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

Mr. D. K. Sengupta, Ms. Sweta Saha, ..For the petitioner. Mr. Raja Saha, Mr. Pritam Choudhury. ...For the State.

Despite service of notice, neither the Co-

operative Society nor the mother, namely, Mamata

Biswas are represented before this Court.

Affidavit-of-service filed in Court is kept with

the record.

A grey area in the West Bengal Co-operative

Societies Act 2006 (2006 Act) is raised in the instant

writ application.

One Samaresh Chandra Biswas was the

original allottee and member of "Aurelia Housing Co-

operative Society Limited." During his lifetime he had

named his wife, Mamata Biswas and son, Dhrubes

Biswas, jointly as nominees to his share in the

Society & consequently the housing unit. 2

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 3

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.

4 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 5

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. 6

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.

7

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 8

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 9

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.

10

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.)