HON'BLE SRI JUSTICE R. SUBHASH REDDY WRIT PETITION No.27000 of 2006 Date : 25.03.2011 Between : D. Chandra Mohan. …..Petitioner And The A.P.Co-operative Tribunal, Hyderabad & others. …..Respondents HON'BLE SRI JUSTICE R. SUBHASH REDDY WRIT PETITION No.27000 of 2006 ORDER : This writ petition is filed, seeking a Writ of Certiorari, to call for records from the 1st respondent in C.T.A.No.107 of 2001, and quash the order, dated 20.07.2006, passed in the said appeal. 2. The father of the petitioner, Late Sri D.Kistaiah was a member of the 3rd respondent-Cooperative Society. The 3rd respondent-Society was initially registered under the A.P. (Telangana Area) Co-operative Societies Act, 1952, which Act was repealed by A.P.Co-operative Societies Act, 1964. The father of the petitioner passed away on 10th July 1978, leaving behind his widow, by name, Smt. Shakuntala Bai and four sons including the petitioner, respondent No.5 and others. The father of the petitioner, by virtue of his membership in the 3rd respondent-Society, was allotted Unit No.5, bearing Municipal No.5-2-200/A/3 and 5-2-200/2/7 in New Osmangunj. After the death of the father of the petitioner, the membership was transferred in the name of their mother by name Shakuntala Bai. Smt. Shakuntala Bai also passed away on 24.04.1995, leaving behind her four sons; the petitioner, respondent No.5 and others. After the death of Smt. Shakuntala Bai, the membership in the 3rd respondent-Society along with the properties, was transferred in the name of the 5th respondent, basing on the nomination stated to have been given by Smt.Late Shakuntala Bai. After the death of Smt. Shakuntala Bai, the nomination in favour of respondent No.5 was approved by the general body of the Society. 3. The petitioner herein has raised arbitration dispute under Section 61 of the A.P.Co-operative Societies Act, 1964, before the Deputy Registrar of Co-operative Societies (Housing), Hyderabad, in A.R.C.No.38 of 1999. Such dispute was raised mainly stating that the 3rd respondent-Society has transferred the membership in favour of respondent No.5 without following the Rules and procedure and it was his case before the Arbitrator that all the four sons of Late Smt. Shakuntala Bai are legal heirs and are equally entitled for the properties left by her. It was his case before the Arbitrator that according to the succession, petitioner and his three brothers are to be made as members of the Society, by following the procedure. On the aforesaid pleas, he sought the relief to direct the 3rd respondent-Society to admit him as a member of the Society, duly cancelling the membership of the 5th respondent herein. Before the Arbitrator, the Society has filed a letter, dated 22.11.2000, explaining that the membership was transferred in the name of the 5th respondent, based on the nomination form signed by Late Smt. Shakuntala Bai, which was received in the office of the Society on 08.03.1995 before the death of Smt. Shakuntala Bai on 24.04.1995. The Arbitrator- Deputy Registrar of Co-operative Societies (Housing), Hyderabad, in A.R.C.No.38 of 1999, by recording a finding that the property which was devolved on Late Smt. Shakuntala Bai was not her self-acquired property, as such, the nomination made by her in favour of her youngest son the 5th respondent herein is not valid, has issued directions to the Society to transfer the membership in favour of the eldest son of Late Smt. Shakuntala Bai i.e. petitioner with the consent of the remaining brothers. It is further held that in case it is not possible, the petitioner herein shall be given 1/4th share of the value of the property. 4. As against the same, 5th respondent carried the matter by way of appeal before the A.P.Co-operative Tribunal, at Hyderabad. Before the appellate Tribunal, it was the case of the 5th respondent herein that Late Smt. Shakuntala Bai, who was a member of the Society, has nominated him as a successor to the properties held by her and the same is in conformity with Section 28(4) of the A.P.Co-operative Societies Act, 1964 and Rule 16 of the Rules made thereunder, read with byelaw 51 of the Society. It was further pleaded that the nomination was communicated to the Society on 08.03.1995 and it was duly accepted by the Managing Committee of the Society and transfer of shares was effected in his favour pursuant to the approval accorded in the Generalbody Meeting held on 13th January 1996. It was further pleaded that by the date of filing of arbitration case before the Arbitrator on 15th of December 1999, he has already transferred the property in favour of respondent No.4 herein on 27.10.1999 under intimation to the Society, therefore, the very petition filed by the petitioner was not maintainable. The Appellate Tribunal, mainly relying on the provisions under Section 28 of the A.P.Co-operative Societies Act, 1964, Rule 16 of the Rules made thereunder, read with byelaw 51 of the Society, has upheld the nomination held by Late Smt.Shakuntala Bai and further held that the Arbitrator has absolutely no right or authority to enter into the arena of deciding the matter relating to succession. By recording such a finding, the Appellate Tribunal has allowed the appeal by setting aside the Award by giving liberty to the parties to work out their succession rights before the Civil Court. 5. Heard learned counsel for petitioner Sri M.V.Durga Prasad, learned Government for Co-operation appearing for respondents 1 and 2, Sri M.Papa Reddy, appearing for respondent No.3, Sri R.N. Hemendranadh Reddy, appearing for respondent No.4 and Sri P.R.Prasad, for respondent No.5. 