Nomination in a Co-operative Society
A member or shareholder in a Cooperative Society is entitled to nominate a person or persons to whom the shares should be transferred by the Society after the demise of the member.
The concept of nomination is to simplify the matters for the Society after its member dies so that the Society does not have to spend time and money in finding the heirs or legatees of the deceased members. The Society simply transfers the shares to the name of the nominee in ordinary course.
However nomination does not amount to a Will and a nominee is a trustee for the real owner.
In most of the cases the nominee is the sole or one of the heirs of the member or a legatee or one of the legatees under the Will of the member. If the nominee is the sole beneficiary either as heir or legatee then he will be justified in asking the Society to transmit the shares in his sole name.
However if the nominee is not the sole beneficiary then it is the duty of the nominee as trustee to bring this fact to the notice of the Society and have the names of other beneficiaries added in the share certificate.
If after considerably long time no person stakes any claim to the shares of the Society then the Society may give effect to the nomination and transmit the shares in the name of the nominee.
However it would be safer for the Society to officially inquire with the nominee whether there are any other beneficiaries of the shares and then act accordingly, so that in future if any beneficiary challenges the action of the Society, it can safely point out that reasonable inquiry was made with the nominee before transmitting the shares to the name of the nominee.
Incidentally a Hindu married male dying without a will, shall have his mother, wife and children as heirs each having equal share in the estate. However a Hindu married female dying without a will have her husband and children as heirs having equal share in the estate.
This article has been written by Rajan Jayakar, Advocate and Solicitor, and Trustee, V Citizens Action Network.
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