Is The Act Of Appointing Nominees Binding The Cooperative Housing Societies?

All the people who are involved in or are members of any Cooperative Housing Society and have house in the same, have to appoint a nominee who receives the transfer in his favor of the stated share, on the death of the member. But the fact remains that these nominees have to face troubles to get the transfer accomplished in their favour after the demise of the member from the cooperative housing society.

In the recent case of Indrani Wahi vs. Registrar of cooperative societies, were contemplating between the questions these two questions –

1. Whether this transfer of share after the death of the member to his nominee is obligating the cooperative housing society.
2. Or whether the rights owned by the nominee have any applicability to the rights owned by the heir on account of law of inheritance of succession, concerning the allotment of the flat to the deceased member by the cooperative housing society.

According to the case, the person who owned the flat in the cooperative housing society had nominated his daughter to get the transfer of share or interest after his demise. But after the demise of her father, the Deputy Registrar of Co-operative Societies refused to transfer the share to the daughter as her brother wrote a letter to the Deputy Registrar stating the actual nominee appointed by his father was his mother and not her sister, according to the applicable Act and Rules.

The Supreme Court said that in case a member nominates somebody in accordance with the Act and Rules, then the court is entitled to transfer the share in the name of the nominee after the demise of the member.

After this, it was also said that in such a case, the rights owned by other family members on account of the law succession or inheritance, are submissive rights. The exception will be when the person does not enjoy the nomination rights as per the relevant Act and Rules; the current share of the member would get delegated on account of inheritance or succession.
As a result, in this case the apex court had instructed the cooperative society to transfer the share of their former member to his daughter as per the nomination appointed by him.

Conclusively, the observation recorded was that the transfer of share as per the nomination and in accordance to the Act and Rules is obligating such cooperative housing societies. On the other hand, this obligation is only against the society and would hold no applicability on the matter of issuing of the title between the successors or inheritors after the death of the member.