1. One Smt. Tarabai is the original defendant No. 1. Her husband by name Shivram had purchased a plot of land in his own name bearing Plot No. 7 admeasuring 5610 square feet from Nav Rajasthan Co-operative Housing Society Ltd. (original defendant No. 2). During his life time, Shivram nominated Tarabai as his nominee and the said nomination was pursuant to section 30 of the Maharashtra Co-operative Societies Act read with Rule 25 of the Rules framed thereunder. Shivram and Tarabai had four children viz. the present appellant by name Ramdas, Krishnadas, Vitthaldas and Sau. Sangita. Ramdas was original defendant No. 3 whereas Krishnadas, Vitthaldas and Sau. Sangita were the defendant Nos. 4, 5 and 6. After the death of Shivram, Tarabai entered into an agreement of sale with the original plaintiff by name Rameshchandra @ Ramchandra Popatlal Shah. The agreement is purported to have been executed on 11-8-1980. Under the agreement of sale, the suit property viz. the plot of land was agreed to be sold for total consideration of Rs. 50,000/-. Out of the said Rs. 50,000/-, Rs. 500/-have been paid by way of earnest money. The respondents Nos. 1 and 2 herein (original plaintiffs) instituted a suit against Tarabai, so also against her children for specific performance of contract and for declaration that the sons and daughter of Tarabai have no right, title and interest in the suit property. The Society was also impleaded as party defendant No. 2. The suit came to be decreed.
2. One event needs to be mentioned for proper understanding of the controversy and the same is that the present appellant Ramdas instituted a Civil Suit No. 206/1980 and the said suit was filed against Tarabai and the Society. A compromise decree came to be passed in the said suit and it came to be declared under the compromise decree that in pursuance to the partition effected in 1976 amongst the family members, the plot has fallen to the share of the present appellant Ramdas and thus, he is the exclusive owner thereof. As Ramdas obtained a decree that he is the owner, the plaintiff herein also claimed a declaration that the compromise decree passed in Civil Suit No. 206/1980 is not binding on the plaintiff. As stated hereinabove, the trial Court decreed the suit filed by the plaintiff and recorded the following findings:—
(1) That the decree obtained by the present appellant Ramdas in Civil Suit No. 206/1980 is collusive decree obtained fraudulently and thus, not binding on the plaintiff.
(2) That the suit property was not partitioned and under the alleged partition, Ramdas did not get title to the suit property.
(3) That Tarabai became absolute owner of the suit property on account of her nomination by her deceased husband Shivram in his place under section 30 of the Maharashtra Co-operative Societies Act read with Rule 25 of the Rules framed thereunder.
(4) That in view of Tarabai's nomination as she became exclusive owner of the suit property, her sons and daughter have no right, title and interest therein.
3. Aggrieved by the above findings which resulted in passing of the decree for specific performance of contract in favour of the plaintiff, the present appellant, Tarabai and the Co-operative Society preferred first appeal before the District Judge, Pune. The First Appellate Court rejected the contention of the appellants that the nominee does not acquire right, title and interest in the property in regard to which he is nominated under section 30 of the Maharashtra Co-operative Societies Act and held that a valid nomination empowers the nominee to claim the property.
4. The First Appellate Court has held against the present appellant on the other points as well. It concluded that (a) there was no partition effected amongst the members of the family left behind by Shivram; (b) that the appellant Ramdas did not get the suit plot in the partition as his share and (c) that the compromise decree obtained in a suit filed by Ramdas was fraudulent and collusive and does not bind the plaintiff. I have perused the judgment, these findings do not call for any interference whatsoever as these findings are based on the evidence on record. The said findings also do not give rise to any substantial question of law requiring any consideration in the Second Appeal.
5. The only question that needs to be addressed is, what is the status of a nominee who has been validly nominated as a member of the Co-operative Society under section 30 of the Maharashtra Co-operative Societies Act? Does he become the owner of the property or does he represent the legal heirs of deceased member while dealing with the Co-operative Society and is only empowered to act for and on behalf of the true owners?
6. In view of the controversy the following substantial questions of law emerges for consideration:—
(1) Whether, both the Courts below are justified in holding that on account of valid nomination of the defendant No. 1 Tarabai, she succeeds to the title of the property of the deceased to the exclusion of the present appellant and other legal heirs of deceased Shivram?
(2) Whether, section 30 of the Maharashtra Co-operative Societies Act provides for a special rule of succession altering the rule of succession laid down by the personal law applicable to the person concerned?
