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PREVAILING LAW RELATING TO THE TRANSFER AND TRANSMISSION OF SHARES ON THE DEATH OF A MEMBER  SHORTCOMINGS

November 14, 2022

 This  blog comes in wake of a judgment I came across of the Bombay High Court in the matter of  Karan Vishnu Khandelwal Omdham Cooperative Housing Society Ltd. Vs Deputy Registrar -K-West In this matter facts of the case were as under: Mannalal Surajmal Khandelwal (deceased) was owner of a flat no.1 and by virtue thereof, was entitled to share certificate. The deceased during his lifetime registered a nomination in the name of Petitioner- his grandson. The nomination was acknowledged by the managing committee of the society in it’s meeting held on and made an entry in the nomination register. Mr. Mannalal Khandelwal died intestate on 20thJanuary, 2011, leaving behind, Rajendra Mannalal Khandelwal (Son- Respondent No.2); Krishnakumar Mannalal Khandelwal (Son); and Petitioner- son of Vishnu Mannalal Khandelwal (predeceased son of deceased). That upon demise of Mannalal Surajmal Khandelwal, Respondent No.2 – Rajendra M. Khandelwal, made an application to the society, inter alia, seeking transfer of membership and the share certificate in his name. Along with the application, he submitted a No Objection cum Declaration’ and indemnity bond made and executed by Krishnakumar Mannalal Khandelwal. This way, the Respondent No.2 claimed 2/3rdshare and interest in the flat and sought transfer of proportionate interest in flat and claimed membership. The application was rejected by the society on 8thAugust, 2018. Whereafter, the Respondent No.2 preferred an appeal under section 23 (2) of the Maharashtra Societies Act (‘MCS Act’ for short), being Appeal No. 09 of 2019 before the Deputy Registrar. The Petitioner sought intervention in the said appeal. The Intervention was allowed. The Deputy Registrar vide order dated 8thFebruary, 2021 allowed the appeal and held that since the Respondent No.2 has acquired 2/3rdright in flat No.1, to that extent, his interest be noted in the society record. In consequence, the Deputy Registrar acknowledged 2/3rdundivided right of the Respondent No.2 and 1/3rdundivided right of the Petitioner in flat No.1 and directed to make entries in the society records. In revision, the Divisional Joint Registrar upheld the order of the Deputy Registrar and dismissed the revision application of the Petitioner. Feeling aggrieved by that order, the Petitioner has filed this petition. MATTER BEFORE BOMBAY HIGH COURT WHEN ERROR OF LAW OCCURRED The matter when came up before the Bombay High Court, the court observed that Registrar passed the impugned order in haste may be at the behest of respondent No.2. Therefore, the impugned order not only suffers from gross irregularity being passed in breach of principles of natural justice but also against the law, and therefore, deserves to be quashed and set aside. While passing the Judgement Bombay High Court relied upon Indrani Wahi Vs. Registrar of Co-operative Societies (Civil Appeal 4930/2006), held that the cooperative society was bound by nomination made by the deceased and it was bound to transfer the shares to the nominee While passing the Judgment Hon’ble Court it relied upon the provisions of Section 154-B(2) of Maharashtra Cooperative Societies (Amendment) Act, 2019. In any event, by. It reads under:     “154-13. On the death of a Member of a society, the society shall transfer share, right, title and interest in […]

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MAHARASHTRA CO-OPERATIVE SOCIETY ACT LACUNAE ABUSE  OF POWER AN ANALYSIS AND SUGGESTIONS

