Nominee Vs. Successor : Who is Entitled to Ownership of Your Property?

When a member of a co-operative housing society in Maharashtra passes away, the question of ownership of their flat often arises. Many people assume that a nominee automatically becomes the legal owner of the property. However, under the Maharashtra Co-operative Societies Act, 1960 (MCS Act), the reality is different. Let’s explore the concept of nomination in housing societies and clarify whether a nominee holds absolute ownership.

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What is a Nomination in a Housing Society?

A nomination is a process where a member of a co-operative housing society designates a person (or persons) to take care of their share in the society in case of their demise. This is governed by Section 30 of the Maharashtra Co-operative Societies Act, 1960 and the Model Bye-Laws of Co-operative Housing Societies.

As per Bye-Law No. 34, a member can nominate an individual(s) who will be recognized by the society after the member’s death. The nominee can be:

• A family member

• A legal heir

• A third party (not necessarily a family member)

The society is bound to transfer the deceased member’s share to the nominee. However, this does not mean the nominee becomes the legal owner of the property.

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Is the Nominee the Legal Owner of the Flat?

No, the nominee is not the legal owner of the flat. The role of a nominee is that of a trustee or caretaker until the rightful legal heirs claim ownership through succession laws.

This has been reaffirmed in various court rulings, including:

1. Amit Tukaram Pawar vs. Mangal Sain Gopal Das Memorial Charitable Trust (2022) – The Bombay High Court held that a nominee does not become the absolute owner of a property; the rightful heirs as per succession laws hold ownership.

2. Indrani Wahi vs. Registrar of Co-operative Societies (2016) – The Supreme Court ruled that societies must transfer shares to the nominee, but this does not override succession laws.

3. Sarbati Devi vs. Usha Devi (1984) – The Supreme Court clarified that nomination does not confer ownership rights and that legal heirs retain their inheritance rights.

Thus, a nominee merely holds the flat in trust for the legal heirs, who may then transfer ownership as per succession laws such as:

• Hindu Succession Act, 1956 (for Hindus)

• Indian Succession Act, 1925 (for Christians, Parsis)

• Muslim Personal Law (for Muslims)

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Procedure for Nomination in a Housing Society

To ensure a smooth transition, members of a housing society must follow a proper nomination process:

1. Filing Nomination Form (Form No. 14) with the society.

2. Acknowledgment & Recording by Society – The society must enter the nomination in its records within 7 days and issue an acknowledgment.

3. Changing a Nominee – A member can modify or revoke a nomination any number of times by submitting a fresh nomination form.

4. Transfer of Shares – Upon the member’s demise, the society transfers the shares to the nominee after verifying the death certificate.

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What Happens After the Death of a Member?

Upon the demise of a member, the following process takes place:

1. The nominee applies to the society for the transfer of membership.

2. The society transfers the shares in the nominee’s name only if there is a valid will with a probate.

3. Legal heirs can claim ownership through a succession certificate, probate, or a family settlement deed.

4. If no legal heir disputes the nomination, the nominee may become the owner through proper legal transfer (such as a gift deed or sale deed).

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Key Takeaways

1. A nominee is not the legal owner – they are a caretaker until the legal heirs claim ownership.

2. Housing societies must transfer shares to the nominee but cannot decide property ownership.

3. Legal heirs can challenge the nominee’s ownership under applicable succession laws.

4. Court rulings confirm that succession laws override nomination in property matters.

If you are a member of a housing society, ensure that both nomination and a proper will are in place to avoid disputes. A legal consultation is always advisable for clarity on inheritance rights.