7. For proper appreciation of the submissions made by the learned counsel for the rival parties, it would be appropriate to reproduce section 30 of the Maharashtra Co-operative Societies Act, 1960 and 25 of the Maharashtra Co operative Societies Rules, 1961:”
Section 30.Transfer of interest on death of 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 the deceased member:
Provided that, such nominee, heir or legal representative, as the case may be, is duly admitted as a member of the society;
Provided further that, nothing in this sub-section or in section 22, shall prevent a minor or person of unsound mind from acquiring by inheritance or, otherwise, any share or interest of a deceased member in a society,
(2) Notwithstanding anything contained in sub-section (1), any such nominee, heir or legal representative, as the case may be, may require the society to pay to him the value of the share or interest of the deceased member, ascertained in accordance with the rules.
(3) A society may pay all other moneys due to the deceased member from the society to such nominee, heir or legal representative, as the case may be.
(4) All transfers and payments duly made by a society in accordance with the provisions of this section, shall be valid and effectual against any demand made upon the society by any other person”.
Rule 25 of the Rules of 1961 reads thus:
“Rule 25.Nomination of persons.— (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 document shall be deposited with the society during the member's 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 by any 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 within the time specified in the notice.
(ii) After taking into consideration the claim or objections received in reply to the 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”.
8. The learned counsel for the appellant has relied upon few judgments of the Bombay High Court. First one being in case of Gopal Vishnu Ghatnekar… v. Madhukar Vishnu Ghatnekar…., 1982 Mh.L.J 65 : AIR 1982 Bombay 482. The question that came up for consideration of the learned Single Judge in the case of Gopal Ghatnekar (supra) was squarely touching interpretation of section 30 of the Maharashtra Co-operative Societies Act and Rule 16 of the Rules framed thereunder. Dealing with the section 30, the learned Single Judge in paragraph No. 6 of the judgment observed:
“It is very clear on the plain reading of the section that the intention of the section is to provide for who has to deal with the society on the death of a member and not to create a new rule of succession. The purpose of the nomination is to make certain the person with whom the society has to deal, and not to create interest in the nominee to the exclusion of those who in law will be entitled to the estate. The purpose is to avoid confusion in case there are disputes between the heirs and legal representatives and to obviate the necessity of obtaining legal representation and to avoid uncertainties as to with whom the society should deal to get proper discharge. Though, in law, the society has no power to determine as to who are the heirs or legal representatives, with a view to obviate similar difficulty and confusion, the section confers on the society to determine who is the heir or legal representative of a deceased member and provides for transfer of the shares and interest of the deceased members' property to such heir or legal representative. Nevertheless, the persons entitled to the estate of the deceased do not lose their right to the same. Mr. Naik contends that once a person is nominated and the society transfers the share or interest of the deceased to him, he becomes the owner. If that is to be accepted it will follow that if a society accepts a person as the heir or legal representative and transfers the share or interest to him, that person will become the owner. That, obviously, cannot be the intention of the legislature. Society has no power, except provisionally and for a limited purpose to determine the disputes about who is the heir or legal representative. It, therefore, follows that the provision for transferring a share and interest to a nominee or to the heir or legal representative as will be decided by the society is only meant to provide for interregnum between the death and the full administration of the estate and not for the purpose of conferring any permanent right on such a person to a property forming part of the estate of the deceased. The idea of having this section is to provide for a proper discharge to the society without involving the society into unnecessary litigation which may take place as a result of dispute between the heirs or representatives. This being the position, the contention of Mr. Naik cannot be accepted. Even when a person is nominated or even when a person is recognised as an heir or a legal representative of the deceased member, the rights of the persons who are entitled to the estate of the interest of the deceased member by virtue of law governing succession are not lost and the nominee or the heir or the legal representative recognised by the society, as the case may be holds the share and interest of the deceased for disposal of the same in accordance with law. It is only as between the society and the nominee or heir or legal representative that the relationship of the society and its member is created and this relationship continues and subsists only till the estate is administered either by the person entitled to administer the same or by the Court or the rights of the heirs or persons entitled to the estate are decided in a Court of law. Thereafter the society will be bound to follow such decision. The plaintiff, therefore, cannot be said to have become the owner of the property qua the other heirs merely by virtue of the nomination”.