6. In this writ petition, it is contended by Sri M.V.Durga Prasad, learned counsel for petitioner that the very manner in which the name of the 5th respondent is recorded itself, is illegal and the 3rd respondent-Society has not followed the procedure at all. It is submitted that acceptance of nomination without inquiry, is illegal, and there is no reason or justification for the 3rd respondent- Society to accept the nomination in a Generalbody meeting held on 13th of January 1996, much after the death of Late Smt. Shakuntala Bai. It is submitted by learned counsel that the procedure followed by the respondents is not in conformity with the A.P.Co-operative Societies Rules. 7. On the other hand, it is submitted by the learned counsel appearing for respondents that as per the provisions under Section 28 of the A.P.Co-operative Societies Act, 1964, every member is entitled to nominate a person for the purpose of grant of membership in a Co-operative Society, and in view of the nomination of the 5th respondent herein by Late Smt.Shakuntala Bai, the Society has acted upon such representation and the same was also confirmed in the Generalbody meeting held on 13th January 1996. It is submitted that at no point of time, any objection was raised and the property was also transferred to the 5th respondent on 27.04.1999, by intimating to the Society, and the arbitration application is filed in the year 1999, without even impleading the transferee. It is submitted that the issue of succession rights claimed by the petitioner, is beyond the scope of the proceedings under A.P.Co-operative Societies Act, and with regard to such rights, it is for the petitioner to agitate before the appropriate civil Court. It is submitted by the learned counsel that the appellate Tribunal, by elaborately dealing with the issue, has rightly set aside the award of the Arbitrator. 8. Before dealing with the contentions raised by the learned counsel for the parties, it is appropriate to refer to the relevant provisions in the A.P.Co-operative Societies Act, 1964 and the Rules made thereunder, along with byelaw No.51 of the 3rd respondent-Society. Section 28 of the A.P.Co-operative Societies Act, 1964 reads as under : “Transfer of interest on death of a member :- (1) On the death of a member, the society shall transfer his share or interest to the person or persons nominated in accordance with the rule, or if no person has been so nominated, to such person as may appear to the committee to be the heir or legal representative of the deceased member only on such nominee, heir or legal representative, as the case may be, becoming a member of the society, subject to such conditions as may be prescribed: Provided that nothing in this sub-section shall prevent a minor or a person of unsound mind from acquiring by inheritance or otherwise the share or interest of a deceased member in a society. (2) Notwithstanding anything in sub-section (1), any such nominee, heir, or legal representative, as the case may be, may require the society to pay to him the value of the share or interest of the deceased member as ascertained in the manner prescribed. (3) A society shall pay all other moneys due to the deceased member from the society to such nominee, heir or legal representative, as the case may be, subject to such conditions as may be prescribed. (4) All transfers and payments made by a society in accordance with the provisions of this section shall be valid and effectual against any demand made upon the society by any other person”. Rule 16 of the A.P.Co-operative Societies Rules, 1964 read as under : “Nomination of heir :- (1) A member may nominate in Form-I any person or persons to whom, in the event of the death of the member, his share or interest in the profits or assets of the society be transferred, or the value thereof or any other moneys due to him from the society shall be paid. Such member may, from time to time, revoke or vary such nomination. (2) The number of persons so nominated shall not exceed the number of shares held by the member. (3) When a member nominates more than one person in respect of any shares held by him he shall, as far as practicable, specify the amount to be paid or transferred to each nominee in terms of a whole share. (4) A nomination made by a member or any variation or revocation thereof shall not be valid and shall not, in the event of the death of the member, have effect unless :- (a) it is made in writing and is signed by the member in the presence of atleast two witnesses ; and (b) it is entered in the books of the society kept for the purpose. (5)(a) The nomination made by a member or any variation or revocation of the said nomination, made under this rule shall be entered in the books of the society within fifteen days from the date of the receipt of the nomination papers. (b) The nomination or any variation or revocation thereof so made shall be recorded on the share certificate issued by the society”. Rule 17 of the A.P.Co-operative Societies Rules, 1964 reads as under : “Procedure to be adopted when no nomination is made: (1) If no nomination has been made by a member, the society shall, on the death of a member by a notice exhibited at the office of the society invite claims or objections for transfer of the share or interest of the deceased member to an heir to legal representative within the