Skip to content


Gopal Vishnu Ghatnekar Vs. Madhukar Vishnu Ghatnekar - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtMumbai High Court
Decided On
Case NumberFirst Appeal No. 720 of 1972
Judge
Reported inAIR1982Bom482; (1982)84BOMLR41; 1982MhLJ65
ActsMaharashtra Co-operative Societies Act, 1981 - Sections 30; Maharashtra Co-operative Societies Act, 1961 - Sections 39
AppellantGopal Vishnu Ghatnekar
RespondentMadhukar Vishnu Ghatnekar
Appellant AdvocateV.V. Karmarkar and;J.R. Lalit, Advs.
Respondent AdvocateBhimrao N. Naik, Adv.
Excerpt:
.....be exercised arbitrarily and so as to deprive a person of his right to the shares or property of a deceased member. a society cannot arbitrarily refuse to make a person a member. it is for this very reason that the provision is made in the co-operative societies act for an appeal to the registrar in case society refuses to accept any person as a member. it cannot be, that the act dealing with the regulation of the co-operative societies is intended to lay down a new rule of succession which will again be dependent on the sweet will of the society or to deprive a person to a part of the estate or to give to the society a right to pick and choose from among heirs who should inherit the property of the deceased, except provisionally. ;poona hindu middle class co-operative housing society..........(1) on the death of a member of a society, the society shall transfer the share or interest of the deceased member to a person or persons nominated in accordance with the rules, or, if no person has been so nominated to such person as may appear to the committee to be the heir of legal representative of the deceased member? provided that, such nominee, heir or legal representative, as the case may be, is duly admitted as a member of the society; provided further that, nothing in this sub-section or in sec. 25 shall prevent a minor or a person of unsound mind from acquiring by inheritance or otherwise, any share or interest of a deceased member in a society. (2) notwithstanding anything contained in sub-section (1) any such nominee, heir or legal representative, as the case may be, may.....
Judgment:

1. The plaintiff and the defendant are brothers. Their father Vishnu Narayan Ghatnekar died on 9-5-1969 leaving behind him the plaintiff, the defendant and other children as his heirs. At the time of his death Vishnu held shares in a co-operative society and was an allottee of a piece of land under a lease from the society on which he had put up a building. Vishnu also had filed a nomination with the society nominating the plaintiff as his nominee to whom the shares, the land and the buildings should be transferred after this death. By virtue of this nomination the plaintiff claims to be the owner of the entire property consisting of shares, land and building, He also claims possession from the defendant by virtue of the said ownership and on the ground that the defendant was in occupation of the property by virtue of a licence granted by the father and that the same had been terminated.

2. It is admitted that the property is that of the father Vishnu. At the time of his death all the heirs. At the time of his death all the heirs of vishnu became interested in the estate and in ascertainment of what property goes to whom on his death. The suit, therefore, could not have been filed without all the heirs being on record inasmuch as the suit really involves a question of title to the property of the deceased. The suit, therefore, ought to have been dismissed on that ground alone. However, other points hereinafter decided have been argued exhaustively on both sides and it is but fair that I should decide them also.

3. The plaintiff's contention is that by virtue of S. 30 of the Maharashtra Co-operative Societies Act, 1980 r./w. Rule 26 framed under the said Act and Bye-law 16 (1) of the society a nominee acquires title to the shares and the property to the exclusion of all the heirs of the deceased and that with the resuit the plaintiff has become owner of the property and the defendant has not title or interest in the property and is liable to be evicted. It is contended that in any event the nomination paper having been witnessed by two witnesses and all the other formal requirements of a will having been complied with it should be treated as a will and in that circumstance also the plaintiff becomes the exclusive owner of the property and as such entitled to evict the defendant.

4. Section 30 of the Maharashtra Co-operative Societies Act, 1960 reads as follows:-

'30. (1) On the death of a member of a society, the society shall transfer the share or interest of the deceased member to a person or persons nominated in accordance with the rules, or, if no person has been so nominated to such person as may appear to the committee to be the heir of legal representative of the deceased member?

Provided that, such nominee, heir or legal representative, as the case may be, is duly admitted as a member of the society;

Provided further that, nothing in this sub-section or in Sec. 25 shall prevent a minor or a person of unsound mind from acquiring by inheritance or otherwise, any share or interest of a deceased member in a society.

(2) Notwithstanding anything contained in sub-section (1) any such nominee, heir or legal representative, as the case may be, may require the society to pay to him the value of the share or interest of the deceased member, ascertained in accordance with the rules.

(3) A society may pay all other moneys due to the deceased member from the society to such nominee, heir or legal representative, as the case may be.

