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Ashok Chandra Aggarwala Vs. Delhi Administrative and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 29 of 1976
Judge
Reported inILR1985Delhi796; 1985RLR432
ActsDelhi Cooperative Societies Act, 1972 - Sections 26
AppellantAshok Chandra Aggarwala
RespondentDelhi Administrative and ors.
Advocates: Harjinder Singh and; Jitendra Sharma, Advs
Cases ReferredGopal Vishnu Ghatnekar v. Madhukar Vishnu Ghatnekar
Excerpt:
delhi co-operative societies act, 1972 - section 26 read with bye-law 16--transfer of share of deceased member to a nominee-does not create interest in such person to the exclusion of other heirs--society is under no obligation to transfer the interest of the deceased member to a nomine--share of the deceased only can be transferred to the nominee.;the petitioner's father was a member of a co-operative housing society and on his death, the petitioner sought substitution of his name in place of his late father. for the proposes of transfer of his share the father had nominated the petitioner in accordance with rule 35 of the delhi co-operative societies rules. substitution/mutation was refused on the ground that petitioner should produce a succession certificate as other heirs had..........member ascertained as aforesaid; in the case of a co-operative society with limitedliability, the society 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 one month of the deceased member so any person specified in the application who is so qualified; no such transfer or payment shall be made except with the consent of the nominee, heir or legal representative, as the case may be. a co-operative society shall, subject to the provisions of section 36 and unless with (,in) six months of the death of member prevented by an order ofa competent court, pay to such nominee, heir or legal representative, as.....
Judgment:

Charanjit Talwar, J.

(1) The petitioner, Shri Ashok Chandra Aggarwala, seeks issuance of a writ of mandamus to the Delhi Administration to substitute his name in place of the name of his late father in the sub-lease executed between hisfather, the President of India and the Supreme Court Bar Cooperative House Building Society Ltd. (hereinafter called 'the Society').

(2) Admitted facts are that the petitioner's father Shri C. B.Aggarwala, a Senior Advocate of the Supreme Court, was a member of the Society. The Society is covered by the Delhi Co-operative Societies Act, 1972, (hereinafter called 'the Act')and the Delhi Co-operative Societies Rules, 1973 (hereinafter called 'the Rules') as well as by the bye-laws framed by the Society. Shri C. B. Aggarwala was allotted plot bearing No. A-25, Niti Bagh, New Delhi, by the Society. For the purpose of transfer of his share he had nominated the petitioner herein inaccordance with Rule 35 of the Rules. Shri C. B. Aggarwala died on 13/06/1973.

(3) By a resolution dated 16/05/1975, the Socie.ty passed a resolution substituting the petitioner as a member of the Society in place of his late father and resolved 'that the name of Shri Ashok Chandra Aggarwala, nominee of late Shri C. B.Aggarwala be substituted in place of Shri C. B. Aggarwala asa member of the Society and as a sub-lessee of plot No. A-25,Ni'ti Bagh, New Delhi. A copy of the resolution be sent to Shri A. C. Aggarwala, to the Lessers and to other heirs who wrote letters to the Society'.

(4) It appears that the petitioner had in title meanwhile moved the Delhi Administration, respondent No. 1, the substitution in his name in the said sub-lease. He had also moved the Assistant Housing Commissioner, L&B;, Delhi Administration,vide his application dated 21/02/1975, for this purpose. However, he was informed by letter dated 5/03/1975, to produce the succession certificate from a Civil Court Administration & Others of competent jurisdiction so that further action could be taken in the matter. A copy of the said letter is Annexure 'E' to the writ petition. His plea before the authorities was that as a nominee he was entitled not only to the share which his father had but also to the interest of the deceased. Petitioner's efforts to have the transfer of plot in question made in his name havingfailed, he has moved the present petition.

