INDRANI WAHIversusREGISTRAR OF COOP. SOCIETIES & ORS.

                         [2016) 4 S.C.R. 307



                          INDRANI WAHi                                     A
                                  v.
           REGISTRAR OF COOP. SOCIETIES & ORS.
                   (Civil Appeal No. 4646 of2006)
                          MARCH 10, 2016
                                                                           B
   [JAGDISH SINGH KHEHAR AND C. NAGAPPAN, JJ.]
          West Bengal Co-operative Societies Act, 19R3 - ss. 79 and 80
r/w rr. 12 7 and 128 of the West Bengal Co-operative Societies Rules,
1987 - Nomination uls 79 - By a member of a co-operative soci..:ty
...: In favour of his married daughter - After the death of the original
member, the membership transferred in the name of the daughter -
                                                                           c   ,•


 Objection to the transfer by the son and wife of the original member
- Deputy Registrar of Co-operative Societies declined to transfer
the J11embership in favour of the daughter (nominee) on the ground
 that she being married did not fall within definition of the term
  'family' as contemplated uls 79 rlw r. 12 7 - Writ petition by the       D
nominee - Allowed by the Single Judge of High Court - Division
 Bench of the High Court held that the son and wife of the original
 member, being the inheritors, their interest in the property should
 be protected - On appeal, held: Jn case of a valid nomination u/
 s. 79, the Co-operative Society is liable to tramfer the share or
                                                                           E
 interest of a member in the name of the nominee - That would have
 no relevance to the issue of title between the inheritors or successors
 to the property of the deceased member - The Co-operative Society
 is directed to transfer the imerest of the deceased member, in favour
 of the nominee - However, it will be open to the inheritors to pursue
 their case of succession /inheritance.                                    F
    Allowing Civil Appeal No. 4646/2006 and disposing of Civil
Appeal No. 4930/2006, the Court
      HELD: 1. As per s. 79 of West Bengal Co-operative Societies
Act, 1983, where a member of a co-operative society nominates
a person in consonance with the provisions of the West Bengal              G
Co-operative Societies Rules, on the death of such member, the
co-operative society is mandated to transfer all the share or
interest of such member in the name of the nominee. The above
interpretation of Section 79 also emerges from Section 80(1)(a)
which postulates, that the share or interest of a member of the            H
                               307
308            SUPREME COURT REPORTS                      [2016] 4 S.C.R.


A     society, "on his death" shall be transferred to a person
      "nominated under Section 79". The rights of others on account
      of an inheritance or succession is a subservient right. Only if a
      member had not exercised the right of nomination under Section
      79, then and then alone, the existing share or interest of the
      member would devolve by way of succession or inheritance. The
B
      heading of Section 80 - "Disposal of deceased member's share of
      interest" lends further credence to the above interpretation. Rule
      127 of the 1987 Rules also provides, that if a nomination has
      been made by a member under Section 79, the share or interest
      or the value of such share or interest standing in the name of the
c     deceased member, would be transferred to the nominee. Rule
      128 of the 1987 Rules further leads to the same inference.
      Inasmuch as Rule 128 provides, that only in the absence of a
      nominee, the transfer of the share or interest of the erstwhile
      member, would be made on the basis of a claim supported by an
      order of probate, a letter of administration or a succession
D
      certificate (issued by a Court of competent jurisdiction). Thus, in
      case of a valid nomination under Section 79 of the 1983 Act, 'the
      Co-operative Society' is liable to transfer the share or interest of
      a member in the name of the nominee. [Paras 15, 17-19] [322-D-
      F; 324-C, F, G]
E           2. Transfer of share or interest, based on a nomination under
      Section 79 in favour of the nominee, is with reference to the
      concerned Co-operative Society, and is binding on the said society.
      The. Co-operative Society has no option whatsoever, except to
      transfer the membership in the name of the nominee, in
      consonance with Sections 79 and 80 of the 1983 Act (read with
F
      Rules 127 and 128 of the 1987 Rules). That, ·would have no
      relevance to the issue of title between the inheritors or
      successors to the property of the deceased. The Co-operative
      Society' is directed to transfer the share or interest of the society
      in favour of the appellant. It shall however, be open to the other
G     members of the family to pursue case of succession or
      inheritance, if so advised, in consonance with law. [Para 20] (324-
      H; 325-A-C]
            Usha Ranjan Bhaltacharjee v. Abinash Chandra
            Chakraborty, (1997) 10 SCC 344, Smt. Sarbati Devi v.
            Smt. Usha Devi 1984 (1) SCR 992 : (1984) 1 SCC 424
H
INDRANI WAHI v. REGISTRAR OF COOP. SOCIETIES & ORS.                        309