(4) All transfers and payments duly made by a society in accordance with the provisions of this section shall be valid and effectual against any demand made upon the society by any other person.'

5. Rule 25 of the Maharashtra Co-operative Societies Act, 1961 reads as follows:-

'25, Nomination of persons :- (1) for the purpose of transfer jof his share or interest under Sub-section (1) of S. 30 a member of a 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 lifetime 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) (I) Where a member of a 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 or 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 of the legal representative of the deceased member and proceed to take action under S. 30.'

Bye-law 16 of the Housing Society reads as follows:-

'16. Transmission of Interest:

(1) How nomination is to be made:- A member may, by a writing under his hand deposited with the Society during this life time or by statement made in any book kept thereat nominate any person to whom under Sec. 22 of the Act his share or interest in the Society or so much thereof as is specified in such nomination shall be transferred at his decease, of the moneys referred to in S. 22(2) of the Act or so much there of as is specified in such nomination shall be paid.

(2) How it is to be revoked or varied :- A nomination so made may be revoked or varied by any similar writing or statement under the hand of the nominator deposited or made as aforesaid.

(3) Fees on Nomination of Revocation :- a nomination made at the time of applying for membership shall be recorded free of charge. But for the recording of every nomination subsequently made or of a revocation or variation a fee or annas four shall be paid.'

6. However, what Is important is the section and not the rules and bye-laws inasmuch as the rules and bye-laws cannot provide any thing contrary to the section. It is very clear on the plain reading of the section that the intention of the section is to provide for who has to deal with the society on the death of a member and not be create a new rule of succession. The purpose of the nomination succession. The purpose of the nomination is to make certain the person with whom the society has to deal, and not to create interest in the nominee to the exclusion of those who in law will be entitled to the estate. The purpose is to avoid confusion in case there are disputes between the heirs and legal representatives and to obviate the necessity of obtaining legal representation and to avoid uncertainties as to with whom the society should deal to get proper discharge. Though, in law, the society has no power to determine as to who are the heirs or legal representatives, with a view to obviate similar difficulty and confusion, the section confers on the society to determine who is the heir or legal representative of a deceased member and provides for transfer of the shares and interest of the deceased member's property in such heir or legal representative. Nevertheless, the persons entitled to the estate of the deceased do not lose then right to the same . Mr. Naik contends that once a person is nominated and the society transfers the share or interest of the deceased to him, he becomes the owner. If that is to be accepted it will follow that if a society accepts a person as the heir or legal representative and transfers the share or interest to him, that person will become the owner. That, obviously, cannot be the intention of the legislature. Society has no power, except provisionally and for a limited purpose to determine the disputes about who is the heir or legal representative. It, therefore, follows that the provision for transferring a share and interest to a nomince or to the heir or legal representative as will be decided by the society is only meant to provide for interregnum between the death and the full administration of the estate and not for the purpose of cantering any permanent right on such a person to a property forming part of the purpose of conferring any permanent right on such a person to a property forming part of the estate of the deceased. The idea of having this section is to provide for a proper discharge to the society without involving the society into unnecessary litigation which may take place as a result of dispute between the heirs or uncertainly as to who are the legal heirs or representatives. This being the position, the contention of Mr. Naik cannot be accepted. Even when a person in nominated or even when a persons is recognised as an heir or a legal representative of the persons who are entitled to the estate of the interest of the deceased member by virtue law governing succession are not lost and the nominee or the heir or the legal representative recognised by the society, as the case may be hold the share and interest of the deceased for disposal of the same in accordance with law. It is only as between the society and the nominee or heir or legal representative that the relationship of the society and its member is created and this relationship continues and subsists only till the estate is administered either by the person entitled to administer the same or by the Court or the rights of the heirs or persons entitled in the estate are decided in a Court of law. Thereafter the society will be bound to follow such decision. The plaintiff, therefore, cannot be said to have become the owner of the property qua the other heirs merely by virtue of the nomination.

7. Mr. Naik relies on an unreported judgment dated 15-6-1976 of Hajarnavis and Shah, JJ, in Appeal No. 694 of 1968. Poona Hindu Middle Class Co-operative Society- Ltd., v. Jaywant Vishnu Sapre. Based on this judgment he contended that it is the right of the society to decide who is to be the member of the society and once the society has decided to take the nomince as the member or to take one of the heirs as the member, the hairs of other heirs of the deceased member, as the case may be, cannot have any cause of action in respect of the property allotted by the society to a member.