(5) Mr. Harjinder Singh, learned counsel for the petitioner,submits that in accordance with the provisions of section 26 of the Act read with Rule 35 of the Rules petitioner's name is to be mandatorily substituted in place of his father's name.It is useful to quote the provisions of section 26. Section 26 reads:

'26. (1) On the death of a member a co-operative society may transfer the share or 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 personas may appear 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 suchmember's share or interest as ascertained in accordance with the rules or bye-laws;Provided that

In the case of a co-operative society with unlimitedliability, 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;

In the case of a co-operative society with limitedliability, the society 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 one month of the deceased member So any person specified in the application who is so qualified;

No such transfer or payment shall be made except with the consent of the nominee, heir or legal representative, as the case may be.

A co-operative society shall, subject to the provisions of section 36 and unless with (,in) six months of the death of member prevented by an order ofa competent court, pay to such nominee, heir or legal representative, as the case may be, ail other moneys due to the deceased member from the society; All transfers and payments made by a co-operative society in accordance with the provisions of this section shall be valid and effectual against any demand made upon the society by any otherperson'.

(6) Another plea of Mr. Harjinder Singh is that under the guidelines laid down by the Delhi Administration the said plot has to be inherited by the petitioner by virtue of the nomination made by his father and in such a case no fresh lease-deeds required to be executed but only mutation is to be sanctioned in favor of the petitioner. The respondent 1 and 2 in their counter-affidavit have submitted that it is because of the objection raised by the other legal heirs of late Shri C. B.Aggarwala that the substitution in favor of the petitioner has not been made by them. In a further affidavit sworn by ShnD. R. Chopra, Osd, Litigation-cum-ex-officio Under Secretary,Land & Building Department, on 19/09/1984, it has been explained that the father of the petitioner had initially nominated two persons when he made the application to (heSociety for membership. After becoming a member of the Administration & Others Society he made a fresh nomination in the name of the petitioner, which has been recorded in the register of the society.It is further pleaded that clause Iii of the Perpetual sub-leasedeed, which had been executed, provided that 'the expression'sub-lessee' included' his heirs, executors, administrators or legal representatives and the person or persons in whom the sub-leased interest created by a sub-lease shall for the time being be vested by assignment or otherwise. .', and, thereforee,as the other legal heirs of the deceased had claimed that they also be substituted in place of the deceased, the legal adviser of the department opined that in a case like this it was advisable to ask the contestants to obtain succession certificate from a Civil Court. As such, respondents are unable to substitute the petitioner's name in the sub-lease or sanction mutation in his name.

(7) I may note here that on an application made two of the legal heirs of late Shri C. B. Aggarwala (being his son anddaughter) under Order 1 Rule 10 (2) of the Code of CivilProcedure, those were brought on the record by an order dated 21/09/1977. They are respondents 4 and 5. These very respondents had raised objection before the Administration that the petitioner was not entitled to be substituted in thesub-lease deed.

(8) The submission, of the petitioner's counsel .is that thesub-lease qua the plot in question being interest of the deceased is liable to be transferred in favor of the petitioner, as noticedabove, in terms of section 26(1) of the Act.

(9) I have already quoted the relevant section. It opens with the words 'On the death of a member of a co-operative society may transfer the share or interest of the deceased member to the person nominated. . . .'. The argument that it was mandatory to transfer the share is not borne out from a reading of the above provision as the use of the word 'may'' therein is suggestive of this being a discretionary power which has been vested in the Society. The Society in its bye-laws has vested itself with the power to transfer the share only of the deceased and not his interest. Bye-law No. 16 provides 'Every member may nominate a person or persons to whom on death his shares shall be transferred but no member may nominate more than one person, unless he holds more than one share and in case unless the amount to be paid to such nominees,whether by way of whole shares or by fixed proportion of the amount available for transfer, as the case may be, is duly specified when the nominee is appointed and he shall attest the nomination by putting his signature or thumb impression in the register Of members. If not admitted to membership the nominee or nominees shall be paid the shares of the deceased,and if there is more than one nominee, the amount to be deducted shall be set off against the amount due to each nominee in proportion to their interest'.