      and Gayatri De v. Mousumi Cooperative Housing Society                A
      Limited 2004 (1) Suppl. SCR 56 : (2004) 5 sec 90 -
      distinguished.
                       Case Law Reference
      (1997) 10 sec 344               distinguished       Para 11
                                                                            B
      1984 (1) SCR 992                distinguished       Para 11
      2004 (1) Suppl. SCR 56          distinguished       Para 11
      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4646
of2006.
      From the Judgment and Order dated 07. I 0.2004 of the High Court
of Judicature at Calcutta in F.M.A. No. 356 of2004
                                                                            c
                                WITH
      C. A. No. 4930 of2006.
      R. P. Gupta, Mehul M. Gupta, Ranjan Mukhe1jee, Dr. Kailash
Chand, Gaurav Agarwal, Abhinav D. Rao, Soumitra G. Chaudhuri, Parijat
                                                                            D
Sinha, Anip Sachthey Advs. for the appearing parties.
      The Judgment of the Court was delivered by
      JAGDISH SINGH KHEHAR, J.
      Civil Appeal No. 4646 of 2006
                                                                            E
       1. Biswa Ranjan Sengupta (hereinafter referred to as 'the
appellant's father'), was admitted as a member of the Sarbar View
Cooperative Housing Society Limited (hereinafter referred to as 'the
Cooperative Society'), against Flat No.4-RB 2/3, Purbachal Housing.
Estate, Phase-II, Sector-III, Salt Lake City, Kolkatta. He (Biswa Ranjan
Sengupta) had married Parul Sengupta. Out of the above wedlock,             F
there were two children - a daughter (Indrani Wahi) and a son (Dhruba
Jyoti Sengupta). It is not a matter of dispute, that his (Biswa Ranjan
Sengupta's) membership of 'the Cooperative Society' had resulted. in
the allotment of the flat referred to hereinabove. Biswa Ranjan Sengupta
recorded the name of the appellant - lndrani Wahi, in terms of the
                                                                            G
mandate contained in Section 79 of the West Bengal Cooperative
Societies Act, 1983 (hereinafter referred to as 'the 1983 Act'). Under
Section 79, a member of'the Cooperative Society' is required to nominate
a person in whose favour 'the Cooperative Society' would dispose of
the share or interest of the member ''on his death''.
                                                                            H
310             SUPREME COURT REPORTS                           [2016] 4 S.C.R.



A            2. It is the case of the appellant before this Court, that her father
      - Biswa Ranjan Sengupta, lived under her exclusive care eversince March
      2002, whereafter he died on 22.07.2003. It is also the case of the
      appellant, that neither the appellant's mother nor her brother participated
      in the last rites of her father - Biswa Ranjan Sengupta. In our considered
      view, these facts are irrelevant for the adjudication of the present
B
      controversy. They are, however, being recorded herein, on account of
      the significance assigned to them, in the pleadings, and also during the
      course of hearing.
             3. After the death of her father- Biswa Ranjan Sengupta, Indrani
      Wahi addressed a communication dated 05.08.2003 to the Secretary of
c     'the Cooperative Society', for entering her name in place of the name of
      her father, with reference to Flat No.4-RB 2/3, Purbachal Housing Estate,
      Phase-II, Sector-Ill, Salt Lake City, Kolkatta. The Managing Committee
      of the Housing Society passed a unanimous resolution on 15.08.2003,
      for transferring the membership of Biswa Ranjan Sengupta in 'the
D     Cooperative Society' to the name of the appellant- Indrani Wahi.
             4. It is the case of the appellant, that consequent upon the passing
      of the above resolution, she (lndrani Wahi) has been paying maintenance
      and other charges to the Society. It is also pointed out, that the Secretary
      of'the Cooperative Society', through a covering letter dated 16.08.2003,
 E    sent all papers with reference to the transfer of the membership of'the
      Cooperative Society' from the name of 8 iswa Ranjan Sengupta, to the
      name of Indrani Wahi, to the Deputy Registrar, Cooperative Societies.
      The papers dispatched, included the resolution of 'the Cooperative
      Society' referred to above.

 F           5. On 01.09.2003, having got wind of the transfer of the
      membership, of 'thi:; Cooperative Society' from the name of his father -
      Biswa·Ranjan Sengupta, to the name of his sister- Indrani Wahi, Dhruba
      Jyoti Sengupta addressed the letter to the Deputy Registrar, Cooperative
      Societies on behalf of his mother- Parul Sengupta. In the above letter,
      he (Dhruba Jyoti Sengupta) asserted, that the membership to the flat
G     should be transferred to the name of his mother - Parul Sengupta. In
      response to the letter dated 01.09 .2003, the Deputy Registrar, Cooperative
      Societies, by an order dated 19.09.2003, required the parties to submit
      documents to demonstrate, that the deceased had a family. The Secretary
      of 'the Cooperative Society' informed Parul Sengupta, that the name of
H     Indrani Wahi had been recorded as a nominee ofBiswa Ranjan Sengupta,
IND RANI WAHi v. REGISTRAR OF COOP. SOCIETIES & ORS.                           311
             [JAGDISH SINGH KHEHAR, J.]