(A) In the judgment cited the appellant was a society of which one Vishnu Sapre was a member. The name of the deceased in the present appeal also happens to be Vishnu). He had obtained on a lease a separate sub-plot of land from the society after becoming a member thereof, By it registered Will dated 19-9-1939, he bequeathed the said plot to his two sons jaywant and Ramchandra. He appointed three executors and also created a trust of which the executors were trustees. The executors applied for a probate which was granted by the District Court, Poona, on 23-11-1940. The executors also made an application to the society on 23-1-1942 referring to the Will and the two sons being the legatees and the fact of the plot having been bequeathed to his two sons. The executors also requested and applied for Jaywant being substituted as a member of the society in place of the deceased. The society by its resolution dated 7-2-1942 elected Jaywant as its member. Because of certain breaches of the bye-laws of he society which required construction to be put up by a particular time, the plot was forfeited to the society and the lease was cancelled. A dispute arose which was referred to the statutory arbitration and the registered nominee gave an award in favour of the society. The other brother Ramchandra was not a party to these proceedings. Ramchandra filed a suit from which the said appeal arose in the Court of Civil Judge, Junior Division, Poona, challenging the award mainly on the ground that he was not made a party to the proceedings before the arbitrator even though he was entitled to the plot as a legatee under the will. Decree was passed against the society which was society it was contended that (1) disposition of the plot made by Vishnu was not binding on the society (2) the executors of the will themselves made an application to substitute the name of jaywant in place of Vishnu and the society had acted on the basis thereof (3) that in accordance with the bye-laws of the society as well as provisions of Sec. 27 of the Bombay Co-operative Societies Act, the transfer in favour of Jaywant made by the society was valid and effective against the plaintiff who was not a member of the society. Other pleas were also raised. It was further contended un behalf of the appellant that (I) of passing of the resolution by the society it was only lay want who had a right to the property and that Ramchandra had no right in respect of the property, (ii) without being member be cannot claim any right against the society; (iii) his claim was barred by the law of limitation and (iv) Ramchandra can claim as a legated under the Will only against Jaywant and not against the society.

(B) It is held by the learned Judges that it is the executors who had asked the society to recognise jaywant as a member of the society in place of Vishnu and so it was not open to the plaintiff to challenge the action taken by the society on this application without challenging the authority of the executors to make the application. This was the main ground for deciding against Ramchandra. Thereafter Sec. 27 of the Bombay Co-operative Societies Act, 1925, is set out and after pointing out that Vishnu had not made any nomination, it is observed that the society was free to transfer the share or the interest of the deceased to any of the heirs or legal representative after electing him as the member of the society to take jaywant as a member had not been challenged. It is then observed that the society was therefore right in recognisingonly jaywant as a member of the society. Section 19 of the said Act is then set out and it is observed that the transfer of any property of the society is not governed by the ordinary law but by the provisions of the bombay Co-operative Societies Act. 1925 and the rules and bye-laws framed by the society. It is stated that being the get any title to the suit property. It is observed that even if Ramchandra had half share in the property of the society be cannot enforce the claim against the society without being elected as a member of the society. It is emphasized that the executors had not moved the society for recognising him as a member of the society and, therefore, whatever claim that Ramchandra had he can enforce it only against the executors. Reliance is then placed on a judgment of the Delhi High Court in the Chief Commr. V. Mrs. Kitty Puri, : AIR1973Delhi148 , wherein it is, inter alia, observed. '.........In fact, even the society cannot transfer the share or interest of a deceased member to a nominee is duly admitted to be a member of the society' He does not automatically succeed to the share or interest of the deceased member. The reason is that the membership is a contract between the member and the society. It is not an interest which can be inherited by the nominee of the successor from the deceased member without reference to the society.

(C) The judgment then proceeds to say that in view of the fact only a member can claim interest in the property, the plaintiff had no cause of action against the society.

