Q. A bonafide woman member in our society passed away intestate. She had given four nominations in 2017 and share certificates were prepared in their names, accordingly. One among them also passed away intestate in 2023.
Please, advise regarding the legal status of such a deceased nominee in case anyone from her family makes a claim. Pravin Sampat, Vashi A.
You have not mentioned the member's date of death. The Maharashtra Co-operative Societies (MCS) Act, 1960, had been amended in 2019. Prior to that, the shares, right and interest in the property were transferred to the nominee on submission of an application and indemnity bond in accordance with bylaw 34. However, it may be noted that if one gets membership on the basis of nomination, the person/s hold the flat in trust for the benefit of the ultimate legal heirs Such members do not have the right of ownership and cannot create third party rights, interest or alienation, whatsoever.
In order to have the ownership rights, the nominees should obtain a succession or heirship certificate from the competent authority. Subsequently, the shares, right, interest and title could be passed on to the person/s. Thus, in your case, the surviving nominees and the deceased nominee’s legal heir will be required to obtain a succession or heirship certificate to establish their right. Pursuant to the amendment to the MCS Act, section 154B-13 requires the nominees to be admitted as a provisional member until they submit to the society a valid succession or a heirship certificate, as the case may be. Without these documents, the transfer of shares, rights and interest will not happen.
Your query does not clarify the relationship of the deceased nominee with the deceased member. The Hindu Succession Act will be applicable and the legal heirs of the former will have proportionate share.
Q. The structural audit of our 29-year-old society has suggested repairs. We are interested in going for redevelopment in a year or two, however, the members are not willing to contribute an additional amount, while insisting to use the sinking fund for repairs. Whether the sinking fund can be utilised for such a purpose? Prakash Sule, Mulund A.
Yes, the sinking fund can be used for repairs suggested in a structural audit report, provided specific legal and procedural requirements are met. As per the MCS Act, the sinking fund is specifically earmarked for long-term capital expenditures, including major structural repairs and reconstruction. Such repairs must be classified as “heavy” or “major” structural additions/alterations and must be certified by the society's architect or a qualified structural auditor.
The managing committee cannot utilise the fund on its own. A resolution must be passed in a general body meeting specifically approving the repair work and the withdrawal from the sinking fund. The society should place the auditor's report, plans, estimates and recommended tenders before the general body for a final decision. Bylaw 14(c) explicitly states that the sinking fund may be used for reconstruction or structural additions/alterations necessary to strengthen the building, as recommended by an architect.
Once utilised, the society is generally expected to continue collecting contributions to maintain or replenish the mandatory minimum balance (typically 0.25% of the construction cost). It may be in good order to keep the district deputy registrar informed of the withdrawal and the purpose of utilisation.
The questions are answered by Sharmila Ranade, a legal expert associated with Mumbai Grahak Panchayat. The questions, in brief, may be sent to mpanchayat@gmail.com
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