in the records of'the Cooperative Society', and if Parul Sengupta desired       A
to verify the same, it was open to her to inspect the records.
      6. In response to the letter dated 19.09.2003, the Secretary of
'the Cooperative Society' submitted the following information to the
Deputy Registrar, Cooperative Societies through a communication dated
26.09.2003:                                                                     B
      "(I) Late B.R. Sengupta had a family consisting of wife, son and
      daughter-in-law. They all dairded (sic derided) him and he was
      living with his daughter Mrs. lndrani Wahi, where he eventually
      died. A copy of his 'Will' is enclosed 'which will speak its~lf'.
      We reiterate our views that his daughter in the "legal nominee".          c
      (2) Salary Certificate dated 22.9.03 of Mrs. Indrani Wahi is
      attached.
      (3) In the State ofU.P., there is no law regardi11g profession tax
      which has been certified in the Salary Certificate itself.
      (4) The provision of Registration Act, 1908 will not apply in this        D
      case, since the.-property was already registered under the Act in
      the name of Late Sengupta, copies of which are enclosed for
      your perusal.
      Kindly arrange for necessary approval."
                                                       (Emphasis is ours)       E
       7. Yet again, Dhruba Jyoti Sengupta sent a letter on behalf of his
mother, to the Secretary of the Society dated 29.09.2003 again with
reference to the flat in question. He reiterated his previous assertion,
that the flat be transferred to the name of Parul Sengupta. In response
to the above communication, the Secretary of 'the Cooperative Society'
                                                                                F
again informed Parul Sengupta, through a letter dated 16. I 0.2003, that
the name oflndrani Wahi was recorded by Biswa Ranjan Sengupta as
his nominee, with reference to the flat in question.
      8. A further twist was added to the sequence of events, when
Dhruba Jyoti Sengupta addressed another Jetter dated 20. I 0.2003 to the
                                                                                G
Deputy Registrar, Cooperative Societies, informing him, that Biswa
Ranjan Sengupta had not nominated Indrani Wahi, but had actually
nominated Parul Sengupta (in terms of the nomination stipulated under
Section 79 of the 1983 Act). It is in the aforesaid view of the matter, that
the Deputy Registrar, Cooperative Societies declined to record the name
                                                                                H
312             SUPREME COURT REPORTS                             [2016] 4 S.C.R.



A     oflndrani Wahi, as the successor of the flat originally allotted to Biswa
      Ranjan Sengupta. The instant determination was referred to in an order
      dated 11.11.2003. A relevant extract of the same is reproduced hereunder:
             "With reference to his letter above, this is to inform him that as
             Late Sengupta had family of his own, the nomination made by
B            late Sengupta in favour ofSmt. Wahi can't be accepted, as it was
             not done in terms of section 79 of W.B.C.S. Act read with Rule
             127 of the W.B.C.S. Rules, 1987.
             Hence Jetter of administration/ succession certificate is required
             in favour of Smt. Wahi in terms of Rules 128 ofW.B.C.S. Rules,
             1987."
c
                                                               (Emphasis is ours)
      It is apparent, that through the aforesaid communication, the transfer of
      the flat in the name of the appellant was declined on the ground, that the
      appellant being a married daughter did not fall within the definition of
      term 'family' as contemplated under Section 79 of the I 983 Act [read
D
      with Rule 127 of the West Bengal Co-operative Societies Rules, 1987
      (hereinafter referred to as 'the 1987 Rules']. And that, being a married
      daughter, lndrani Wahi was not a member of the family ofBiswa Ranjan
      Sengupta.
              9. It would also be relevant to mention, that the aforesaid
E
      ·communication dated 11.11.2003, did not deal with the issue of succession
       of interest of the above flat, after the death of Biswa Ranjan Sengupta.
       A copy of the aforesaid communication dated l I .11.2003 was sent to
       the appellant- Jndrani Wahi, by the Secretary of'the Cooperative Society'
       through a forwarding letter dated I 3. I I .2003.
 F            I 0. Aggrieved with the decision taken by the authorities, in rejecting
      the appellant's claim with reference to the transfer of the flat under
      reference, the appellant assailed the order of the Deputy Registrar,
      Cooperative Societies dated 11.11.2003, and that of the Secretary of
      'the Cooperative Society' dated 13.11.2003, by preferring Writ Petition
G     No.33(W) of 2004, before the High Comi of Judicature at Calcutta
      (hereinafter referred to as 'the High Court'). The aforesaid writ petition
      came to be allowed by a learned Single Judge of the High Court, vide an
      order dated 24.03.2004. In recording its conclusion, the High Court, inter
      alia, held that the Deputy Registrar of the Cooperative Societies was not
. I
      justified to exclude the appellant being a daughter of the original member
INDRANI WAHI v. REGISTRAR OF COOP. SOCIETIES & ORS.                              313
            [JAGDISH SINGH KHEHAR, J.]

- Biswa Ranjan Sengupta from the purview of the provisions of the                 A
1983 Act, and the 1987 Rules framed thereunder. In fact, the High
Court, in its conclusions, expressly recorded, that Rule 127 of the 1987
Rules include major sons and daughters as members of the family, in
addition to minor sons and daughters, without any clarification as to their
marital status. The High Court accordingly held, that the married
                                                                                  8
daughters were not excluded from the purview of Rule 127 of the 1987
Rules. Having so concluded, the teamed Single Judge of the High Court,
directed the Registrar of the Cooperative Societies to grant the necessary
approval for transfer of the membership in the name oflndrani Wahi, as
nominee ofBiswa Ranjan Sengupta.
      11. The mother of.the appellant- Parul Sengupta, and her brother            c
- Dhruba Jytoi Sengupta, being aggrieved of the order passed by the
learned Single Judgt: dated 24.03.2004, assailed the same, by preferring
F.M.A.No.356 of 2004. Vide the impugned order dated 07.10.2004, a
Division Bench of the High Court, relying upon the judgment rendered
by this Court in Usha Ranjan Bhattacharjee vs. Abinash Chandra                    D
Chakraborty, (1997) I 0 SCC 344, Smt. Sarbati Devi vs. Smt. Usha Devi,
(1984) I SCC 424 and Gayatri De vs. Mousumi Cooperative Housing
Society Limited, (2004) 5 SCC 90, inter alia, concluded:
       "We do not propose to hold that the writ petitioner, in whose favour
       nomination has been made, shall not be made a member of the                E
       said society and having regard to the legislature intent contained
       in sub-section (4) of Section 69 it may not be possible for us to
       direct the appellants to be joint members along with the writ
       petitioner, but to protect the interest of the appellants in the flat
       which they have inherited, it is necessary for the said Society to
       record their interest expressly in the share Certificate as well as        F
       in its records pertaining to members and, in particular in the register
       of members so that one of the joint owners merely because of the
       nomination in her favour cannot transfer either the share, in which
       she has a part interest, or the allotment, where also she has a part
       interest, for the same is expressly declared to be transferable            G
       and, accordingly, can only be transferred by expressing consent
       of all the heirs.
       With the above we dispose of the appeal without, however, any ..
       order as to costs."
                                                                                  H
314            SUPREME COURT REPORTS                            [2016] 4 S.C.R.