October 5, 2022

“Nearly all men can stand adversity, but if you want to test a men’s character, give him power.” Said Abraham Lincoln This aptly applies to the Managing Committee of a society. Once the power comes neighbor becomes your Master. There are many incidents where the committee manipulates bills and contracts, and even in redevelopment cases three honorary office bearers Secretary, Chairman, and Treasurer have weightage in the finalization of the deal. We see litigations and stalling of projects of a housing society. Human tendency is such that they think of self-gain, instead of taking care and executing responsibilities that they have taken with utmost care and truthfulness. Corrupt minds see financial benefits in every deal. They forget that while doing this they prejudice the property and interests of other flat members. Election: 1 With the new election rules, an election is held similarly to the way in which how elections are held in any Assembly and Parliament. Cartel is formed and elections are won. It has killed the neighborhood’s love, respect, and honor. One family and one flat provision are also violated royally. Even if distant relatives or cousins have a cartel. This creates a monopoly in management. Suggestion: Like Multi Co-operative society, provide that same member or any other joint member from one flat cannot contest the consecutive election. The flat owners/member must take a break or drop out from the next election to give an opportunity to other flat owners/members. So, after serving for 5 years the said member/flat owner cannot contest election for immediate subsequent another term. This will reduce the monopoly of a few flat owners and their families, and their friends. For the convenience of the readers and lawmakers reproduced below is the provision of the Multi-State Cooperative Societies Act,2002 below which restricts reelection after two terms. Prohibition to hold the office of chairperson or president or vice chairperson or vice president in certain cases (1) No member of a board shall be eligible to be elected as the chairperson or president or vice-chairperson or vice-president of a multi-state cooperative society if such member is a Minister in the Central Government or a State Government. (2) No member of a board shall be eligible to be elected as the chairperson or president of a multi-state cooperative society, after he has held the office as such during two consecutive terms, whether full or part: Provided that a member who has ceased to hold the office of the chairperson or president continuously for one full term shall again be eligible for election to the office as such. Explanation:- where any member holding the office of the chairperson or president at the commencement of this Act is against elected to that office after such commencement, he shall for the purpose of this section, be deemed to have held office for one term before such election. Proposed Suggestion : A similar principle must be applied to the housing society. A.2 A Managing Committee was disqualified for 5 years, and an administrator was appointed. Managing Committee manages to suppress the facts from members of the society and manages that the […]

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SUCCESSION, TRANSFER, AND TRANSMISSION OF SHARES IN SOCIETY DIED INTESTATE BUT LEFT NOMINATION

September 6, 2022

SUCCESSION, TRANSFER, AND TRANSMISSION OF SHARES IN SOCIETY A peculiar case came up. The deceased a Hindu was a sole member of society. It was his self-acquired property. He dies suddenly without leaving a WILL. But the wife is a nominee. Out of wedlock, they have only one daughter who is major and unmarried. Wife applies for transmission of shares as per nomination. Shares are transferred by the society without any endorsement that it’s transferred in trust as a nominee or get succession certificate. Now this widow, gifts 50% share to her daughter. This happens when parties prepare documents without consulting a lawyer to save money on professional charges. I am saying this because the daughter has by succession 50% right in the property as a member died intestate without leaving a WILL. There was no need of executing the Deed of Gift. The twist is the case comes now, she applies for endorsement and transfer of 50% share ( which is otherwise there under the law) to the society. After several years Society takes opinion and now seeks a Succession Certificate. How far society is justified? We must first refer to bye-laws If there is a single nominee and if he demands payment of the value of Shares and interest of the deceased Member, in the capital/property of the Society, the Society shall acquire the same and pay him the value thereof as provided under the bye-law No.63. If, however, there are more nominees than one and if they demand payment of the value of the shares and interest of the deceased Member in the capital/property of the Society, the Society shall acquire the same and pay them value thereof as provided under the bye-law referred to above in the proportion mentioned in the nomination form. If no proportion is mentioned in the nomination form, the payment shall be in equal proportion. Bye-law 135 (v). The managing committee of the Society shall take necessary precautions to see that no injustice is done to any widow in the cooperative housing Society after the death of a Member before transferring the flat in her name. In such cases, Society shall verify the nomination form duly submitted by the deceased Member or succession certificate /heirship certificate obtained from the Civil Court under the Indian Succession Act 1925 or Will of the deceased Member duly probated by the Civil Court through the executor of the will. After verifying and taking legal guidance Society then only can take appropriate action within the time limit to avoid further legal complications. This procedure can be followed in all cases after the death of a Society Member Section 30 of Maharashtra Cooperative Societies Act, 1960 provides that: Section 30 – Transfer of interest on the death of a member (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 or legal representative of […]

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TRANSFER AND TRANSMISSION OF SHARES IN A COOPERATIVE HOUSING SOCIETY.

