Tuesday, February 28, 2017



                       IN THE SUPREME COURT OF INDIA

                         CIVIL APPELLATE JURISDICTION

                         CIVIL APPEAL No.4646 OF 2006

INDRANI WAHI                                       .......APPELLANT




                       CIVIL APPEAL No.4930 OF 2006

                               J U D G M E N T


CIVIL APPEAL No.4646 OF 2006

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,  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 – Indrani Wahi, in terms of the 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”.
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
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  `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-III, 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  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  (Indrani  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,  sent  all  papers  with  reference  to  the  transfer  of   the
membership of `the Cooperative  Society'  from  the  name  of  Biswa  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.
5.           On  01.09.2003,  having  got  wind  of  the  transfer  of   the
membership of `the 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  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 Indrani  Wahi
had been recorded as a nominee of Biswa Ranjan Sengupta, in the  records  of
`the Cooperative Society', and if  Parul  Sengupta  desired  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:

“(1)  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. Indrani Wahi, where he eventually died. A  copy of his  'Will'
 is enclosed 'which will speak itself'.  We reiterate  our  views  that  his
daughter in the “legal nominee”.

(2)   Salary Certificate dated 22.9.03 of Mrs. Indrani Wahi is attached.

(3)   In the State of U.P., there is no law regarding profession  tax  which
has been certified in the Salary Certificate itself.

(4)   The provision of Registration Act, 1908 will not apply in  this  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)

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'  again
informed Parul Sengupta, through a letter dated 16.10.2003,  that  the  name
of Indrani 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  letter  dated  20.10.2003  to  the
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  of  Indrani
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  late  Sengupta  in
favour of Smt. 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 letter  of  administration/  succession  certificate  is  required  in
favour of Smt. Wahi in terms of Rules 128 of W.B.C.S. Rules, 1987.”

                                  (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 1983  Act  [read  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,
Indrani Wahi was not a member of the family of Biswa Ranjan Sengupta.
9.          It would  also  be  relevant  to  mention,  that  the  aforesaid
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  11.11.2003  was  sent  to  the
appellant – Indrani Wahi, by the  Secretary  of  `the  Cooperative  Society'
through a forwarding letter dated 13.11.2003.
10.         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  No.33(W)
of 2004, before the  High  Court  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 justified  to
exclude the appellant being a  daughter  of  the  original  member  –  Biswa
Ranjan Sengupta from the purview of the provisions of the 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 daughters were  not  excluded  from
the purview of Rule 127  of  the  1987  Rules.   Having  so  concluded,  the
learned 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  of  Indrani  Wahi,  as  nominee  of  Biswa  Ranjan
11.         The mother of the appellant – Parul Sengupta, and her brother  –
Dhruba Jytoi Sengupta, being aggrieved of the order passed  by  the  learned
Single  Judge  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  Chakraborty,  (1997)  10
SCC 344, Smt. Sarbati Devi vs. Smt. Usha Devi, (1984) 1 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  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  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
and, accordingly, can only be transferred by expressing consent of  all  the
      With the above we dispose of the appeal without,  however,  any  order
as to costs.”

Dissatisfied with the aforesaid determination of  the  High  Court,  Indrani
Wahi has approached this Court 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
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  Court  in  the  above-mentioned
judgment. Sections 69 and 70 aforementioned are extracted hereunder:
“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.   (1) When any member of a co-operative  society  dies,  his  share  and
interest in the  society shall, subject to the  provisions  of  sections  50
and 68 and to the further   provisions of this section, be transferred -