8. The ratio of the judgment therefore is that it is only a person who is a member of the society that can claim a right against and in respect of the property of the society. However, the right of a society to admit a person of its choice as a member cannot be exercised arbitrarily and so as to deprive a person of his right to the shares or property of a deceased member. The law does not give a right to the society to continue as member or to refuse membership to a person who is entitled to become a member. To put it differently, a society cannot arbitrarily refuse to make person a member. It is for this very reason that the provision is made in the Co-operative Societies Act for an appeal to the Registrar in case society refuses to accept any person as a member. Therefore in my view, this judgment does not take any view which is contrary to the view that I am taking. To repeat a society has a right to admit a nominee of a deceased member or an heir or legal representative of a deceased member as chosen by the society as the member. A person who disputes the right of such person to be a member or continue to be a member of the society will have to obtain relief in the normal or continue to be a member of the society will have to obtain relief in the normal Court aginst such person and have his rights ascertained and declared and thereafter apply to the society on the basis of the Court judgment to make him a member of the society. In case society refuses, that person will have to take appropriate proceedings against the society's refusal. In the case cited before me the plaintiff had taken resort to Court against society with out making any application for membership. Moreover the plaintiff's claim was under a Will and when there is a will in which executors are appointed the property vests in the executors and therefore it is the executor alone who can represent the estate. It the executors request the society to make somebody a member, the remedy of the person objecting will be only against the executors. It is in the light of this legal position that the learned Judges came to the conclusion they did. It cannot be, that the Act dealing with the regulation of the Co-operative Societies is intended to lay down a new rule of succession which will again be dependent on the sweet wil of the society or to deprive a person to part of the estate or to give to the society a right to pick and choose from among heirs who should inherit the property of the deceased except provisionally. Take the case of legal representatives. The Act gives right to the society to accept an heir or a legal representative as a member. It is the society which has to select which of the legal representative as a member. It is the society which has to select which of the legal representatives it will take as a member. Executors are legal representatives. It cannot be the intention of the legislature that an executor, who may not be even a legatee, should get the share or interest of the deceased member to the exclusion of the legatee on whom the share or interest may have been bequeathed or to exclude residuary legatee, in the absence of specific bequest thereof.

9. Mr. Naik contends, in the alternative, that the nomination which is described as 'Varas Patra' is singed by the deceased and witnessed by two persons. It, therefore. Complies with all the requirements of a valid Will and should be construed to be a Will. He contends that even though it may be described as a nomination paper i.e., 'Varas Patra' looking to the tenor thereof, it is really a will. This contention of Mr. Naik is without any substance. It is well settled that a document can be said to be a Will only when it is executed with an intention to regulate succession after death. There must be animus testandi. It is true that in construing a document. The nomenclature given to the document is not to be given too much importance and what is of importance is that intention as disclosed by contents and surrounding circumstances. However, in the present case the nomenclature completely corresponds to the contents and the intention and by no stretch of imagination this nomination from can be said to be a will. The only similarity between a will and this nomination form is that a Will has to be witnessed by two persons and the nomination paper is witnessed by two persons. The law permits the nomination of such number of persons as a member may desire and requires witnessing only be one perons. The nomination from in the present case is a cyclostyled from which is issued by the society. This form which is issued by the society. This form has been drafted by the society obviously prior to the Act of 1960. The form refers to various provisions of law and bye-laws which clearly are meant for nomination and it is stated that this document was bring executed in accordance with these provisions. It is, therefore, clear that the intention of the deceased in signing this nomination from was not to make a will or to provide for succession after this death but only to nominate in accordance with the law prevailing. The form, by mistake or otherwise in the footnote says that the nomination can be in favour of one person only, though this is clearly contrary to law, The form has column for two witnesses. It is obvious that it is because of this column that the signatures of two witnesses have been taken though only one witness required in law. The intention was not to take signatures of the two witnesses to make this document a Will. It is also possible that because of this footnotes that the deceased nominated only one person and not more. In this view of the matter it is not possible to hold that the document is a Will of the deceased and in any event looking to the possibility that the deceased was misted by the footnote it cannot be said to be a true Will.

10. Mr. Lalit for the appellant contends that in any event there could not have been any nomination in respect of the structure pur up by the deceased. The society interest is confined only to the shres and the land i.e., the deceased had a share or interest, qua the society, only in the shares and the land and, therefore Sec 20 providing for nomination can apply only to the shares and the land and the title, if any conferred on the plaintiff will be in respect of the shares and the land and not the structure. The structure will continue to belong to the estate and devolve in accordance with law. He points out that it was a mistake on the part of the society to include in the form, the structure also. The contention of Mr. Lalit has to be accepted. It is well settled that in India ownership of land and the building can be separate unlike in England. The relationship only in respect of shares in and the property of the society. Therefore, a nomination is permitted only in respect of the share in and the property of the society. The society is concerned only with the shares held by a member and the land given by it to a member and not with the structure that a member may put up. The member's interest in the Society. The nomination in respect of this structure is, therefore invalid and of no effect. Even if I had held that the plaintiff became entitled in this own right , to the shares and the land by virtue of nomination be can in no circumstances become entitled to the structure which must continue with the estate of the deceased and in that view of the matter the defendant can never be a mere licensee and cannot be evicted. The defendant will be equally entitled to the structure as the plaintiff along with other heris.

11. In the circumstances, the appeal is allowed. The decree of the learned trial Judge is set aside, The suit is dismissed. The plaintiff-respondent will pay the costs of the suit as well as of this appeal.

12. Appeal allowed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //