Court’s decision
The Bombay High Court held that the Respondent authorities acted contrary to law by failing to decide the Petitioner society’s application under Section 154B-13 of the Maharashtra Co-operative Societies Act concerning transfer of Unit B-1 after the death of a member. The Court found that the authorities refused to act on the Petitioner society’s request merely because a nominee existed, even though the statute plainly states that a nominee is only a trustee and not an exclusive beneficiary of the deceased member’s property.
The Court declared that the Respondent officials were duty-bound to determine rival claims between the nominee and the legal heir and could not abdicate jurisdiction. It held that “the authority cannot ignore the statutory mandate of Section 154B-13,” especially when disputes arise regarding succession. The impugned refusal to pass appropriate orders was quashed, and the matter was remanded to the competent authority with a direction to decide the claim afresh within a time-bound frame. The Court also directed both sides to file all relevant documents to facilitate a proper adjudication under the statutory scheme.
Facts
The deceased member of the co-operative housing society occupied Unit B-1, a basement unit allotted under the society’s internal allotment rules. After the member’s death, the nominee asserted exclusive rights over the unit. However, the legal heir submitted that the nominee could not claim ownership and that succession must be determined as per personal law. The Petitioner society, confronted with disputed claims, sought guidance from the statutory authority under Section 154B-13, asking for a formal determination so that the share certificate and occupancy rights could be properly transferred.
The Respondent authorities repeatedly declined to exercise jurisdiction and stated that the presence of a nominee barred them from deciding the dispute. Aggrieved by the refusal to adjudicate, the Petitioner society invoked the High Court’s supervisory jurisdiction, seeking directions to compel the statutory authority to decide the matter under the Act. All facts concerning the member’s death, the competing claims, and the internal records of the society were placed before the Court.
Issues
- Whether a nominee under co-operative society law acquires exclusive ownership rights over the deceased member’s unit.
- Whether the authorities can refuse to adjudicate a dispute between a nominee and a legal heir merely because nomination exists.
- Whether Section 154B-13 mandates statutory authorities to decide succession disputes that arise in housing societies.
- Whether the refusal to exercise jurisdiction constitutes an error apparent and warrants intervention under the Court’s supervisory power.
Petitioner’s arguments
The Petitioner society argued that it faced a statutory duty to transfer membership only after determining the rightful successor, but such determination cannot be made by the society itself when rival claims exist. The Petitioner submitted that Section 154B-13 empowers the competent authority to resolve such disputes, and the refusal to invoke this power left the society without any legal pathway to transfer the unit. The Petitioner emphasised that a nominee is merely a trustee and does not acquire exclusive ownership rights by virtue of nomination.
The Petitioner further argued that unless the authority adjudicates the matter, the society cannot finalise records, issue a share certificate, or complete transfer procedures. Because the unit involved internal allotment and infrastructure-related obligations, any uncertainty in membership would harm functioning of the society. The Petitioner therefore sought a direction compelling the Respondent authorities to consider documents submitted by both the nominee and the heir and to determine succession in accordance with the Act.
Respondent’s arguments
The Respondent authorities contended that since the deceased member had filed a nomination, the nominee must be treated as the person entitled to transfer. They argued that Section 154B-13 was not meant to override nomination and that disputes relating to heirship must be resolved through civil proceedings. They submitted that their refusal to adjudicate was justified because nomination simplifies transfer and avoids litigation within the co-operative framework.
The Respondent authorities maintained that exercising jurisdiction in such disputes would burden the department and encourage challenges to nominations. They argued that the statutory scheme favours administrative convenience and that the nominee should be recognised without deeper inquiry into succession. On this basis, the authorities justified declining to pass orders on the Petitioner society’s application.
Analysis of the law
The Court held that the Respondent authorities had fundamentally misunderstood the nature of nomination under the Co-operative Societies Act. Nomination does not create ownership; it merely authorises the society to transfer the unit on a temporary basis until legal succession is established. Section 154B-13 was enacted precisely to address disputes that arise when nomination and heirship conflict. The Court emphasised that refusing to exercise jurisdiction undermines the statutory objective of preventing prolonged uncertainty within societies.
The Court noted that the co-operative framework requires prompt resolution of membership issues so that societies can function without administrative paralysis. Because nominations do not eliminate legal succession rights, the authority must examine claims, evaluate documents, and issue findings. The Court therefore held that the refusal to adjudicate was contrary to the statutory mandate and frustrates the co-operative structure intended by the legislature.
Precedent analysis
The Court referred to settled jurisprudence holding that a nominee in a housing society is not the owner of the property but merely a trustee who facilitates transfer until the lawful heir is identified. The Court relied on Supreme Court authority stating that nomination does not displace succession law and cannot deprive heirs of their legitimate rights.
The Court also invoked earlier High Court rulings affirming that where rival claims arise, the competent authority must adjudicate under the Act and cannot decline jurisdiction. These precedents collectively emphasise that the administrative machinery under co-operative law exists to prevent societies from becoming embroiled in prolonged succession disputes. By ignoring these principles, the Respondent authorities committed a jurisdictional error.
Court’s reasoning
The Court held that the refusal to decide the Petitioner society’s application was unjustified because the statutory framework specifically envisages adjudication of such disputes. The Court reiterated that nomination does not confer ownership and therefore cannot be the basis for ignoring the heir’s claim. Because the conflict related entirely to succession, the competent authority was required to apply Section 154B-13, call for documents from all parties, and determine entitlement.
The Court reasoned that succession disputes must be resolved within the co-operative mechanism to maintain stability and certainty in membership records. By insisting that civil court proceedings were the only remedy, the authorities negated the statutory purpose. The Court therefore quashed the refusal order and directed the authorities to conduct a full inquiry, provide an opportunity to both sides, and issue a reasoned order within a specified timeframe.
Conclusion
The Court concluded that the Respondent authorities had wrongly abdicated jurisdiction under Section 154B-13 by relying solely on the existence of nomination. The statutory provision was enacted to ensure that disputes between nominees and heirs are resolved efficiently, and the authorities’ refusal to adjudicate violated the legislative intent. Accordingly, the Court set aside the impugned decision and remanded the dispute for adjudication on merits. It further directed parties to submit all relevant succession documents to facilitate a proper inquiry under the Act. The judgment clarifies the limited role of nomination and reinforces the statutory obligation to determine rightful successors.
Implications
This decision has important consequences for co-operative housing societies and members across Maharashtra. It confirms that nominees do not acquire ownership rights and that legal heirs can assert succession claims even when nominations exist. The ruling also ensures that statutory authorities cannot refuse to adjudicate disputes under Section 154B-13, strengthening administrative accountability. For society committees, the judgment highlights the importance of referring contested transfers to the competent authority rather than taking unilateral decisions. The ruling will provide clarity in numerous cases where succession disputes arise in relation to internally allotted units like Unit B-1.