Will is more important than ‘nominee’
Adv. Rohit Erande
Inheritance Law or Nomination
The question always arises whether there is a ‘nominee’ (nominee) owner in house, land, shares, funds, banks. A ‘nominee’ is merely a trustee or is called a ‘caretaker’ or ‘temporary trustee’. The Bombay High Court has time and again held that nomination is not the third law of succession along with Will and Succession Act. However, disputes in this context are still fought in court.
Against this backdrop, the Bombay High Court has once again clarified the law in this context by giving an important judgment in the case of “Karan Khandelwal v. Vaikunth Co-operative Society” last month. It will benefit the society and the members.
Let’s briefly look at the background of this case. Mannalal Khandelwal was the owner of flat number one. He named his grandson (petitioner) as ‘nominee’ in 2004. This application was accepted by the society and filed in the register. Original member Mannalal Khandelwal died in January 2011. He had not made any will. At the time of his death he had three heirs viz., two sons (respondents) and the son of the pre-deceased son i.e. grandson. The society admitted the names of the petitioners as members on the basis of earlier ‘nomination’. But the uncle of the petitioners applied to the society for membership and ownership of his two-thirds undivided share. However, the society rejected the application and the matter went to the Deputy Registrar. As these heirs have two-thirds of the inheritance rights, the Sub-Registrar ordered the same to be entered in the membership records in proportion to the ownership rights of each inheritance. Finally the case reached the High Court.
The High Court heard the arguments of both the sides and considered the law and previous judgments on the matter and gave the result. For this, the famous judgment of the Supreme Court in 2016 ‘Indrani Wahi v Society Registrar West Bengal’ was taken as a basis. In it, the Supreme Court while simplifying the work of the societies has mentioned that, ‘After the death of the original member, not the society has the right to decide the heir, but only the court. Society should transfer shares only in favor of ‘nominee’ person. The other heirs should go to the competent court and determine the right of ownership.’ In this background, the gist of the judgment given by the High Court is as follows.
■ It is necessary for the society to grant membership as per ‘nomination’ made by the original member. ‘Membership’ and ‘ownership rights’ are two different things and this has been held by the courts time and again. The member has the right to appoint a ‘nominee’. So a legal heir may be designated as a ‘nominee’, but a nominated ‘nominee’ is not necessarily a legal heir.
■ Disputes regarding ‘nominees’ or heirs should be resolved by the concerned persons in a competent court.
■ As per the new provision in Section 154 (B) 13 as amended in the Co-operative Act from 9th March 2019, after the death of a member, through will, inheritance rights certificate, family arrangement or ‘by nomination’ and in the absence of ‘nomination’, the person who appears to be the heir. Names can be subscribed. However, if any dispute arises between the heirs, the nominees can be given provisional membership until the names of the other heirs established by the court are filed. A new provision for provisional membership appears to have been introduced by this amendment. The same provision further states that if a member has not made a ‘nomination’, the society committee may, after due process, grant such provisional membership to a person who, in their discretion and opinion, may be the legal heir.
■ Other heirs competent by giving such judgment
Ordered to give temporary membership to the petitioner ‘nominees’ till the inheritance certificate is brought from the court. So once again ‘nominee is not the owner and after the death of the original member the ownership right in the property vests in his heirs first through will and in the absence of the right of inheritance.
(The author is a legal expert)
Judgement dt 2022-11-10 Bombay High Court.
The fallout of this is that sale of property can be done only by lawful owner, established by a competant court, and not by mere nominee.
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