In any cooperative society, the unfortunate event of a member’s passing can lead to a complex situation regarding the inheritance of their shares and interests in the capital or property of the society. The handling of such matters is governed by Model Bye–Laws of Cooperative Housing Society, and it is important to understand the procedures involved.
In this blog post, we will explore the procedures for managing the inheritance of shares and interests when there is only one heir/legal representative and when there are multiple heirs/legal representatives. We will also discuss the role of indemnity bonds in this process.
MANAGING INHERITANCE WITH A SINGLE HEIR/LEGAL REPRESENTATIVE:
When there is only one heir or legal representative of the deceased member, they have the right to demand payment for the value of the shares and interest. The society is obligated to acquire the necessary funds and make the payment according to the guidelines set out in bye-law No. 63. However, to safeguard the interests of the society, the society may require the submission of an indemnity bond, as stipulated in bye-law No. 34. This bond helps protect the society from any potential legal or financial issues that may arise.
MANAGING INHERITANCE WITH MULTIPLE HEIRS/LEGAL REPRESENTATIVES
In situations where there are more than one heir or legal representative, the procedure becomes a bit more intricate. All the heirs/legal representatives can collectively demand payment for the value of the shares and interest from the capital or property of the society. The society is responsible for acquiring the necessary amount and distributing it equally among the heirs/legal representatives, following the provisions of bye-law No. 66. Just like in the case of a single heir, an indemnity bond is still essential. However, in this scenario, the society will require an indemnity bond as per bye-law No. 35, and it must be submitted jointly by all the heirs/legal representatives.
The inheritance of shares and interests in a cooperative society upon the demise of a member involves specific procedures and compliance with society bye-laws. Whether there is a single heir/legal representative or multiple heirs/legal representatives, the society’s responsibility is to ensure the fair and secure distribution of the deceased member’s assets. Indemnity bonds play a crucial role in this process, helping to protect the society from any potential legal or financial complications. Understanding these procedures and following the prescribed guidelines of Model Bye–Laws of Cooperative Housing Society is essential to manage such situations efficiently and fairly in a cooperative society.