9. The matter did not rest there and was carried to the Division Bench by L.P.A bearing No. 100/1984. However, during the pendency of L.P.A, an identical question was raised before the another Division Bench in First Appeal No. 116/1989. Attention of the Division Bench was invited to the judgment in case of Gopal Ghatnekar (supra). The Division Bench approving the view taken by the learned Single Judge in the said judgment observed thus:
“In our view, Mody, J. has correctly held that section 30 does not lay down any special rule of succession of properties of a deceased member overriding the general rules of inheritance prescribed by the personal law of the member of a co-operative society”. The Division Bench went on to observe, “In other words, section 30 of the said Act does not at all deal with devolution of immovable properties of deceased members. The learned Single Judge in case of Gopal Vishnu Ghatnekar… v. Madhukar Vishnu Ghatnekar…. reported in 1982 Mh.L.J 65 : AIR 1982 Bombay 482 (supra) has correctly pointed out that upon the plain reading of the section, it is clear that the intention is to provide for who has to deal with the society on the death of a member and not to create a new rule of succession. The learned Single Judge proceeded to observe that the purpose of nomination is to make certain the person with whom the society has to deal and not to create interest in the nominee to the exclusion of those who in law are entitled to the estate of a deceased member. Equally pertinent is the observation made in judgment Mody, J. that the society has no power except provisionally and for a limited purpose to determine the dispute about who is the heir or legal representative of a deceased member. The section 30 only provides for a proper discharge of the society without involving the society in a litigation which may take place as a result of disputes between the heirs”. The Division Bench has placed reliance on the judgment of the Supreme Court in case of Sarbati Devi v. Usha Devi, (1984) 1 SCC 424 : AIR 1984 SC 346 dealing with the scope of sections 39 and 44 of the Insurance Act, 1938 holding that “A mere nomination made under section 39 does not have the effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the assured. The nomination only indicates the hand which is authorised to receive the amount, on the payment of which the insurer gets a valid discharge of its liability under the policy. The amount, however, can be claimed by the heirs of the assured in accordance with the law of succession governing them”.
10. It is, thus, clear that the view taken by the learned Single Judge in case of Gopal Vishnu Ghatnekar (supra) laying down the correct position of law has been approved by the Division Bench of this Court while delivering the judgment in First Appeal No. 116/1989. After the judgment delivered by the Division Bench in the said first appeal, L.P.A filed by the aggrieved party came up for hearing before yet another Division Bench and while dismissing the L.P.A, the Division Bench confirmed the view taken by the learned Single Judge in case of Gopal Vishnu Ghatnekar (supra). Independently appreciating the question, the Division Bench has confirmed the view after recording its approval by laying down that in the nomination there is no disposition of the property held by a person making it. Thus, two Division Bench judgments referred hereinabove approve the view taken by the learned Single Judge, extensively referred to hereinabove and thus, the position stands concluded in favour of the present appellant that by virtue of nomination of Tarabai by her deceased husband under section 30 of the Maharashtra Co-operative Societies Act, 1960, she does not become absolute owner of the property, however, was only empowered to hold the property in trust for the real owners that too for the purpose of dealings with the society. Tarabai, as such, had no power, authority and title to alienate the property to the exclusion of the other legal heirs of Shivram. Tarabai, as such, was not competent to enter into an agreement for sale of the suit plot as Tarabai along with her four children were Class-I heirs of Shivram.
11. Per contra, the learned counsel for the respondents has placed reliance on the judgment of the Division Bench (Hajarnavis and Shah, JJ) in case of Poona Hindu Middle Class Co-operative Society Ltd. v. Jayawant Vishnu Sapre in Appeal No. 694/1968 decided on 15-6-1976 by contending that the said judgment takes contrary view. The learned Single Judge while delivering the judgment in Gopal Vishnu Ghatnekar's case (supra) has categorically held that the said Division Bench judgment has absolutely no application in deciding the legal implication of nomination made by a member in terms of section 30 of the Maharashtra Co-operative Societies Act, 1960. The Division Bench in case of Manohar Jagannath Abhyankar v. Lilawati Achyut Ogale in First Appeal No. 116/1989 has also held that the judgment relied upon by the learned counsel for the respondents has no application to the issue involved in the present appeal. Thus, the distinction made by the learned Single Judge has been endorsed to be right by the Division Bench.
12. It is next contended by the learned counsel for the respondents that the questions of law framed by me hereinabove cannot be termed as substantial questions of law as envisaged by section 100 of the Civil Procedure Code. The objection is only recorded for being rejected.
13. In the result, answer the substantial questions of law hereinbelow:
(a) Both the Courts below have committed an error of law in holding that the Defendant No. 1 Tarabai became absolute owner of the suit plot by virtue of her valid nomination made by her husband Shivram under section 30 of the Maharashtra Co-operative Societies Act, 1960 read with Rule 25 of the Rules, to the exclusion of other heirs of the deceased; and
(b) section 30 of the Maharashtra Co-operative Societies Act, 1960 does not provide for a special rule of succession altering the rule of succession laid down under the personal law.
14. In the result, the Second Appeal is allowed. The judgment and decree passed by the Trial Court in Special Civil Suit No. 42/1981’ dated 11-8-1980 confirmed by the District Judge in Regular Civil Appeal No. 772/1984 vide judgment dated 12-3-1986 stands set aside. The plaintiff's suit is dismissed, however, no orders as to costs.
At this stage, the learned counsel for the respondents seeks status quo in regard to the suit property for a period of eight weeks.
The prayer made is just and reasonable and the same is granted.
Appeal allowed.