A     Dissatisfied with the aforesaid determination of the High Court, lndrani
      Wahi has approached this Comt by filing the present appeal.
             12. Before dealing with the controversy in hand, it is imperative
      for us to refer to the judgments relied upon by the Division Bench in
      recording its conclusion. Reference may first be made to the Usha Ranjan
B     Bhattacharjee case (supra), wherein this Court dealt with Sections 69
      and 70 of the West Bengal Co-operative Societies Act, 1973 (hereinafter
      referred to as 'the 1973 Act'). Sections 69 and 70 of the 1973 Act came
      up for interpretation at the hands of this C0t1rt in the above-mentioned
      judgment. Sections 69 and 70 aforementioned are extracted hereunder:
c           "69. If the by-laws of a co-operative society so permit, any,
            member of the society may, in accordance with the rules, nominate
            a person in whose favour the society shall dispose of the share or
            interest of such member on his death.
            70. (I) When any member ofa co-operative society dies, his share .
D           and interest in the society shall, subject to the provisions of sections
            50 and 68 and to the fu1ther provisions of this section, be
            transferred -
                (a) to the person, if any, nominated in accordance with the
                provisions of section 69; or
E               (b) ifthere be no such nominee or, ifthe existence and residence
                of such nominee cannot be ascertained by the managing
                committee, or if for any other cause such transfer cannot be
                made without unreasonable delay, to the person who (subject
                to the production by him of probate, letters ofadministration or
                succession certificate) appears to the managing committee to
 F
                be entitled, in accordance with the rules, to possession of such
                share or interest as part of the estate of the deceased member;
                or
                (c) on the application of the person referred to iri'clause (b)
                within three months of the death of the deceased member, to
G
                any person specified in the application.
            (2) If the share or interest of the deceased cannot be legally
            transferred in accordance with the provisions of sub-section (I),
            or if the person, to whom the share or interest is payable under
            that sub-sect·ion within one year of the death of the deceased
H
INDRANI WAHi v. REGISTRAR OF COOP. SOCIETIES & ORS.                           315
            [JAGDISH SINGH KHEHAR, J.]

      member, claims payment of the value of such share or interest, or        A
      ifthe society in accordance with the rules and by-laws decides
      to proceed according to this sub-section - -
         (a) the share shall be transferred to some other person qualified
         in accordance with the provisions of section 68 to be the
         transferee of the share, on receipt from such person of the           8
         value thereof; and
         (b) the value of the share or interest of the deceased member,
         determined in accordance with the rules, shall be paid to the
         person nominated in accordance with the provisions of section
         69 or to the person appearing to be entitled to possession of         c
         such share or interest as aforesaid, after deducting the amount
         of any sum payable       under this Act to the society from the
         estate of the deceased member."
The factualposition that arose for consideration has been recorded in
paragraph 3 of the above judgment, and the reasons for not accepting           D
the determination rendered by the High Court, as also, the proposition
canvassed at the hands of the learned counsel appearing for the appellant
were dealt with in paragraphs 3 to 6 of the Usha Ranjan Bhattacharjee
case (supra). The same are being extracted below:
      "3. The dispute arose when the Cooperative Society wanted to             E
      hand over the possession of the said flat to Shri Chakraborty
      because the appellants were found in physical possession of the
      said flat. The case of the appellants was that since Shri Ranendra
      Kumar Achatya died intestate, they had inherited the said property
      of Ranendra Kumar Acharya according fo the rules of intestate
      succession under the Hindu Succession Act. The respondent,               F
      however, contended that as nomination was made in his favour,
      the Cooperative Society was under a duty to hand over the
      possession of the said flat in favour of the respondent. Such dispute
      ultimately was raised before the Cooperative Tribunal. The
      Cooperative Tribunal held that there had been a valid nomination
                                                                               G
      in favour of the respondent by the deceased Shri Ranendra Kumar
      Acharya but the Tribunal held that the question of title to the
      property was to be adjudicated by an appropriate forum if the
      parties would approach such forum. Since no direction for handing
      over the possession of the flat in favour ofShri Abinash Chandra
                                                                               H
316      SUPREME COURT REPORTS                           [2016] 4 S.C.R.



