property.

Even in cases of a Life Insurance Policy or a monetary fixed deposit account etc. he is a trustee to hold the property which includes immovable property and cash for the benefit of the actual legal heirs of the said property In Smt. Sarbati Devi and another v. Smt.

Usha Devi, reported in AIR 1984 Supreme Court 346, Para 4-8, it has been held categorically held that a mere nomination made under Section 39 of the Insurance Act, 1938 does not have the effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the assured. The nomination only indicates the hand which is authorized to receive the amount, on the payment of which the insurer gets a valid discharge of its liability under the policy. The amount, however, can be claimed by the heirs of the assured in accordance with the law of succession governing them. Decision of Allahabad High Court

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was reversed. The ratio held in the judgements reported in AIR 1962 All 355; AIR 1978 Delhi 276 and AIR 1982 Delhi 36 were overruled by the Apex Court in this case.

Nomination and succession therefore stand on different footings. However in common practice Nominees and executors of wills can also beneficiaries of the estate.

Now coming to the instant case, this Court is of the view that the original owner intended that his shareholding in the society should be transferred equally between his wife and son. Since the petitioner, is a joint nominee along with his mother and his mother is not residing in the said flat but the petitioner is desirous to stay in the same premises, he shall be entitled to enter into the said premises by breaking open the padlock in the presence of the office bearers of the Co-operative Society in question and enter into the said flat.

It is made clear that the share of the mother, namely, Mamata Biswas as well as the petitioner in the said flat unit shall be equal i.e. 50% each. The Society shall record, in this regard, the joint

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membership of the said flat unit in their register, as is required under Rule 117 (3) of the Rule of 2011. In the event of any obstruction, it is ordered that the Officer-in-charge, New Town Police Station shall be present during the time when the padlock on the flat unit is broken, for ensuring maintaining the public peace and tranquility.

In case the mother is desirous of residing in the said flat, the petitioner shall allow her to do so and the Society shall ensure the entry of the mother into the said flat unit for the aforesaid purpose.

It is further ordered that the flat unit shall not be sold without the joint consent of Mamata Biswas and Dhrubes Biswas, the writ petitioner in the instant proceeding.

The impugned order dated 21st December, 2018 is upheld.

The Society shall record the Membership of the said flat unit jointly in the name of Smt. Mamata Biswas and Dhrubes Biswas on the basis of this order.

With the aforesaid directions, the instant writ petition shall stand disposed of.

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The petitioner shall serve notice of this order on the Society as well as the mother, Mamata Biswas.

There will be, however, no order as to costs.

Urgent photostat certified copy of this order, if applied for, be given to the parties upon compliance of all formalities.

(Rajasekhar Mantha, J.)