Delhi High Court
Ashok Chand Aggarwala vs Delhi Administration & Ors. on 27 October, 1998
Author: Y.K. Sabharwal
Bench: Y.K. Sabharwal, K.S. Gupta
ORDER Y.K. Sabharwal, J.
1. Mr. C.B. Aggarwala was a member of Supreme Court bar Co-operative House Building Society Ltd. He was allotted by the society a plot bearing No. A-25, Niti Bagh, New Delhi. The perpetual lease deed was registered in the name of Mr. C.B. Aggarwala in 1972. The appellant was appointed by Mr. C.B. Aggarwala a nominee on the record of the society in accordance with Delhi Co-operative Societies Rules, 1973 (for short 'The Rules'). Mr. C.B. Aggarwala died on 13th June, 1973. It seems that the society passed a resolution dated 16th May, 1975 substituting the appellant as member of society in place of his father Mr. C. B. Aggarwala. The appellant had approached the Delhi Administration for substitution of his name in the sublease and for this purpose he moved the Assistant Housing Commissioner, L & B Department, Delhi Administration vide his application dated 21st February, 1975. The appellant was, however, informed by the Delhi Administration by letter dated 5th March, 1975 to produce the succession certificate from a Civil Court of competent jurisdiction so that further action could be taken in the matter. The plea of the appellant before the authorities was that as a nominee he was entitled to inherit the plot of which his father was the lessee. In short, the case of the appellant was that in view of nomination made by his father he was entitled to the ownership of the plot in question to the exclusion of all other heirs.
2. Aggrieved by the action of the authorities, the writ petition out of which this appeal has arisen was filed by the appellant and reliance was placed upon Section 26 of the Delhi Co-operative Societies Act, 1972 in support of the contention that on the basis of nomination be was entitled to inherit the plot in question to the exclusion of other heirs of Mr. C.B. Aggarwala. The writ petition was dismissed by learned Single Judge inter alia holding that Section 26 of the Act does not create a succession.
3. In support of the appeal reliance has been placed on Section 26 of the Act and Rule 35 of the Delhi Co-operative Societies Rules, 1973. It would be useful to reproduce the said provisions as under :-
"26. (1) On the death of a member a co-operative society may transfer the share of interest of the deceased member, to the person nominated in accordance with the rules made in this behalf, or, if there is no person so nominated, to such person as may appear to the committee to be the heir or legal representative of the deceased member, or pay to such nominee, heir or legal representative, as the case may be, a sum representing the value of such member's share or interest as ascertained in accordance with the rules or byelaws:
Provided that -
(i) in the case of a co-operative society with unlimited liability, such nominee, heir or legal representative, as the case may be, may require payment by the society of the value of the share or interest of the deceased member ascertained as aforesaid;
(ii) in the case of a co-operative society with limited liability, the society shall transfer the share or interest of the deceased member to such nominee, heir or legal representative, as the case may be, being qualified in accordance with the rules and byelaws for membership of the society, or on his application within on month of the death of the deceased member to any person specified in the application who is so qualified;
(iii) no such transfer or payment shall be made except with the consent of the nominee, heir or legal representative, as the case may be.
(2) A co-operative society shall, subject to the provisions of section 36 and unless within six months of the death of member prevented by an order of a competent court, pay to such nominee, heir or legal representative, as the case may be, all other moneys due to the deceased member from the society.
(3) All transfers and payments made by a co-operative society in accordance with the provisions of the section shall be valid and effectual against any demand made upon the society by any other person."
Rule 35 (1) For the purpose of transfer of his share or interest under sub-section (1) of section 26, a member of a co-operative 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 a document, such document shall be deposited with the society during the member's life time and where the nomination is made by a statement, such statement shall be signed by the member and attested by one witness.
(2) The nomination made under sub-rule (1) may be revoked or varied by any other nomination made in accordance with that sub-rule.
(3) The record of nomination shall be kept by a co-operative society in such manner as may be laid down in the byelaws.
(4) When a member of a co-operative society nominates more than one person, he shall, as far as practicable, specify the amount to be paid or transferred to each nominee in terms of whole share and the interest accrued in the society.
(5) The value of the share or interest transferred or paid to a nominee or nominees shall be determined on the basis of the sum actually paid by the member to acquire such share or interest unless the bye-laws provided for calculation on a different basis.