A     Chakraborty was given, a writ petition was filed before the High
      Court against the decision of the Cooperative Tribunal. The learned
      Single Judge disposed of such Writ Petition being CO No. 766 of
      1987. The learned Single Judge directed the Cooperative Society
      to hand over the possession of the said flat in favour of the said
      Abinash Chandra Chaktraborty under Section 70 of the
B
      Cooperative Societies Act, 1973. The learned Judge also made
      observation about the effect of such nomination under the said
      Act by indicating that in view of such nomination, the party in
      whose favour valid nomination had been made under Section 69 of
      the said Act must be held to have acquired title to the property.
c     Such decision of the learned Single Judge was challenged before
      the Division Bench of the High Court in appeal. By the impugned
      judgment, the Division Bench has dismissed the appeal and has
      upheld the decision of the learned Single Judge.
      4. In our view, Mr. Amal Ganguli, learned Senior Counsel appearing
D     for the appellants, has rightly contended that within the limited
      scope of Section 69 and 70 of the West Bengal Cooperative
      Societies Act, 1973, the Cooperative Tribunal was not required to
      determine the disputed question of title between the parties in
      dispute and the High Court had also gone wrong in holding that
      when a valid nomination is made, the nominee acquires title to the
E     property in question.
      5. Dr. Shanker Ghosh, learned Senior Counsel appearing for the
      respondent has, however, submitted that the West Bengal
      Cooperative Societies Act, 1973 is a complete code by itself and
      since the said Act is applicable notwithstanding anything contained
 F    in any other Act, if a rival claim of title to the property is raised,
      the Cooperative Tribunal is not incompetent to decide such title.
      6. We are, however, not inclined to accept such contention of Dr.
      Ghosh. In our view, within the limited scope ofinquiiy to be made
      for determining the qu~stion of valid nomination under Section 69,
 G    title to the property cannot be detennined. In terms of detennination
      of valid nomination the consequential direction for deliverv of
      possession can be given in favour of the person having valid
      nomination under the provisions of Section 70 of the Cooperative
      Societies Act. The dispute as to the question of title is not to be
H     decided within the limited scope and ambit of Sections 69 and 70 of
INDRANI WAHi v. REGISTRAR OF COOP. SOCIETIES & ORS.                           317
            [JAGDISH SINGH KHEHAR, J.]

      the cooperative Societies Act. We, therefore, dispose of this appeal    A
      by directing that in view of the finding by the Tribunal that the
      respondent had obtained a valid nomination from the deceased
      Ranendra Kumar Acharya, the respondent is entitled to get the
      possession of the said flat in accordance with the provisions
      of Section 70 of the Cooperative Societies Act. But the dispute
                                                                               B
      as to the title of the said flat should not be held to have been
      decided either by the Cooperative Tribunal or by the High Court
      by the impugned judgment. Such question is kept open to be
      decided by an appropriate forum if such challenge is made before
    · the appropriate forum. This appeal is accordingly disposed of
      without any order as to costs."                                          c
                                                      (Emphasis is ours)
      There can be no doubt about the fact, that in the above cited case,
      a Division Bench of this c;:ou11 had arrived at the conclusion, that
      the High Court erred while concluding, that the holding of a valid
      nomination could ipso facto result in the transfer of title in favour    D
      of the nominee. Despite recording the above conclusion, this Court
      ultimately held, that consequent upon a valid nomination having
      been made under Section 69, the nominee would be entitled to
      possession, and further, that the issue of title had to be left to be
      adjudicated upon between the contesting parties.
                                                                               E
      13. We shall now deal with the judgment in the Smt. Sarbati Devi
case (supra). The issue which came up for adjudication in the above
judgment related to the interpretation of Section 39 of the Life Insurance
Act, 1938. The rights of a nominee of a policy holder, were adjudicated
upon in the above judgment. Paragraphs 4, 5 and 12 of the judgment
record the conclusions of this Court, with reference to the rights of a        F
nominee of a policy holder. The aforesaid paragraphs are extracted herein
below:
      "4. At the outset it should be mentioned that except the decision
      of the Allahabad High Court in Kesari Devi v. Dharma Devi AIR
      1962 All 355 on which reliance was placed by the High Court in           G
      dismissing the appeal before it and the two decisions of the Delhi
      High Court in S. Fauza Singh v. Kuldip Singh AIR 1978 Del 276
      and· Uma Sehgal v. Dwarka Dass Sehgal AIR 1982 Del 36 in all                  /

      other decisions cited before us the view taken is that the nominee
      µnder Section 39 of the Act is nothing more than an agent to receive     H
318      SUPREME COURT REPORTS                           [2016] 4 S.C.R.