time specified in the notice. (2) After considering the objections or claims if any, received in this behalf and after making such inquiries the committee considers necessary, it shall decide as to the person who in its opinion is the heir or legal representative of the deceased member, and to proceed to transfer the share or interest of the deceased member to such person, only. (3) In case of payment of the value of the share or interest or other moneys due to the deceased member, the committee shall obtain sureties for the amounts involved in such payments from two members of the society.” Byelaw 51 of the 3rd respondent-Society reads as under : “On the death of a member his shares and houses shall be transferred to the nominee who shall be entitled to exercise the rights or membership, receive dividend on shares and to occupy the house or to let it on rent or transfer it in the same way as the deceased member. The society shall recognize the nominee only as the sole heir of the deceased member and any person claiming any share or interest in the shares or house of the deceased shall settle his claim with the nominee if necessary in a court of law and the society shall have no concern with the dispute. The society shall on an application received form the nominee within one month of the death of a member transfer the share or interest of the deceased member to any person specified in the application. Heirs of the deceased member other than the nominee or the person admitted to membership of the society on the application of the nominee shall be permitted to occupy the building owned by the deceased member on signing the agreement prescribed by the Society for being filled by the occupiers of shop building on Society’s land. In case a member dies without having a nominee, the Society may transfer share or interest of the deceased member to such person as may appear to the Committee to be the heir or legal representative on the production of a succession certificate”. 9. When the matter was taken up on 10th of March 2011, it was adjourned to enable the learned Standing counsel to produce the file relating to arbitration proceedings on the file of the 2nd respondent. Thereafter, on 17.03.2011, the file was produced and I have perused the same. In this case, it is to be noticed that the correctness of the nomination was never in dispute. It was never the case of the petitioner herein that there was no nomination made by Late Smt. Shakuntala Bai. The dispute was raised mainly on the ground that all the four sons including the petitioner, are entitled to equal shares by natural succession. The Arbitrator, instead of confining to the validity of transferring the membership in favour of respondent No.5, has proceeded further by holding that as Late Smt.Shakuntala Bai died leaving behind four sons, all the four sons are entitled to equal shares, and only on the ground that the petitioner is the eldest among the four sons, has ordered to transfer membership in his favour, with the approval of other brothers. The Arbitrator further held that if it is not possible, the petitioner be given 1/4th share. As rightly held by the Appellate Tribunal, it is to be noticed that the dispute before the Arbitrator was not with regard to succession. It is also to be noticed that the nomination made by Late Smt.Shakuntala Bai was not disputed before the Arbitrator. The only dispute raised was with regard to succession rights, alleging that the respondents have not followed the procedure prescribed under the Act. When there is a nomination in favour of respondent No.5 by Late Smt.Shakuntala Bai, and the same was communicated to the Society on 8th March 1995 i.e. much before her death on 24.04.1995, there was no option to the Society except to transfer the membership, based on such nomination. When there is a provision to nominate a member under Section 28 of the A.P.Co-operative Societies Act, 1964 and Rule 16 of the Rules made thereunder, it is always open for the Society to make a byelaw which is in conformity with the Rules. When the nomination by Late Smt.Shakuntala Bai is not in dispute, the question of issuing notice to the other members, would not arise. At no point of time, any of the brothers of the 5th respondent have approached the Society, disputing the nomination made by Late Smt.Shakuntala Bai, in which event, there was no necessity for the Society to conduct any inquiry by issuing notice to the other members, who are also sons of Late Smt.Shakuntala Bai. As the succession issue is beyond the scope of the Arbitration proceedings, I do not find any illegality in the order passed by the Appellate Tribunal in holding that the Arbitrator has no right or authority to enter into the arena of deciding the matter relating to succession. Though there was some delay in conducting the Generalbody meeting in which the nomination proposals were approved, in the absence of any dispute to the nomination as such, that by itself, cannot be said to be violation of procedure under Rule 16 of the Rules. In view of the valid reasons assigned by the Appellate Tribunal in reversing the award of the Arbitrator, I do not find any illegality, which warrants interference with the order of the Appellate Tribunal, in exercise of powers under Article 226 of the Constitution of India. 10. For the aforesaid reasons, the writ petition is devoid of merit and it is accordingly dismissed. No costs. ______________________ R. SUBHASH REDDY, J 25th March 2011 ajr