Procedure on death of a member in housing society
By Adv. Vimal Punmiya, B. Com., LLB, FCA
As per sec 15 (1) On receiving satisfactory proof of the death of a member, the General Body may transfer the shares or the interest of the member to the person or persons nominated or if there is no person so nominated to such person as may appear to the general body to be heir or the legal representative of the member or to pay such a sum representing the value of such nominator’s shares or interest as determined in accordance with the rule 23 of the M.C.S. Rules 1961, after deducting all sums due to the society from the nominator. Provided that the society shall transfer the share or interest to such nominee, heir or legal representative as the case may be being qualified in accordance with the rules and these byelaws for membership of the society or on his application within one month of the nominator’s death or any person specified in the application who is so qualified.
Provided further that were there are more nominees than one and the share or share are held jointly by them, their name shall be entered in the certificate in the order specified in the nomination. If there is no direction given by the nominator about the order in which the names should be entered in the share certificate, the matter shall be decided by the General body and its decision shall be final.
2. The society may pay all other money’s due to the nominator from the society to such nominee, heir or legal representative as the case may be.
3. In case where the nominee, heir or legal representative is a minor on the date of nomination by a member, the member shall have option of appointing a guardian at the same time or at a later date to act on behalf of the minor. The nominator member shall state in the nomination the date of birth of the minor. The member shall also have the option of revoking or varying the appointment of guardianship.
4. Where the share of shares were issued to a member by virtue of his being a tenant or a lessee and on the death of such member, the nominee, heir or legal representative be found to be a minor, the General Body may in its discretion allow enjoyment of the same benefits as the member before his demise, but suspend the transmission of shares or interest until the attainment of maturity by the nominee heir or legal representative, transmission of shares or interest shall be made on the attainment of maturity by any one of such nominees, heirs or legal representatives , subject to Bye-laws 6,7 and 8, and the names of the joint holders be entered in the Share Certificate or other registers on payment of the prescribed fee.
5. All transfers and payment made by the society in accordance with these bye-law shall be valid and effectual against any subsequent demand upon the society by and other person.
6. It is noticed that several co-operative housing societies charge amounts to the Transferors over and above the transfer fee prescribed under the Bye-law No.40 (V) of the bye-laws for co-operative Housing Societies, in one or the other form by passing resolutions at their general body meetings. There is nothing wrong in levying some additional charge on a Transferor at the time of transfer of a flat in as much as a transferor gets premium while transferring his flat and the society is justified in claiming a share of such premium. However, it is seen that majority of the societies claim the share of the premium in the form of donation. It may be mentioned here that the word ‘donation’ connotes the sense of voluntary action and no one can force the other person to pay donation. On this analogy, if any transferor refuses to pay donation, at the time of transfer of his flat, inspite of the resolution of the general body meeting of the society, the society may not have any legal remedy against such transferor, It is, therefore, advisable that the societies should pass resolutions at their general body meetings requiring transferors to contribute to ‘A Common Amenities Fund ‘or ‘A common Good Fund’ of the society. While fixing the rate of contribution, to such fund, regard should be given to the level of appreciation of the value of properties in the locality, the status of the members, the amenities available to the members of the society, the type of construction of the building etc.
7. The society has also to consider the question of excluding from the purview of the resolution regarding levy of extra charge on certain transfers. In a number of cases, the transfers between the numbers of the same family are excluded from the purview of such resolution. In others, transfers between blood relations are excluded. The societies are advised that while drafting the resolutions, specific cases of transfers proposed to be excluded should be clearly brought out in the resolutions. It may be noted that in case of transfers of flats to nominees/heirs, the question of transferors getting premia does not arise and so transfer of flats to nominees/heirs should be specifically excluded from the purview of the resolutions.
VI. NOMINATION OF PERSONS :
RULES 25 OF THE M.C.S. RULES 1961
1 For the purpose of transfer of his share or interest under sub-section (1) of section 30, a member of a society may, by a document signed by him or by making a statement in any book kept for the purpose by the society, nominate any person or persons. Where the nomination is made by a document, such documents shall be deposited with the society during the members life time and where the nomination is made by a statement, such statement shall be signed by the member and attested by one witness.
2 The nomination made under sub rule (1) may be revoked or varied byany other nomination made in accordance with that sub-rule.
3 I) Where a member of a society has not made any nomination, the society shall on the member’s death, by a public notice exhibited at the office of the society, invite claims or objections for the proposed transfer of the share or interest of the deceased member within the time specified in the notice.
ii After taking into consideration the claim or objection received in reply tothe notice or otherwise, and after making such inquiries as the committee considers proper in the circumstances prevailing, the committee shall decide as to the person who in its opinion is the heir or the legal representative of the deceased member and proceed to take action under section 30”.