A     the money due under a life insurance policy in the circumstances
      similar to those in the present case and that the money remains
      the property of the assured during his lifetime and on his death
      forms part of his estate subject to the law of succession applicable
      to him. The cases which have taken the above view are Ramballav
      Dhandhania v. Gangadhar Nathmall AIR 1956 Cal 275; Life
B
      Insurance Corporation oflndia v. United Bank oflndia Ltd.AIR
       1970 Cal 513, D. Mohanavelu Muldaliar v. Indian Insurance and
      Banking Corporation Ltd. Salem AIR 1957 Mad 115, Sarojini
      Amma v. Neelakanta Pillai AIR 1961 Ker 126; Atmaram Mohanlal
      Panchal v. Gunvantiben AIR 1977 Guj 134, Ma Iii Dei v. Kanchan
c      Prava Dei AIR 1973 Ori 83 and Lakshmi Amma v. Saguna
       Bhagath !LR 1973 Kant 827, Since there is a conflict of judicial
      opinion on the question involved in this case it is necessary to
      examine the above cases at some length. The law in force in
       England on the (!bove question is summarised in Halsbury's Laws
      of England (Fomth Edition), Vol. 25, Para 579 thus;
D
         "579. Position of third party, The policy money payable on the
         death of the assured may be expressed to be payable to a third
         paity and the third pa1ty is then prima facie merely the agent
         for the time being of the legal owner and has his authority to
         receive the policy money and to give a good discharge; but he
 E
         generally has no right to sue the insurers in his own name. The
         question has been raised whether the third party's authority to
         receive the policy money is terminated by the death of the
         assured; it seems, however, that unless and until they are
         otherwise directed by the assured's personal representatives
 F       the insurers may pay the money to the third party and get a
         good discharge from him."
      5. We shall now proceed to analyse the provisions of Section
      39 of the Act. The said section provides that a holder of a policy
      oflife insurance on his own life may when effecting the policy or
 G    at any time before the policy matures for payment nominate the
      person or persons to whom the money secured by the policy shall
      be paid in the event of his death. If the nominee is a minor, the
      policy holder mav appoint any person to receive the money in the
      event of his death during the minority of the nominee. That means
      that ifthe policy holder is alive when the po lie' matures for payment
 H
INDRANI WAHi v. REGISTRAR OF COOP. SOCIETIES & ORS.                      319
            [JAGDISH SINGH KHEHAR, J.]

    he alone will receive payment of the money due under the policy A
    and not the nominee. Any such nomination may at any time before
    the policy matures for payment be cancelled or changed, but before
    such cancellation or change is notified to the insurer ifhe makes
    the payment bon fide to the nominee already registered with him,
    the insurer gets a valid discharge. Such power of cancellation of·
                                                                            8
    or effecting a change in the nomination implies that the nominee
    has no right to the amount during the lifetime of the assured. If
    the policy is transferred or assigned under Section 38 of the Act,
    the nomination automatically lapses. If the nominee or where there
    are nominees more than one all the nominees die before the policy
    matures for payment the money due under the policy is payable c
    to the heirs or legal representatives or the holder of a succession
    certificate. It is not necessary to refer to sub~section (7) of Section
    39 of the Act here. But the summary of the relevant provisions
    of Section 39 given above establishes clearly that the policy holder
    continues to hold interest in the policy during his lifetime and the
                                                                            D
    nominee acquires no sort of interest in the policy during the lifetime
    of the policy holder. If that is so, on the death of the policy holder
    the amount payable under the policy becomes part of his estate
    which is governed by the law of succession applicable to him.
    Such succession may be testamentary or intestate. There is no
    warrant for the position that Section 39 of the Act operates as a E
    third kind of succession which is styled as a 'statutory testament'
     in paragraph 16 of the decision of the Delhi High Court in Mrs.
     Uma Sehgal's case (supra). If Section 39 of the Act is contrasted
    with Section 38 of the Act which provides for transfer or
    assignment of the rights under a policy, the tenous character of
                                                                            F
    the right of a nominee would become more pronounced. It is
    difficult to hold that Section 39 of the Act was intended to act as
    a third mode of succession provided by the statute. The provision
     in sub-section (6) of Section 39 which says that the amount shall
     be payable to the nominee or nominees does not mean that the
    amount shall belong to the nominee or nominees. We have to bear G
     in mind here the special care which law and judicial precedents
     take in the matter of execution and proof of wills which have the
     effect of diverting the estate from the ordinary course of intestate
     succession and that the rigour of the rules governing the
     testamentary succession is not relaxed even where wills are
                                                                            H
320            SUPREME COURT REPORTS                           [2016) 4 S.C.R.



A           registered.
            12. Moreover there is one other strong circumstance in this case
            which dissuades us from taking a view contrary to the decisions
            of all other High Courts and accepting the view expressed by the
            Delhi High Court in the two recent judgments delivered in the
B           year 1978 and in the year 1982. The Act has been in force from
            the year I 938 and all along almost all the High Courts in India
            have taken the view that a mere nomination effected under Section
            39 does not deprive the heirs of their rights in the amount payable
            under a life insurance policy. Yet Parliament has not chosen to
            make any amendment to the Act. In such a situation unless there
c           are strong and compelling reasons to hold that all these decisions
            are wholly erroneous, the Court should be slow to take a different
            view. The reasons given by the Delhi High Court are unconvincing.
            We, therefore, hold that the judgments of the Delhi High Court in
            Fauja Singh's case (supra) and in Mrs. U ma Sehgal's case (supra)
D           do not lay down the law correctly. They are, therefore, overruled.
            We approve the views expressed by the other High Courts on the
            meaning of Section 39 of the Act and hold that a mere nomination
            made under Section 39 of the Act 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.
 E          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."
 F                                                           (Emphasis is ours)
      At this juncture, all that needs to be stated with reference to the judgment
      in the Smt. Sarbati Devi case (supra) is, thatthe provisions with reference
      to nomination under the Life Insurance Act, 1938 are at variance from
      the ones which are subject matter of consideration in the instant case,
 G    and as such, it would suffice to merely state, that the aforesaid judgment
      is not of much significance, insofar as the adjudication of the present
      controversy is concerned.
            14. Insofar as the judgment in the Gayatri De case (supra) is
      concerned, the same expressly dealt with the provisions of the 1983
 H    Act. Despite the above, it would be pertinent to mention, that the said
INDRANI WAHI v. REGISTRAR OF COOP. SOCIETIES & ORS.                                321
            [JAGDISH SINGH KHEHAR, J.]

