RAJESH KHUB CHANDANI vs DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES (HOUSING)

THIS is a complaint filed by one Rajesh Khub Chandani under Section 17 of the Consumer Protection Act, 1986 and it relates to a dispute over the change of ownership of a Co-operative flat. The complainant''s father late Indur I. Kay had a flat in Co-operative Housing Estate as a Member of the Pashupati Co-operative Housing Society Ltd., being flat No. C/4 at 7/18, Rainey Park, Calcutta. He died on 19.3.94 leaving his wife Mohini I. Kay as his nominee. After his death the wife as nominee wrote a letter dated 20.7.94 to the Co-operative Society proposing to make her son Rajesh I. Khub Chandani as an associated Member in respect of the flat alongwith her. THIS proposal was accepted by the Managing Committee of the Society. In the meantime the mother Mohini I. Kay died and the son then wrote a letter to the Society requesting them to transfer the ownership of the flat to him. He also enclosed a declaration affirmed by the only daughter of Mohini I. Kay that she has no objection to the flat being transferred to her brother. The Society accepted this proposal also by passing a resolution to that effect. Thereafter the proposal was sent to the Registrar of Cooperative Societies (Housing) for approval. The Registrar, however, raised certain objection against the proposal. The principal objection was that there could not be a nomination in favour of two persons as the provisions of Section 79 of the West Bengal Co-operative Societies Act, 1983 provided that a nomination in accordance with the rules may be in favour of a person on his death. It has been contended that the word "person" denotes a singular individual and there could not be a nomination of more than one Member. The Registrar, therefore, asked the complainant to produce a succession certificate in accordance with the provisions of the Indian Succession Act, 1925 in support of his claim. Being aggrieved by this direction the complainant has brought this complaint before the Commission. The case is contested by the Deputy Registrar of Co-operative Societies (Housing), Calcutta Metropolitan Area (who is empowered to act as a Registrar) who besides the above contention also raises a point that the complaint is not maintainable under the Consumer Protection Act.

THE point for determination in this case is if the direction of the Registrar of Co-operative Societies for production of a succession certificate is necessary and if the complainant is entitled to have the ownership of the relevant flat on the basis of documents already filed. DECISION There is no dispute that late Indur I. Kay the original owners of the flat died leaving a nomination in favour of his wife. The wife also died soon thereafter. But before her death she expressed her desire to make her son an associated member alongwith her. This proposal was approved by the Managing Committee of the Society. The sole purpose of this proposal was to enable her son to have the ownership of the flat after her death. From the Registrar''s side the proposal was opposed on the ground that there cannot be more than one names under the provisions of Section 79 of the West Bengal Cooperative Societies Act, 1925 (hereinafter referred to as an Act for the sake of brevity). This, however, is a novel contention and it is necessary to examine whether this can be sustained.

The ownership of a flat vests in a member by virtue of the provisions of Section 7 of the Act. A person in whose favour a flat is allotted or who acquires the membership on a transfer from him either by operation of law or by transfer intervivos is entitled to the flat. Section 79 of the Act provides that a member before his death can nominate a person in whose favour Co-operative Society shall dispose of the share or interest of such member on his death. This is a simple measure for transfer of ownership of the shares (and consequently of the property he owns as a member). Can such a nomination be made in favour of more than one person ?

SECTION 80 of the Act provides in some details how the membership of a member of a Society can be transferred by operation of law. Clause (b) of Sub-section 1 of the said section provides that if there is no nominee or if the existence or, residence of the nominee cannot be ascertained by the Board or if for any other cause the transfer cannot be made without unreasonable delay, such transfer may be made to the person who (subject to the production of probate, letters of administration or succession certificate) appears to the Board to be entitled in accordance with the rules to the possession of such share or interest as part of the estate of the deceased member. There may however, be a Will in favour of more than one person and successsion certificates may also be granted to more than one applicant and under Clause (b) as aforesaid such persons shall be entitled to the interest of the deceased member. So it may be held that interest of a person may devolve on more than one person on the death of a member. It follows that there is no fixed rule that the nominee must necessarily be only one person. Even under the Act and the Rules framed there under there are indications that a body of person may be member of a Co-operative Society. Section 69(1) of the Act provides inter alia that subject to the approval of the State Government any Association or body of persons or any financing bank can be a member of the Society. Rule 124 of the West Bangal Co-operative Societies Rules, 1987, also provide that any Association or body of persons may be admitted as member of a Society. Moreover the word "person" as per definition provided in Section 3(42) of the General Clauses Act, 1897 is defined as including any Company or Association or body of individuals whether incorporated or not. Thus the idea that a member cannot nominate more than one person as his successor to the interest he holds in any Co-operative flat is not correct.

AS discussed above, the whole purport of Mrs. Mohini I. Kay''s request for making her son an associated member was to make him a co-owner in the property which actually meant that he was to succeed her as her survivor. The essence of the proposal was understood by the Co-operative Society and they accepted the same also. So for all purposes the mother''s proposal should be accepted as a nomination of her son after her death. The Board having accepted the proposal, there is no difficulty in giving effect to this nomination. On the other hand, if it be held that the act of nomination was inchoate, the shares inherited by the mother devolved on her heirs, namely, her one son and one daughter. The daughter has already disclaimed her right to the shares and has indicated the same by raising no objection to the share of the brother. The Board having been satisfied about the heirs of the deceased has expressed its willingness to accept the brother to be the only heir entitled to her shares. The provision of Section 80 of the Act should be enforced when there is no nomination and any other person puts forth his claim for ownership of the share on the basis of heir ship. In this case there is no doubt in the minds of the Board that the son is the only heir interested in the property. So demanding a succession certificate to prove his claim as an heir would be a meaningless formulary. In fact, a succession certificate can be demanded for a claim in respect of any "debt" or "security" as provided in Section 370 of the Indian Succession Act, 1925. In this case there is no demand from any quarters that the deceased mother left any Will. So if the Board is satisfied about the claim of the son to the ownership of the share and the flat, there is no necessity to demand production of a probate or succession certificate to prove the heirship. In our opinion the demand for a succession certificate from the office of the Registrar of Co-operative Societies is unjust and unnecessary. As regards the objection that the complainant is not a consumer, we hold that the complainant is a beneficiary of the service rendered to the last owner for consideration and although the Board cannot be held liable for deficiency in service in this case, yet the Registrar of Co-operative Societies having refused to consider the petition of the complainant is guilty of deficiency in service. Indeed Section 79 or Section 80 does not require the approval of the Registrar for giving effect to nomination or a claim and we have no doubt that the complainant has been unnecessarily harassed by the refusal of the Registrar of the Co-operative Societies to the change of the ownership of the shares and the flat. Accordingly this petition of complainant is allowed. The Registrar/Deputy Registrar of the Co-operative Societies is directed not to press his objection to the change of ownership of the flat and the shares held by the last member, namely, Mohini I. Kay in favour of the complainant. The Registrar/Deputy Registrar of the Cooperative Societies is also directed to render approval to the proposal of the Pashupati Co-operative Housing Society Ltd. for the transfer of the shares and the flat No. C/4, 7/18, Rainey Park in favour of the complainant within 7 (seven) days from the date of communication of this order.

HAVING regard to the circumstances of the case we direct that the parties do bear their own costs. Complaint allowed.