Nomination in a housing society after 2019 — a nominee is admitted provisionally, not as owner

Many members believe that the nomination form decides who gets the flat. It does not. For a long time the society's duty on a member's death was read from section 30 of the Maharashtra Co-operative Societies Act, 1960 and rule 25 of the 1961 Rules. For housing societies that has changed. Chapter XIII-B, inserted with effect from 9 March 2019, now carries the rule in section 154B-13, and the Bombay High Court has recorded that section 30 no longer applies to housing societies. This note reads what the new section says, what the courts have made of it, and how a committee can handle a death claim.

What section 154B-13 says

On the death of a member, the society transfers the share, right, title and interest of the deceased to a person or persons on the basis of one of five things:

• a will or other testamentary document;
• a succession certificate;
• a legal heirship certificate;
• a document of family arrangement executed by the persons entitled to inherit; or
• a person duly nominated in accordance with the rules.

Two provisos follow. First, the society admits the nominee as a provisional member until the legal heir or heirs, or the person entitled under succession law or a will, are admitted in place of the deceased. Second, where nobody was nominated, the society admits as a provisional member the person who appears to the committee to be the heir or legal representative, in the manner prescribed.

Nomination, will and legal heirs are three different things

A nomination is an instruction given to the society during the member's life. It tells the society whom to deal with after death. A will is the member's direction about who is to inherit the property, and it takes effect on death. Legal heirs are the persons who inherit under the personal law that applies to the deceased, to the extent there is no will, or the will does not cover the property.

Section 154B-13 uses all three. The nominee is admitted provisionally, and the person entitled under a will or succession law is admitted in the deceased's place. In Khandelwal, noted below, the Bombay High Court summarised the Supreme Court's position in this way: a valid nomination binds the society, but it does not make the nominee the owner. The nominee holds the property in trust for the legal heirs, who can approach the appropriate court to establish their share. Once they obtain the relevant order, the society is bound to transfer the flat and shares in their names.

What the courts have said

• Karan Vishnu Khandelwal v. Vaikunth (Andheri) Co-operative Housing Society Ltd., Bombay High Court, 9 November 2022 (Writ Petition No. 12468 of 2022). A nominee whose nomination the society had recorded was to be admitted as a provisional member, and the other claimant could be called on for a succession certificate, legal heirship certificate or testamentary document.
• Indrani Wahi v. Registrar of Co-operative Societies, Supreme Court, 10 March 2016 (Civil Appeal No. 4930 of 2006). This arose under the West Bengal Co-operative Societies Act, 1983, not the MCS Act. The Court held that the society must act on a valid nomination, but that this has no bearing on title as between the inheritors, who remain free to pursue succession in law.
• Bima Nagar Co-operative Housing Society Ltd. v. Divisional Joint Registrar, Bombay High Court, 23 September 2024 (Writ Petition No. 10768 of 2024). The deceased member's children had executed a deed of relinquishment in favour of their mother. The Court held that "family arrangement" in section 154B-13 is not confined to a Hindu Undivided Family, and that such a deed was a family arrangement under the section.

A death claim, step by step

A reading aid, not a prescribed procedure. Check it against the registered bye-laws.

• Step 1: Note the death. Ask for the death certificate and record the date.
• Step 2: Check the nomination register. As published, rule 26 of the 1961 Rules requires the name and address of every nominee, and any revocation or variation, to be entered in the register kept under rule 32. Look there and in the member's file.
• Step 3: Nomination found. Place it before the committee. Resolve to admit the nominee as a provisional member under the first proviso, and minute it in those words.
• Step 4: No nomination. The second proviso applies. As published, rule 25(3) provides for a public notice at the society's office inviting claims or objections within a stated time, and a decision by the committee after inquiry. That rule was framed by reference to section 30, so confirm its current text before relying on it.
• Step 5: Ask for the paper that decides entitlement. A will, a succession certificate, a legal heirship certificate, or a family arrangement signed by those entitled to inherit. For a will concerning Mumbai property, probate is often needed. That question is separate from nomination.
• Step 6: Admit the entitled person. When the paper is produced, the committee considers the application for admission. If the society does not admit, the claimant can apply to the Registrar under section 22(2). In Bima Nagar the widow, first admitted provisionally, obtained a direction from the Deputy Registrar under section 22(2) to be admitted as a member.

Common mistakes by managing committees

• Treating the nominee as owner. In the minutes, the share-certificate entry and any no-dues letter, the nominee is a provisional member. Say so.
• Refusing a nominee because he or she is not a relative. Rule 25, as published, lets a member nominate "any person or persons". Under the former section 30 the Bombay High Court held, in Om Siddharaj Co-operative Housing Society v. State of Maharashtra (24 June 1998), that a society could not refuse a valid nominee on that ground. Section 154B-13 makes no mention of relationship.
• Deciding between rival heirs. The section lets the society act on documents. It does not make the committee a court of succession.
• Charging a transfer premium on a transmission after death. The Government's Housing Manual (2012) states that a transfer premium is not necessary for a deceased member's transfer, and a published FAQ on model bye-law 38 says the same for a nominee or legal representative. Check the current circular and the society's bye-laws.
• Losing the nomination. A nomination made by document must be deposited with the society in the member's lifetime. Keep the register complete.

Questions members ask

• Can I nominate someone outside the family? Rule 25, as published, says "any person or persons".
• Can I change my nomination? Yes. A later nomination made in accordance with rule 25 varies or revokes an earlier one.
• Does a nomination override my will? Not on title. The society acts on the nomination only by admitting the nominee provisionally, and a will is itself a basis for transfer under the section.
• Does this apply to every society? Section 154B-13 sits in Chapter XIII-B, which deals with housing societies. Other kinds of societies are outside this note.

Note: This note summarises section 154B-13 as published in the Gazette of 9 March 2019, the Rules as published, and the reported decisions named above. It is not a certified copy or a list of citations for a paper book. Read the section, the judgments, the current Rules and the registered bye-laws before acting.

Source: YLA Cooperative Desk

Educational disclaimer: This note is educational reading from a YLA desk. It is not legal advice, not an opinion on any brief, and it does not create a lawyer–client relationship. Statutes, rules and judgments change. Read the text before you rely on a point made here.