(10) The petitioner had undoubtedly been admitted to the membership of the Society vide resolution dated 16/05/1975, but that entitles him only to the automatic transfer of share as per the bye-laws. A reading of the guidelines issued by the Delhi Administration, relied upon by Mr. HarjinderSingh, in support of his contention, does not show the authority of law under which the same were issued. Learned counsel for the parties were unable to point out to any provisioning the Act and the Rules whereunder such guidelines can beissued. It is not necessary fee me in this case to go into the validity of the guidelines as the guidelines themselves show that in spite of the nomination a plot could be inherited under a will or on devolution under law. Three eventualities seem to have been kept in view for sanctioning a mutation in therecord, in case a sub-lease deed had been executed during the lifetime of the deceased. Those are, by virtue of nomination form or a will or by devolution under law. The nomination by itself has not been made the sole criterion for the sanction of mutation in the name of a nominee. In the present case as the other legal heirs have objected to the mutation or substitution in favor of the petitioner, it is open to the respondents to ask the petitioner to get a succession certificate. Rule 35referred to by Mr. Harjinder Singh only lays down the method of nomination by a member for the purpose of transferring his share and interest under sub-section (1) of section 26. As noticed earlier that section does not lay down that a society is obliged to transfer the interest of the deceased member to a nominee.

(11) Reliance by Mr. Harjinder Singh on Gopal Vishnu Ghatnekar v. Madhukar Vishnu Ghatnekar, : AIR1982Bom482 , in support of his contention is mis-conceived.Section 30 of the Maharashtra Co-operative Societies Act,1961, which was being considered by the Bombay High Court opens with the words, '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,. - '. On the face of it, thereforee, there is difference between section 26(1) of the Delhi Act and section 30 of the Maharashtra Act, as in the latter provision the word 'shall'has been used whereas in the Delhi Act the word 'may' has been used. In the context of the present Act it is not obligatory on the Society in view of the bye-laws to transfer the interest of the deceased share-holder in favor of the nominee.The Society, it appears, has recommended to the Administration and the Delhi Development Authority, to transfer the interest in favor of the petitioner; but that recommendation is not binding on the Lesser, particularly in view of clause 12 of the sub-lease deed which lays down that the expression 'sublease' includes all the legal heirs.

(12) There is another aspect which has been pointed out byMr. Jitendra Sharma, learned counsel for respondent? 4 and 5.According to him. there is no warrant for assuming that section 26 of the Act creates a kind of succession which could be styled as a 'statutory' testament'. The precise submission is that on the death of a member of a society, his estate, which obviously includes an interest in the sub-lease executed during hislife-time, is governed by the law of succession applicable to him.Such a succession can be testamentary or intestate. In support of his proposition he has relied upon Smt.Sarbati Devi and another v. Smt. Usha Devi, : [1984]1SCR992 . In the said case, section 39 of the Insurance Act was being construed. The question was whether a nominee of a life insurance policy under section 39 of that Act on the assured dying intestate would become entitled to the beneficial interest in the amount received under the policy to the exclusion of the heirs of the assured. While over-ruling the two recent decisions ofthis. Court, it was held that that a mere nomination made under section 39 did not have the effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the assured. It was observed'the' nomination only indicates the hand which is authorised to receive the amount, on the payment of which the insurer gets valid discharge of its liability under the policy. The amount,however, can be claimed by the heirs of the assured in accordance with the law of succession governing them'.

(13) I agree with Mr. Sharma that the above principle can safely be applied in the present case as a third kind of succession cannot be created under section 26 of the Act.

(14) In view of my discussion above I hold that the Delhi Administration is well within its rights to decline the request of the petitioner.

(15) The result is that the writ petition is dismissed but with no order as to costs.


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