Home > Judgments > Sale and Transfer of Property > Nominee is not Sole heir of Property

A nominee of a property in a housing society does not automatically become the absolute owner of the property after the death of the original owner, the Bombay High Court has ruled in an important order.

Delivering the verdict in a legal battle that has dragged on for over 29 years, Justice A P Deshpande said it would be the personal law of an individual that would determine the successor to the property and not the nomination under the Cooperative Societies Act.

"The Maharashtra Cooperative Societies Act (MCSA) does not provide for a special rule of succession altering the rule of succession laid down under the personal law,'' the judge said, citing two earlier judgments. The court held that a nominee did not become the "absolute owner'' and was empowered only to hold the "property in trust for the real owners, that too for the purpose of dealings with the society''. A nominee has to give way to the legal heirs.

The court's judgment came in a dispute over a 5,610-sq-ft plot at the Nav Rajasthan Co-Operative Housing Society in Pune bought by Shivram Sattur, who had named his wife Tarabai as a nominee.

Tarabai tried to sell the property after his death, but her four children sued her. Two subordinate courts upheld the sale agreement saying Tarabai had become the sole owner of the property as a result of the nomination.

The HC, however, did not agree and said that her children also had a right over the plot as they were the legal heirs.

The Hindu law says that on the death of a man, in case there is no will, the property is equally shared between the wife and the children. Muslims are governed by their personal laws.

Under the MCSA, on the death of a member, the society can transfer the interest to a nominee or an heir or a legal representative. Such a nominee does not become the only owner, the HC said. The nominee represents the legal heirs of the deceased member while dealing with the cooperative society and is only empowered to act on behalf of the real owners. This is a temporary arrangement between the death of the member and till the court decides the legal heir who is entitled to the property or estate.

The HC judgment has been stayed for eight weeks on a request from the developer who bought the property. 

NOMINATION FACTS

A society member can make a nomination, which can be revoked at any time

On the death of a member, the society transfers the shares to the nominee or the heir or legal representative

In case no nominee is mentioned, the society puts out a public notice inviting claims

 

The nominee is in charge of the property only till the court decides who is entitled to the property as per the succession laws

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