March 30, 2022

Today we are going to discuss unique issues relating to a housing society. Human beings when getting even a little bit of power, behave like King-Queen. This is normal psychology. Taking into consideration this psychology and jurisprudence every law is enacted. Now we shall deal with the questions individually WHAT ARE THE PROVISIONS AND REQUIREMENTS FOR THE TRANSFER/TRANSMISSION OF SHARES UNDER MAHARASHTRA CO-OPERATIVE HOUSING SOCIETY LAWS? ( MAHARASHTRA) Following are the relevant provisions of the Maharashtra Housing Society for transfer and transmission of shares and interest in the society. Open membership.— (1) No society shall, without sufficient cause, refuse admission to membership to any person duly qualified therefore under the provisions of this Act and its bye-laws. (1-A) Where a society refuses to accept the application from an eligible person for admission as a member, or the payment made by him in respect of membership, such person may tender an application in such form as may be prescribed together with payment in respect of membership, if any, to the Registrar, who shall forward the application and the amount, if any so paid, to the society concerned within thirty days from the date of receipt of such application and the amount; and thereupon if the society fails to communicate any decision to the applicant within sixty days from the date of receipt of such application and the amount by the society, the applicant shall be deemed to have become a member of such society. If any question arises whether a person has become a deemed member or otherwise, the same shall be decided by the Registrar after giving a reasonable opportunity of being heard to all the concerned parties. (2) Any person aggrieved by the decision of a society, refusing him admission to its membership, may appeal to the Registrar. Every such appeal, as far as possible, be disposed of by the Registrar within a period of three months from the date of its receipt: Provided that, where such appeal is not so disposed of within the said period of three months, the Registrar shall record the reasons for the delay. (3) The decision of the Registrar in appeal, shall be final and the Registrar shall communicate his  decision to the parties within fifteen days from the date thereof: (4) Without prejudice to the foregoing provisions of this section, in the case of agro-processing societies or any other society for which a definite zone or an area of operation is allotted by the State Government or the Registrar, it shall be obligatory on the part of such society to admit, on an application made to it, every eligible person from that zone or the area of operation, as the case may be, as a member of such society, unless such person is already registered as a member of any other such society, into the same zone or the area of operation. Restrictions on transfer or charge on share or interest.— (1) Subject to the provisions of the last preceding section as to the maximum holding of shares and to any rules made in this behalf, a transfer of, or charge on, […]

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QUESTION AS TO WHETHER CHILDREN FROM A SECOND MARRIAGE OF A HINDU DIED INTESTED WOULD HAVE A SHARE IN THE ANCESTRAL PROPERTY AN ANALYSIS OF JUDGMENT REFERRED TO LARGER BENCH

August 12, 2021

To understand the question, we must know the law. Preliminary: Point to be considered about Second Marriage is a person is in relation without taking divorce and is not a widower, than what is stated herein is applicable. If Second Marriage is legal than children born out of wedlock have equal rights that of first marriage. Hindu Law: This is pertaining to Hindu succession and testator who died without making a WILL. Such succession is governed by Hindu Succession Act,1956. Who is Hindu? According to Hindu Succession Act it applies to : (a) to any person, who is a Hindu by religion in any of its forms or developments including a Virashaiva, a Lingayat or a follower of the Brahmo, Prarthana or Arya Samaj; (b) to any person who is a Buddhist, Jaina or Sikh by religion; and (c) to any other person who is not a Muslim, Christian, Parsi or Jew by religion unless it is proved that any such person would not have been governed by the Hindu law or by any custom or usage as part of that law in respect of any of the matters dealt with herein if this Act had not been passed. The  Explanation says.—The following persons are Hindus, Buddhists, Jainas or Sikhs by religion, as the case may be:— (a) any child, legitimate or illegitimate, both of whose parents are Hindus, Buddhists, Jainas or Sikhs by religion; (b) any child, legitimate or illegitimate one of whose parents is a Hindu, Buddhist, Jaina or Sikh by religion and who is brought up as a member of the tribe, community, group or family to which such parent belongs or belonged; (c) any person who is a convert or re-convert to the Hindu, Buddhist, Jaina or Sikh religion. It also applies to the members of any Scheduled Tribe within the meaning of clause (25) of Article 366 of the Constitution unless the Central Government, by notification in the Official Gazette, otherwise directs and  included a person who, though not a Hindu by religion, is, nevertheless, a person to whom this Act applies by virtue of the provisions contained in this section. Pondicherry: this Act shall apply to the Renouncants of the Union territory of Pondicherry.” [Regulation 7 of 1963, sec. 3 and First Sch. (w.e.f. 1-10-1963).] (a) “agnate”—one person is said to be an “agnate” of another if the two are related by blood or adoption wholly through males; (c) “cognate” — one person is said to be a cognate of another if the two are related by blood or adoption but not wholly through males; (d) the expression “custom” and “usage” signify any rule which having been continuously and uniformly observed for a long time, has obtained the force of law among Hindus in any local area, tribe, community, group or family: Provided that the rule is certain and not unreasonable or opposed to public policy; and Provided further that in the case of a rule applicable only to a family it has not been discontinued by the family; (e) “full blood”, “half blood” and “uterine blood”— (i) two persons are said to be […]

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CAN THERE BE TWO PROBATES /LETTERS OF ADMINISTRATION IN INDIA?