(6) (i) Where the member of a co-operative 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 of 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 the 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 representative of the deceased member and proceed to take action under section 26, subject to any appear which may be filed to the Registrar by any person claiming the share or interest of deceased member within 30 days of the decision of the committee. The orders of the Registrar on such appeal shall be final and binding upon all concerned.
(7) If the committee refuses to transfer the share or interest of the deceased member to his nominee or his successor-in-interest, or fails to take a decision on the application of such nominee or the successor-in-interest as the case may be, within 30 days of the date of such refusal or the date of such application, a nominee or any person claiming to be a successor-in-interest application, a nominee or any person claiming to be a successor- in-interest of the deceased member shall file an appeal to the Registrar, who after hearing the society and the applicant or any other person interested, shall pass such order as he may deem fit and on such condition as he may impose and order made by the Registrar shall be final and binding on all concerned."
4. It has been vehemently contended, relying upon the aforesaid provisions, that it was not a case of simple nomination but was a case of providing inheritance. The contention was that this nomination was in the nature of a 'will'. It was pointed out that the nomination was required to be attested by a witness. The contention of learned counsel is that the language of the aforesaid provisions makes it clear that the nominee is to inherit the interest of the deceased, on the basis of the nomination. We are unable to accept the contention. To our mind Section 26 and Rule 35 only provides a protection to the society from undue litigation in case it substitutes in its record the name of nominee in place of deceased on the basis of the nomination. Such an intention is clear from a bare reading of the Section in particular sub-section (3) of Section 26. These two provisions cannot be read to mean that the nomination provides for inheritance in favour of nominee to the exclusion of other heirs. The dispute between the parties in the present case is whether the appellant alone is entitled to inherit the plot to the exclusion of all other heirs or all heirs are entitled to inherit it in accordance with law. The basis of the claim of appellant is the nomination and on that account alone, the appellant says that other heirs are not entitled to inherit the plot in question. We do not agree.
5. The point in issue, in fact, is no longer res integra as far as this Court is concerned. Apart from the view taken by learned Single Judge in judgment under appeal, atleast in two other decisions similar views have been expressed. In Sushila Devi Bhaskar Vs. Ishwar Nagar Cooperative House Building Society Ltd. & Ors., , relying upon the decision of Supreme Court in the case of Smt. Sarbati Devi & another Vs. Smt. Usha Devi, , it was held by a learned Single Judge of this Court that:
"Thus, it now well settled that a mere nomination, made in favour of a particular person, does not have the effect of conferring on the nominee any beneficial interest in property, after the death of the person concerned. The nomination only indicates the hand which is authorised to receive the amount or manage the property. The property or the amount, as the case may be, can be claimed by the heirs of the deceased, in accordance with law of succession, governing them."
6. Similar view was expressed by another learned Single Judge in the case of Priya Nath Mehta Vs. Manju Aggarwal .
7. In Santosh Kakkar & Ors. Vs. Ram Prasad & Ors., 1998 I AD (DELHI) 938, a decision relied upon by learned counsel for the appellant, the law laid down in above two decisions of the Court was not doubted, but distinction was drawn as the factual position therein was different in as much as the plot had not been allotted during the lifetime of the deceased member of the society. That is not the position in the present case. Here even prepetual lease deed was executed during the life time of the deceased. Further, in the present case we are not called upon to decide whether in law the position would be different or not in a case where the land had not been allotted during the lifetime of the deceased as found in Santosh Kakkar's case. In Santosh Kakkar's case too, learned Single Judge came to the conclusion that where the land has been allotted, such nomination would not create a new rule of succession or confer any right or interest in the nominee qua the interest or the right of the deceased member in the land.
8. Reference may also be made to the decision of Bombay High Court in Gopal Vishnu Ghatnekar Vs. Madhukar Vishnu Ghatnekar, . There the Court was concerned with Section 30 of Maharashtra Co-operative Societies Act, 1961 and Rule 25 made under the provision of the said Act. Somewhat similar contention on language of Section 26 and Rule 35 was also raised before Bombay High Court. The contention that the nomination amounted to a 'will' of the deceased was rejected.
9. We see no force in the submission that principles laid down by Supreme Court in Sarbati Devi's case (supra) would not be applicable in view of language of Section 26 and Rule 35. We are of the view that on the basis of nomination the appellant cannot claim that he has become the owner of the plot to the exclusion of other legal heirs of late Sh. C. B. Aggarwala. We are in complete agreement with the opinion expressed by learned Single Judge in judgment under appeal. There is no merit in the appeal which is dismissed accordingly leaving the parties to bear their own costs.