Nominee or Legal Heir: Who Gets The Cooperative Housing Society Flat?

The Bombay High Court recently clarified the legal standing of a nominee versus legal heirs in a dispute over a flat in Mumbai. This case, Karan Vishnu Khandelwal v. Hon’ble Chairman/Secretary Vaikunth (Andheri) Cooperative Housing Society Ltd. & Ors. (Writ Petition No. 12468 of 2022 dated 10 November 2022), highlighted the complexities surrounding property inheritance within cooperative housing societies.

Case Background

The deceased, MK, was the owner of a flat in a cooperative housing society in Mumbai. During his lifetime, MK had nominated his grandson VK as the nominee for the flat, and this nomination was duly recorded in the society's register. MK passed away intestate (without a will), leaving behind two sons, RK and KK, and his grandson VK, whose father was MK's predeceased son.

Following MK's demise, RK obtained a no-objection declaration from his brother KK and claimed a 2/3rd share in the flat. He sought the transfer of this proportionate interest from the housing society. However, the society rejected RK's application, citing the Supreme Court's ruling in Indrani Wahi v. Registrar of Cooperative Societies (Civil Appeal 4930/2006). This ruling held that while a cooperative society must recognize a valid nomination, the nominee does not become the owner but holds the property in trust for the legal heirs.

Legal Provisions

The case also examined Section 154B-13 under Chapter XXIII-B of the Maharashtra Cooperative Societies (Amendment) Act, 2019, which became effective on 9th March 2019. This provision is clear in stating that a nominee acts as a trustee for the legal heirs and does not automatically gain ownership rights.

Court's Decision

In the current case, the Bombay High Court directed the society to transfer the flat to VK in his capacity as the nominee and admit him as a provisional member. This arrangement was to remain until RK obtained a succession certificate, legal heirship certificate, or testamentary document.

The court emphasized that a nominee holds the property in trust and cannot acquire ownership rights solely based on the nomination.

This ruling reaffirms the distinction between a nominee and a legal heir, ensuring that the property rights of legal heirs are protected while maintaining the administrative role of the nominee within cooperative societies.

Citations

1. Indrani Wahi v. Registrar of Cooperative Societies (Civil Appeal 4930/2006)
2. Karan Vishnu Khandelwal v. Hon’ble Chairman/Secretary Vaikunth (Andheri) Cooperative Housing Society Ltd. & Ors. (Writ Petition No. 12468 of 2022, dated 10 November 2022)
3. Maharashtra Cooperative Societies (Amendment) Act, 2019