In general paralances, the role of a nominee comes into the picture after the death of the official owner of a property. However, the same is often confused with the term "legal heir". Therefore, before understanding the rights of the Nominee, it is important to understand the basic difference between the Nominee and legal heir.
A nominee is a person who receives the property granted to him via nomination upon the death of the owner of the property. A legal heir means any person entitled to succeed the property of a deceased person intestate as per succession law. The purpose of appointing a nominee is to ensure that the property of the deceased owner is protected when the legal heirs or legal representatives of the deceased are indulged in transferring the property legally in their name such as obtaining probate of the will of the deceased or letters of administration of the estate of the deceased.
Further, it is to be noted that under nomination, the Nominee does not become the absolute owner of the deceased's property. The Nominee has the right to manage the property temporarily and, therefore, has no right to sell/transfer the property. Such right to sell/transfer the property vest with the legal heirs only as they are the absolute owners of the property, and the role of a nominee is to hold the property in the trust of the legal heir.
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Inheritance - The Mode of Acquisition of Property
Can a nominee sell a property? This is the most asked question from real estate lawyers, for a clear understanding, let's understand the various acquisition modes of a property. Property can be acquired in various modes under the purview of property laws in India, including the acquisition of property via agreement, possession, gift, and Inheritance.
Whereas, Inheritance has historically been the most common method of gaining property in India, and it is the transfer of property from one generation to another. Such an inheritance can be done while the property owner is alive, or it may be made after his or her death, where the property of the deceased person will immediately devolve to his or her heirs (testamentary or intestate).
Nomination does not give the ownership right to the Nominee and he has no right to transfer the same. Given that the right to transfer the property comes with the ownership right so, where there is no ownership right, there is no right to transfer.
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Leading Judgement in case of right of the Nominee
Supreme Court, in the case of Indrani Wahi v. Registrar of Cooperative Societies and Other adjudged that in case the owner of the property has no legal heir and the owner has nominated a nominee then in such case, a cooperative society is bound by a nomination made by a member to the extent that it has no option except to transfer the shares in the property in the name of the Nominee. However, suppose any legal heir or successor claims Inheritance on such property. In that case, such legal heir or successor will be the absolute owner of such property and the property will be ultimately transferred to such legal heir or successor. It is pertinent to note that the will is always superior to determine the actual status of the property after the member's death.
Therefore, from the above-given judgment, it can be inferred that the idea of appointment of the Nominee is to ensure that no one suffers due to delay on the part of legal heirs in establishing their rights of succession and claiming their property rights. In the given judgment, it is clear that nomination does not create a legal right of Inheritance and cannot override the laws of succession.
The nomination process is only necessary to ensure that the deceased's assets are protected and the deceased is represented before various organizations, i.e., banks/societies / other authorities.
On considering the above-given facts, it may be concluded that though the owner may nominate another persona as a nominee in respect of the property, the same does not grant absolute ownership of the property to the Nominee. Hence, the Nominee cannot transfer the ownership of the property in favor of the third person. After the death of the property owner, the absolute ownership of the property vests with his legal heirs, and the Nominee acts as an agent to the legal heir unless the legal heir fulfills all the formalities to get the property registered in their name. If you have any further questions or concerns regarding property ownership and the role of a nominee, it is advisable to consult with a property lawyer. They will have the expertise and knowledge to provide you with accurate legal advice and guidance.
Does the absolute ownership vest with the Nominee?
The rule of nomination is generally taken as they are not legally defined anywhere. However, on considering the general parlance and the various decided cases, it may be inferred that the absolute ownership does not vest with the Nominee.
Can a nominee act as an agent?
Yes, in case there are legal heirs to the property, the nominee act as an agent to them. As soon as the legal heir fulfills all the formalities in respect of the succession, the property is transferred from the Nominee to the legal heirs.
Does the Nominee have a lifetime right on the property of the deceased owner?
No, the Nominee does not have a lifetime right on the property of the deceased owner it is a temporary arrangement and continues to exist only till all the formalities in respect of succession are fulfilled, pursuant to which the property is transferred to the legal heir of the deceased owner.
Are Nominee and legal heir are same?
No nominee is the one who is vested with the property with the motive to protect the property solely. They can exercise temporary control and management right on the property. However, the legal heir is the one on whom ultimately the absolute ownership of the property is vested.
Does the same rule apply to all the nominations?
There is a different kinds of nominations in respect of shares and insurance property, etc as