November 18, 2020

An interesting question came up recently, can there be more than one probate ? One for  Specific property and another for rest or general properties? It was a different question, and I was curious to know can this happen? So, started reading provisions and on research I got the answer. No, you will have to read entire blog. It was not easy for me too. So, let’s go… When there is a Will or application of Letters of Administration its governed by Indian Succession Act,1925. Otherwise property is devolved as per personal succession. Let’s see provisions of The Indian Succession Act,1925 Section 232 in The Indian Succession Act, 1925 232. Grant of administration of universal or residuary legatees.—When— (a) the deceased has made a Will, but has not appointed an executor, or (b) the deceased has appointed an executor who is legally incapable or refuses to act, or who has died before the testator or before he has proved the Will, or (c) the executor dies after having proved the will, but before he has administered all the estate of the deceased, a universal or a residuary legatee may be admitted to prove the Will, and letters of administration with the Will annexed may be granted to him of the whole estate, or of so much thereof as may be unadministered. Section 254 in The Indian Succession Act, 1925 254. Appointment, as administrator, of person other than one who, in ordinary circumstances, would be entitled to administration.— (1) When a person has died intestate, or leaving a Will of which there is no executor willing and competent to act or where the executor is, at the time of the death of such person, resident out of the State, and it appears to the Court to be necessary or convenient to appoint some person to administer the estate or any part thereof, other than the person who, in ordinary circumstances, would be entitled to a grant of administration, the Court may, in its discretion, having regard to consanguinity, amount of interest, the safety of the estate and probability that it will be properly administered, appoint such person as it thinks fit to be an administrator. (2) In every such case letters of administration may be limited or not as the Court thinks fit. Section 255 in The Indian Succession Act, 1925 255. Probate or administration, with Will annexed, subject to exception.—Whenever the nature of the case requires that an exception be made probate of a Will, or letters of administration with the Will annexed, shall be granted subject to such exception. Section 257 in The Indian Succession Act, 1925 257. Probate or administration of rest.—Whenever a grant with exception of probate, or of letters of administration with or without the Will annexed, has been made, the person entitled to probate or administration of the remainder of the deceased’s estate may take a grant of probate or letters of administration as the case may be, of the rest of the deceased’s estate. The answer to the question propounded in the order of reference must be found only in chapters 1 and 2 […]

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CAN HUF CO-PARCENER GIFT HIS UNDIVIDED INTEREST IN THE PROPERTY TO ANOTHER CO-PARCENER?

November 14, 2020

Let us first understand the Hindu Law to discuss and answer this question. 30. Testamentary succession. —[***] Any Hindu may dispose of by will or other testamentary disposition any property, which is capable of being so[disposed of by him or by her], in accordance with the provisions of the Indian Succession Act, 1925 (39 of 1925), or any other law for the time being in force and applicable to Hindus. Explanation.— The interest of a male Hindu in a Mitakshara coparcenary property or the interest of a member of a tarwad, tavazhi, illom, kutumba or kavaru in the property of the tarwad, tavazhi, illom, kutumba or kavaru shall notwithstanding anything contained in this Act or in any other law for the time being in force, be deemed to be property capable of being disposed of by him or by her within the meaning of this[section.] Hindus have two schools of thought Dayabhaga and Mitakshara. Dayabhaga is practiced in West Bengal while Mitakshara is followed in rest of India. Coparcener: The evolution of law: The term coparcener under the Mitakshara system of jurisprudence has a distinct meaning. Its essential characteristic is that the coparcener possesses a right to the family property by birth, the existence of a mere right to partition of family property, cannot be regarded as the touch-stone of coparcenership. Only a male born or adopted into the family can under the ordinary Hindu law, be a coparcener. the right of the widow of a coparcener under the Act is derived under the statute and not by any fiction so as to enable her to take under the general law. So far as alienation of coparcenary property are concerned, it appears that such alienation were permissible in eighteenth century. Indeed, in Suraj Bunsi Koer v. Sheo Proshad Singh and Ors., ILR 6 IA 88 the Privy Council observed as follows:- ” it has been settled law in the presidency of Madras that one coparcener may dispose of ancestral undivided estate, even by contract and conveyance, to the extent of his own share; and a fortiori that such share may be seized and sold in execution for his separate debt.” Thus, the Privy Council also noticed that in Madras alienations by gift were recognized. Such alienations were held by their Lordships to be inconsistent with the strict theory of joint and undivided Hindu family. It is, however, a settled law that a coparcener may alienate his undivided interest in the coparcenary property for a valuable consideration even without the consent of other coparceners. As has been observed by the Privy Council in Suraj Bunsi Koer’s case (supra), such recognition of alienations of coparcenary property for valuable considerations has been one of gradual growth rounded upon the equity which the purchaser for value has to be allowed to stand in his vendor’s shoes and to work out his rights by means of a partition. Although at the time of the judgment of the Privy Council in Suraj Bunsi Koer’s case, the Madras Courts recognised alienations by gift, as time passed the courts of law declared alienations by gift of undivided interest […]

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