MUMBAI: A nominee of a property in a housing society does not automatically become the absolute owner of the property after the death of the original owner, the Bombay High Court has ruled in an important order.
Delivering the verdict in a legal battle that has dragged on for over 29 years, Justice A P Deshpande said it would be the personal law of an individual that would determine the successor to the property and not the nomination under the Cooperative Societies Act.
"The Maharashtra Cooperative Societies Act (MCSA) does not provide for a special rule of succession altering the rule of succession laid down under the personal law,'' the judge said, citing two earlier judgments. The court held that a nominee did not become the "absolute owner'' and was empowered only to hold the "property in trust for the real owners, that too for the purpose of dealings with the society''. A nominee has to give way to the legal heirs.
The court's judgment came in a dispute over a 5,610-sq-ft plot at the Nav Rajasthan Co-Operative Housing Society in Pune bought by Shivram Sattur, who had named his wife Tarabai as a nominee.
Tarabai tried to sell the property after his death, but her four children sued her. Two subordinate courts upheld the sale agreement saying Tarabai had become the sole owner of the property as a result of the nomination.
The HC, however, did not agree and said that her children also had a right over the plot as they were the legal heirs.
The Hindu law says that on the death of a man, in case there is no will, the property is equally shared between the wife and the children. Muslims are governed by their personal laws.
Under the MCSA, on the death of a member, the society can transfer the interest to a nominee or an heir or a legal representative. Such a nominee does not become the only owner, the HC said. The nominee represents the legal heirs of the deceased member while dealing with the cooperative society and is only empowered to act on behalf of the real owners. This is a temporary arrangement between the death of the member and till the court decides the legal heir who is entitled to the property or estate.
The HC judgment has been stayed for eight weeks on a request from the developer who bought the property.
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Supreme Court - on the effect of the 2005 amendment to The Hindu Succession Act
Indian Parliament enacted the Hindu Succession (Amendment) Act, 2005 ("the Amendment Act" or "the 2005 Amendment") so as to confer equal right to a daughter to a share in Hindu joint family property by deeming a daughter to be a coparcener. However, the question as to whether this amendment was retrospective in nature or prospective in nature, whether it applied to cases where the succession had already opened before the 2005 Amendment, what would be the effect of the daughter being declared to be a coparcener by birth, would her right to a share date back to the date of her birth, or would it apply to only a female born after 2005, were all questions which have vexed the Courts for the last 10 years. Different views were taken by different High Courts.
It is correct that the general rule under Muslim personal laws in India (Shariat) is that a Muslim may, by his will, dispose only up to one-third of his property which is left after payment of funeral expenses and debts without the consent of his heirs. The remaining two-thirds of the testator’s property must go to those who are his heirs at the time of his death. With respect to Shia Muslims, the bequest of the permissible one-third may be made either to an heir or to a non-heir. However, with respect to a Sunni Muslim, the one-third bequest may be made only in favour of a non-heir without the consent of his heirs. If it is made to an heir, it is invalid unless consent of heirs is obtained after death of testator, in which case it is valid.
However, the above restriction on disposition of property by will does not apply to a Muslim whose marriage is solemnized under the provisions of the Special Marriage Act, 1954 (instead of Muslim personal laws). This is because upon solemnization of marriage under this Act, the rules of Muslim personal law cease to apply to him with respect to matters of succession of his property. Accordingly, such a Muslim may, by his will, dispose his entire property without the requirement of his heirs’ consent.
It would also be open to a Muslim to transfer his entire property during his lifetime by way of a gift to any person, unless the gift is a marz ul maut (death bed) gift. Marz ul maut is regarded under Muslim laws to be a malady which induces an apprehension of death in the person suffering from it and which eventually results in his death. A gift made by a person suffering from marz ul maut cannot take effect beyond one-third of the estate of such donor after payment of funeral expenses and debt, unless the heirs of the donor give their consent after the death of the donor to the excess taking effect.