judgment is also of no relevance for the present controversy, because               A
there was no nomination of the original member, in the said controversy.
And as such, Section 79 did not come up for consideration and
interpretation therein, in the manner of the dispute and controversy which
has arisen herein.
       15. Herein, the original member- Biswa Ranjan Sengupta, in whose             B
name Flat No.4-RB 2/3, Purbachal Housing Estate, Phase-II, Sector-
III, Salt Lake City, Kolkatta, was entered, had recorded the name of his
daughter- lndrani Wahi (the appellant herein) as his sole nominee. The
aforesaid nomination was made in terms of Section 79 of the 1983 Act.
We are of the view, that Sections 79 and 80 of the 1983 Act are of
pointed significance for the determination of the controversy in hand.
                                                                                    c
The same are accordingly reproduced hereunder:
      "79. Nomination of transferee.- Subject to the by-laws of a co-
      operative society and (sic any) member of such co-operative
      society may in accordance with the rules nominate a person in
      whose favour the co-operative society shall dispose of the share              D
      or interest of such member on his death.
       80. Disposal of deceased member's share of interest- (I) On the
       death of a member of a co-operative society, other than a central
       society, his share or interest in the co-operative society shall, subject
       to the provisions of sections 57 and 78 and to the further provisions        E
       under section 79; or
          (a) to the person, if any, nominated under section 79; or
          (b) if there is no nominee or if the existence or residence of
          the nominee cannot be ascertained by the board or if, for any
                                                                                    F
          other cause, the transfer cannot be made without unreasonable
          delay, to the person who (subject to the production by such
          person of probate, letter of administration or succession
          certificate) appears to the board to the entitled in accordance
          with the rules to the possession of such share or interest as
          part of the estate of the deceased member; or                             G
          ( c) on the application of the person referred to in clause (b)
          within three months from the date of death of the member, to
          such person as may be specified in the application.
       (2) If the share or interest of a deceased member cannot be
                                                                                    H
322            SUPREME COURT REPORTS                           [2016] 4 S.C.R.



A           transferred in     accordance with the provisions of sub-section
            (I) or if the person to whom such share or interest is payable
            under that sub-section claims payment of the value of such share
            or interest or ifthe co-operative society in accordance with the
            rules and its by-laws decides to proceed under this sub-section -
B               (a) the share shall be transferred to a person qualified to be a
                transferee of the share, under section 78 on receipt of the
                value of the share from such person; and
                (b) the value of the share or the interest of the deceased member
                determined in accordance with the rules shall be paid to the
c               person nominated under section 79 or to the person referred to
                in clause (b) of sub-section (I) of this section after deducting
                the amount payable under this Act to the co-operative society
                from the estate of deceased member."
      Having perused the aforesaid provisions, there can be no doubt, that
D     where a member of a cooperative society nominates a person in
      consonance with the provisions of the Rules, on the death of such member,
      the cooperative society is mandated to transfer all the share or interest
      of such member in the name of the nominee. The above interpretation
      of Section 79, at our hands, also emerges from Section 80(1 )(a) which
      postulates, that the share or interest of a member of the society, "on his
 E    death" shall be transferred to a person "nominated under Section 79". lt
      is also essential to notice, that the rights of others on account of an
      inheritance or succession is a subservient right. Only if a member had
      not exercised the right of nomination under Section 79, then and then
      alone, the existing share or interest of the member would devolve by
 F    way of succession or inheritance. The heading of Section 80 - "Disposal
      of deceased member's share of interest" lends further credence to the
      above interpretation.
            16. In addition to the aforesaid statutory provisions, we would like
      to make a reference to Rules 127 and 128 of the West Bengal Co-
G     operative Societies Rules, 1987 (hereinafter referred to as 'the 1987
      Rules'). Rules 127 and 128 of the 1987 Rules are extracted below:
            "127.Nomination of transferee.- (I) A member of a co-operative
            Society may in accordance with the provision of Section 79,
            nominate in writing any person belonging to his family to whom
            the share or interest or the value of such share or interest shall, on
 H
INDRANI WAHI v. REGISTRAR OF COOP. SOCIETIES & ORS.                          323
            [JAGDISH SINGH KHEHAR, J.]

    his death, be paid or transferred under the provision of the Act:        A
    Provided that if a member has no family he may nominate any
    person to whom such share or interest or the value of such share
    or interest shall be paid or transferred:
    Provided further that such member may, from time to time, revoke
    such nomination and make a fresh nomination.                              B

