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High Court Of Delhi
ASHOK CHANDRA AGGARWALA - Appellant
Versus
DELHI ADMINSTRATION - Respondent
Civil 29 of 1976
Decided On : 12/19/1984
CO-OPERATIVE SOCIETY - TRANSFER OF SHARE OR INTEREST OF DECEASED MEMBER - NOMINATION - DISCRETIONARY POWER OF SOCIETY - SECTION 26 OF DELHI CO-OPERATIVE SOCIETIES ACT, 1972.
Fact of the Case:
Petitioner sought a writ of mandamus to the Delhi Administration to substitute his name in place of his late father's name in the sub-lease executed between his father, the President of India, and the Supreme Court Bar Cooperative House Building Society Ltd. The petitioner's father had nominated him as per Rule 35 of the Delhi Co-operative Societies Rules, 1973. The Society passed a resolution substituting the petitioner as a member in place of his father. However, the Delhi Administration refused to substitute the petitioner's name due to objections raised by other legal heirs of the deceased.
Finding of the Court:
The court held that the Delhi Administration was well within its rights to decline the request of the petitioner. The court found that section 26 of the Delhi Co-operative Societies Act, 1972, which deals with the transfer of share or interest of a deceased member, gives discretionary power to the society to transfer the share or interest to the nominee or legal representative of the deceased member. The court also found that the bye-laws of the society only provide for the transfer of the share of the deceased member and not his interest.
Issues: 1. Whether the Delhi Administration is obligated to transfer the interest of a deceased member to a nominee under section 26 of the Delhi Co-operative Societies Act, 1972? 2. Whether a nomination made under section 26 of the Act creates a statutory testament?
Ratio Decidendi: 1. The court held that section 26 of the Delhi Co-operative Societies Act, 1972, does not impose a mandatory obligation on the society to transfer the interest of a deceased member to a nominee. The use of the word "may" in the section suggests that the society has discretionary power in this regard. 2. The court held that a nomination made under section 26 of the Act does not create a statutory testament. The court relied on the principle laid down in Smt. Sarbati Devi and another v. Smt. Usha Devi, AIR 1984 Supreme Court-346 (2), which held that a mere nomination under section 39 of the Insurance Act does not confer any beneficial interest on the nominee.
Final Decision: The court dismissed the writ petition with no order as to costs.
( 1 ) THE petitioner, Shri Ashokchandra Aggarwala, seeks issuance of a writ of mandamus tothe Delhi Administration to substitute his name in place of thename of his late father in the sub-lease executed between hisfather, the President of India and the Supreme Court Bar Cooperative House Building Society Ltd. (hereinafter called thesociety ).
( 2 ) ADMITTED facts are that the petitioner s father Shri C. B. Aggarwala, a Senior Advocate of the Supreme Court, was amember of the Society. The Society is covered by the Delhico-operative Societies Act, 1972, (hereinafter called the Act )and the Delhi Co-operative Societies Rules, 1973 (hereinaftercalled the Rules ) as well as by the bye-laws framed by thesociety. Shri C. B. Aggarwala was allotted plot bearing No. A-25, Niti Bagh, New Delhi, by the Society. For the purpose oftransfer of his share he had nominated the petitioner herein inaccordance with Rule 35 of the Rules. Shri C. B. Aggarwaladied on 13/06/1973.
( 3 ) BY a resolution dated 16/05/1975, the Socie. ty passed a resolution substituting the petitioner as a member of thesociety in place of his late father and resolved "that the nameof Shri Ashok Chandra Aggarwala, nominee of late Shri C. B. Aggarwala be substituted in place of Shri C. B. Aggarwala asa member of the Society and as a sub-lessee of plot No. A-25,ni ti Bagh, New Delhi. A copy of the resolution be sent toshri A. C. Aggarwala, to the lessors and to other heirs whowrote letters to the Society".
( 4 ) IT appears that the petitioner had in tlie meanwhile moved the Delhi Administration, respondent No. 1, the substitution in his name in the said sub-lease. He had also moved theassistant Housing Commissioner, Landb, Delhi Administration,vide his application dated 21/02/1975, for this purpose. However, he was informed by letter dated 5/03/1975, to produce the succession certificate from a Civil Courtadministration and Othersof competent jurisdiction so that further action could be takenin the matter. A copy of the said letter is Annexure e to thewrit petition. His plea before the authorities was that as anominee he was entitled not only to the share which his fatherhad but also to the interest of the deceased. Petitioner s effortsto have the transfer of plot in question made in his name havingfailed, he has moved the present petition.
( 5 ) MR. Harjinder Singh, learned counsel for the petitioner,submits that in accordance with the provisions of section 26of the Act read with Rule 35 of the Rules petitioner s nameis to be mandatorily substituted in place of his father s name. It is useful to quote the provisions of section 26. Section 26reads: "26. (1) On the death of a member a co-operativesociety may transfer the share or interest of thedeceased member to the person nominated in accordance with the rules made in this behalf, or,if there is no person so nominated to such personas may appear to be the heir or legal representative of the deceased member, or pay to such nominee. heir, or legal representative, as the casemay be, a sum representing the value of suchmember s share or interest as ascertained in accordance with the rules or bye-laws;provided that
IN the case of a co-operative society with unlimitedliability, such nominee, heir or legal representative,as the case may be, may require payment by thesociety of the value of the share or interest of thedeceased member ascertained as aforesaid;
IN the case of a co-operative society with limitedliability, the society transfer the share or interestof the deceased member to such nominee, heir orlegal representative as the case may be, being qualified in accordance with the rules and byelaws formembership of the society, or on his applicationwithin one month of the deceased member So anyperson specified in the application who is so qualified;
NO such transfer or payment shall be made exceptwith the consent of the nominee, heir or legal representative, as the case may be.
( 6 ) ANOTHER plea of Mr. Har
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