      (a)   to  the  person,  if  any,  nominated  in  accordance  with  the
provisions of section 69; or
      (b)   if there be no such nominee or, if the 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  of
administration  or  succession  certificate)     appears  to  the   managing
committee to 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  in  clause  (b)  within
three months of the death of the deceased member, to  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 (1), or if  the
person, to whom the share or interest  is  payable  under  that  sub-section
within one year of the death of the deceased member, claims payment  of  the
value of such share or interest, or if the 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 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  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 factual position that arose for consideration  has  been  recorded
in paragraph 3 of the above judgment, and the reasons for not accepting  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 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  Acharya  died  intestate,  they  had
inherited the said property of  Ranendra  Kumar  Acharya  according  to  the
rules  of  intestate  succession  under  the Hindu   Succession   Act.   The
respondent, 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 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 of Shri  Abinash  Chandra  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
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.  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  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 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 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 of inquiry to  be  made  for  determining
the question of valid nomination under Section 69,  title  to  the  property
cannot be determined. In terms of  determination  of  valid  nomination  the
consequential direction for delivery 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  decided  within  the  limited  scope  and   ambit   of Sections
69 and 70 of the cooperative Societies Act. We, therefore, dispose  of  this
appeal 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 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.”                                         (Emphasis is ours)
There can be no doubt about the fact,  that  in  the  above  cited  case,  a
Division Bench of this Court 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  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.

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 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 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 under Section 39 of the Act is nothing more  than  an  agent  to
receive 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 Insurance Corporation  of  India  v.  United
Bank of India 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, Malli Dei v. Kanchan Prava Dei  AIR  1973  Ori
83 and Lakshmi Amma v. Saguna Bhagath ILR 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 above question is summarised in Halsbury's  Laws  of  England
(Fourth Edition), Vol. 25, Para 579 thus :
"579. Position of third party, The policy money payable on the death of  the
assured may be expressed to be payable to a third party and the third  party
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 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 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 of  life  insurance
on his own life may when effecting the policy or  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 may appoint any person to receive  the
money in the event of his death during the minority  of  the  nominee.  That
means that if the policy  holder  is  alive  when  the  policy  matures  for
payment he alone will receive payment of the  money  due  under  the  policy
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 if he makes the  payment  bon  fide  to
the  nominee  already  registered  with  him,  the  insurer  gets  a   valid
discharge. Such power of cancellation  of  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 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 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  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 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 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 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 year 1978 and in the year  1982.  The  Act
has been in force from the year 1938 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  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. Uma Sehgal's case (supra) 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. 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.”
                                            (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, that the 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, 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  Act.
Despite the above, it would be pertinent to mention, that the said  judgment
is also of no relevance for the present controversy, because  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
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  –
Indrani 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.  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 or interest of such  member  on
his death.

80.   Disposal of deceased member's share of interest- (1) 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 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 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
      (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
transferred in   accordance with the provisions of  sub-section  (1)  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  if  the  co-
operative society in accordance with the rules and      its by-laws  decides
to proceed under this sub-section -
            (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  person
nominated under section 79 or     to   the person referred to in clause  (b)
of sub-section (1) of this section after deducting      the  amount  payable
under this Act to the co-operative  society  from  the  estate  of  deceased

Having perused the aforesaid provisions, there can be no doubt,  that  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 death” shall be  transferred
to a person “nominated under Section 79”. It 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 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-
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.-  (1)  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  his  death,  be  paid  or
transferred under the provision of the Act:

            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.

            (2)  Every co-operative society 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  if  he  so

            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  procedure  for
calculation of value of shares.- (1) 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 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 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.

            (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  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)  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 1987 Rules 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  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 – Indrani Wahi, being  a  married  daughter  of  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 – Indrani Wahi was a member of the family, of the original  member
- Biswa Ranjan Sengupta. This  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,  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 127 and  128  of  the  1987  Rules,
lead to the inference, that in case of a valid nomination, under Section  79
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  share
or interest, based on a  nomination  under  Section  79  in  favour  of  the
nominee, is with reference to the  concerned  Cooperative  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 relevance to  the  issue  of
title 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 – Indrani Wahi. It shall however, be open to  the
other members of  the  family  (presently  only  the  son  of  Biswa  Ranjan
Sengupta – Dhruba Jyoti Sengupta; we are informed that his  mother  –  Parul
Sengupta has died), to pursue his case of succession or inheritance,  if  he
is so advised, in consonance with law.
21.         The appeal stands allowed in the above terms.

CIVIL APPEAL No.4930 OF 2006

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 of 2006) decided on 10.03.2016.

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

                                           (JAGDISH      SINGH       KHEHAR)


MARCH 10, 2016.

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