    (2) Every co-operative socie.ty shall keep a register of all person
    (sic persons) so nominated.
    (3) In case the nominee of a member dies, the member shall
    report the death to the society, and make a fresh nomination ifhe         c
    so desires.
                                                                                   ,•
    Explanation.- For the purpose of this rule a family shall have the
    same meaning as given in the Explanation to sub-section (2) of
    Section 13 and shall include major sons and daughters.
    128.       Disposal of deceased member's share or interest and            D
    procedure for calculation of value of shares.- (I) When upon the
    death of a member of a co-operative society, the question of
    transferring the share, or paying interest of such deceased member
    arises, and the board of such society finds that the deceased
    member did not make any nomination in accordance with the
                                                                              E
    provisions of section 79, or that the existence or residential address
    of the person nominated cannot be ascertained, or that for any
    other sufficient cause such transfer of payment cannot be made
    without unreasonable delay, the board may transfer the share or
    pay interest of such deceased member in favour of or to any
    person who presents in writing his or her claim for the said share        F
    or interest and produces, in support of such claims, probate, letter
    of administration or succession certificate issued by a competent
    court having jurisdiction, and makes a written declaration in an
    affidavit before a Magistrate that he or she is the rightful claimant,
    being the legal heir or representative of the deceased.
                                                                              G
    (2) (a) Where a co-operative society has to make a refund of the
    value of a share, the value of the share shall be deemed to be
    equal to the amount paid upon the share:
    Provided that where a portion of the assets is estimated to be bad
    or doubtful in the latest audited balance sheet, and is not covered       H
324            SUPREME COURT REPORTS                           [2016] 4 S.C.R.



A           by funds created out of profits, the board may, for the purposes of
            such payment, reduce the value of the share in the same proportions
            as the aggregate amount of assets which are not bad or doubtful,
            less the amount of outside liabilities, bears to the paid-up share
            capital.
B           (b) Where a transfer of share or interest is made, the value of the
            share or interest shall be deemed to be the sum actually paid by
            the member for the acquisition of such share or interest."
             17. In the same manner as is postulated under Section 79 of the
      1983 Act, Rule 127 of the I 987 Rules provides, that if a nomination has
c     been made by a member under Section 79, the share or interest or the
      value of such share or interest standing in the name of the deceased
      member, would be transferred to the nominee. It is however, necessary
      to notice that Rule 127 postulates nomination only in favour of a person
      "belonging to his family". It is not necessary for us to deal with the
      issue whether the appellant- lndrani Wahi, being a married daughter of
D     the original member - Biswa Ranjan Sengupta, could be treated as a
      member of the family, of the deceased member (Biswa Ranjan Sengupta),
      because the learned Single Judge, as also, the Division Bench of the
      High Court concluded, that the appellant- lndrani Wahi was a member
      of the family, of the original member - Biswa Ranjan Sengupta. This
 E    conclusion has not been assailed by the respondents, before this Court.
             18. Rule 128 of the 1987 Rules also leads to the same inference.
      Inasmuch as Rule 128 aforementioned provides, that only in the absence
      of a nominee, the transfer of the share or interest of the erstwhile member,
      would be made on the basis of a claim supported by an order of probate,
 F    a letter of administration or a succession certificate (issued by a Court
      of competent jurisdiction).
             19. Insofar as the instant aspect of the matter is concerned, there
      is no doubt in our mind, that even Rules I 27 and 128 of the 1987 Rules,
      lead to the inference, that in case of a valid nomination, under Section 79
 G
      of the 1983 Act, 'the Cooperative Society' is liable to transfer the share
      or interest of a member in the name of the nominee. We hold accordingly.
            20. Having recorded the above conclusion, it is imperative for us
      to deal with the conclusion recorded in paragraph 6 (already extracted
      above) of the judgment of this Court in the Usha Ranjan Bhattacharjee
      case (supra). In this behalf, it is necessary to clarify that transfer of
 H
INDRANI WAH! v. REGISTRAR OF COOP. SOCIETIES & ORS.                            325
            [JAGDISH SINGH KHEHAR, J.]

share or interest, based on a nomination under Section 79 in favour of         A
the nominee, is with reference to the concerned C9operative Society,
and is binding on the said society. The Cooperative Society has no
option whatsoever, except to transfer the membership in the name of
the nominee, in consonance with Sections 79 and 80 of the 1983 Act
(read with Rules 127 and 128 of the 1987 Rules). That, would have no
                                                                                B
relevance to the issue oftitle between the inheritors or successors to the
property of the deceased. Insofar as the present controversy is concerned,
we therefore hereby direct 'the Cooperative Society' to transfer the
share or interest of the society in favour of the appellant- lndrani Wahi.
It shall however, be open to the other members of the family (presently
only the son ofBiswa Ranjan Sengupta - Dhruba Jyoti Sengupta; we                c
are informed that his mother - Parul Sengupta has died), to pursue his
case of succession or inheritance, ifhe is so advised, in consonance with
law.
      21. The appeal stands allowed in the above terms.
Civil Appeal No.4930 of 2006                                                    D

      22. Learned counsel for the parties are agreed, that the controversy
raised in the instant appeal be disposed of in terms of the order passed
by this Court in Indrani Wahi vs. Registrar of Co-operative Societies &
Ors. (C.A.No.4646 of2006) decided on 10.03.2016.
                                                                                E
       23. In view of the above, the instant appeal is disposed of in terms
of the judgment rendered by this Court in the Indrani Wahi case (supra).
Kalpana K. Tripathy                                     Appeals disposed of.