Author: Debasis Guin, Advocate, High Court Calcutta
when a member of a co-operative Housing Society in West Bengal, died intestate by nominating a person, whether the Society is required to transfer the share or interest in respect of the apartment of the said Member to the Nominee
Section 76 of the West Bengal Co- Operative Societies Act 2006 (previously Section 79 of the West Bengal Co- Operative Societies Act 1983) provides for nomination by a member and on the death of member the Society shall dispose of the share or interest of such member.
“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 shares or interest of such member on his death”.
Section 70 of the West Bengal Co- Operative Societies Act 2006 (previously section 80 of the West Bengal Co -operative societies Act, 1983) provides for disposal of deceased member’s share or interest to the nominee, if any, made under section 76 of the Act.
“Section 70: Disposal of deceased member’s share or interest. – (1) On the death of a person who is as member of a Co- operative Society, his shar or interest in the co -operative Society shall, subject to the provisions of section 58 and 72 and to the further provisions of this section, be transferred –
(a) to the nominee, if any made under section 76 or.
(b) xxxxx xxxxxx xxxxxx xxxxxx “
Having considered the aforesaid two provisions of the said Act, there can be no doubt that where a member of a co-operative Society nominate a person in consonance with the provision of the Rules, on the death of such member, the co-operative society is mandated to transfer all the shares or interest of such member in the name of the Nominee. The above interpretation of section 76 (previously section 79) so emerges from Section 70 (1) (a) Previously Section 80(1)(a) which postulates, that the share or interest of a member of the Society, “on his death” shall be transferred to the person nominated under section 76 (previously section 79).Similarly in addition to the aforesaid statutory provisions Rule 117 of the West Bengal Co-operative Societies Rules 2011(previously Rule 127 of the West Bengal Cooperative Societies rules 1987): which provided for nomination of transferring the share and interest of the deceased member. Rule 117 of the said Rules which quoted below: –
“117 Nomination of Transfer – (1) A member of a co-operative Society may in accordance with the provisions of section 76 nominated in writing any beneficiary to do his share or interest of the value of such share or interest shall, on his death be paid or transfer under the provisions of the Act. Nomination shall be made in Form XXVIIIB.”
Similarly Rule 116A of the West Bengal Co-operative Societies Rules, 2011 (previously Rule 128 of the 1987 Rules) provides for disposal of deceased member’s share or interest and procedure for calculation of value of shares. Rule 116A is quoted below: –
“116A : Disposal of deceased member’ share or interest and procedure for calculation of value of shares- (1) Where a Co-operative Society has to make a refund of the value of a share ,the value of the share shall be deemed to be equal to the amount paid upon the share:
Provided that where a portion of the assets is estimated to be bad or doubtful in the latest audited balance sheet and is not covered by funds created out of profits, the board may, for the purpose of such payment ,reduce the value of the share, in the same proportions as the aggregate amount of assets which are not bad or doubtful ,less the amount of outside liabilities ,bears to the paid up share capital.
(2) Where a transfer of share or interest Is made, the value of the share or interest shall be deemed to be the sum actually paid by the member for the acquisition of such share or interest.”
That similarly in the same manner as postulates under section 76 of 2006 Act (79 of 1983 Act), Rule 117 of 2011 Rules (Rule 127 of 1987 Rules) provides, that if a nominee has been made by a member under section 76 (Section 79 and 83A), the share or interest or the value of such share or interest stands in the name of the deceased member, would be transferred to the nominee. However, necessary notice of Rule 117 of Rule 2011 (127 of 1987 Rules) postulates nomination in favour of a person belonging to his family. So, if a nominee has been made in respect of a member of his family the Rules and Act are squarely applicable so far as nomination is concerned. So in view of the statutory provisions if there is a valid nomination under section 76 (79 of the old Act), the Co-operative Society is liable to transfer the share or interest of a member in the name of the nominee. The Hon’ble Supreme Court of India in the case of Indrani Wahi – vs Registrar of Co-operative Society reported in (2016) 6 SCC 440 held in para 20 “having recorded the above conclusions, it is imperative for us to deal with the conclusion recording in paragraph 6 of the Judgement of this Court in the Usha Rani Bhattacharjee’s case. In this behalf, it is necessary to clarify the transfer of share or interest of a nominee under section 79 in favour of the nominee with the record of the concerned co-operative societies and is binding upon the Society. The Co-operative society has no option whatsoever, except to transfer the membership in the name of the nominee inconsonance with the section 79 and 80 of the 1983 Act read with Rule 127 and 128 of the 1987 Rules”.so in view of the Hon’ble Supreme Court’s Judgement and also the statutory provision of the West Bengal Co-operative Societies Act, 2006 as well as West Bengal Cooperative Societies Rules 2001 if a member made a nominee on the death of such member his share and interest shall be transferred to the nominee by the co-operative society without doubt at all.
Similar view has been taken by the Hon’ble Supreme Court of India in case of Gayatri Dey – vs. Moushumi Co-operative Societies Limited & Ors. Reported in (2004)5 SCC 90 clearly held the right of nomination to have transfer of share and interest of any deceased member is automatic by action of the society which required to be performed.
That similarly Hon’ble Division Bench of Calcutta High Court in the case of Binoy Krishna Choudhury –Vs State of west Bengal & Ors by referring the provision of section 79 and 80 of the 1983 Act and also Rule 127 and 128 of the 1987 Rules held that the nominee got automatic right to inherit, and the co-operative society is bound to transfer the share and interest of the deceased member in favour of the nominee.
So according to me relying upon the several decisions of the Court and also the relevant provision of the West Bengal Co -operative Societies Act 2006 and the Rules made thereunder it is the duty of the Society to transfer the share and interest of the deceased member to the Nominee subject to compliance of all formalities by the nominee of the deceased member to be a member of the society.
