As he was advanced in age and was unable to attend to various chores on his own he wrote a letter to the society in early 1995 and asked them to include the name of his elder son as his nominee. This letter was duly receipted by the society and the son was allowed to attend and vote at various annual general meetings and extra ordinary general meetings of the society held over the past three years and as a proof thereof he signed the minutes of the meetings and the attendance register and these records can indeed be verified.

However, the society, during the intervening period of threeyears neither issued any letter to the erstwhile member acknowledging his communication or denying the nomination. After my father's death, I being the eldest son wrote to the society and requested them to enroll me and my brother as joint members. This was on the basis of my father's last registered will and testament, a certified true copy of which was also forwarded to them along with no objection letter from my mother as a matter of abundant caution. This time the society replied to the communication stating that they could not accede to my father's request to transfer the membership in my and my brothers' name because at the time of joining the society in 1957 he had nominated my mother as his sole nominee.

Is this correct? Does the will not supersede any directions that he may have given in his life time? Is there a restriction on the number of nominees that a member may appoint under the Co-operative Society's Act?
-- M L Seth, Delhi

Rule 15 of the model bye-laws of aco-operative group housing society stipulates that each member may nominate a person or persons, to whom his shares shall be transferred. But no member may nominate more than one person unless the amount to be paid to such nominees, whether by way of whole shares or by fixed proportion of the amount available for transfer as the case may be specified when the nominee is appointed and he shall attest the nomination by putting his signature or thumb impression in the register of members as also provided under rule 32.

From your narration it is not clear whether your father in his life time had revoked the earlier nomination in your mother's name or whilst proposing you as a nominee had signed the members register after effecting the change. If this has not been done then in the first instance the society should be asked to recognise your mother as a member in succession and once this is done she could write to the society and nominate her two sons as nominees in equal share by signing the members' register.Thereafter, if desired and in order to give effect to your father's will she could resign from membership and stipulate that her two sons be inducted as members in equal share.

If the society refuses to transfer the share of the deceased member to his nominee or successor, the nominee can file an appeal to the registrar. The registrar may pass such appropriate orders which shall be binding on all concerned.

As you are aware the real estate markets throughout the country have been in the throes of a constantly deepening recession and as a consequence thereof the prevailing market rates are considerably lower than the area circle rates fixed by the respective state governments. Under the circumstances the purchasers are being forced to pay the stamp duties on a notional value which has no relationship to the cost of acquisition actually paid by the purchaser. The finance minister, whilst presenting the Finance Bill No. 2 in Parliament, had proposed some changes to sections 48 and 56 of the Income TaxAct by virtue of which the seller would be liable to pay capital gains tax on the deemed cost of sale and the purchaser could be forced to treat the difference between the deemed and the actual cost of acquisition as computed under the Wealth Tax Rules as income from other sources. As the implications of the proposed changes are indeed serious, could you suggest the modus operandi that should be adopted in future real estate transactions?

-- J C Jain
The Real Estate Development Council and non-government organisations like Common Cause should be requested to take up the issue with both the state and the central governments with a view to seeking downward revision of circle rates in line with the subsisting market prices every quarter.

Meanwhile, both the buyers and the sellers should ensure that the transactions entered into by them are truly reported so that the difference between the document registration value and the value determined as per prevailing circle rate is considerably reduced andseek registration of documents at the transaction rate.

If the registering authority in deference to the circle rates fixed by the district collector decides to impound the document post presentation for registration and refer the same for adjudication to the district collector of stamps who is an officer of the same district of either an SDM or ADM rank then let him do so.

In the event the district collector of stamps persists in demanding and collecting stamp duties at the circle rate you still have one more appeal available to you to the district collector and if you still fail then pay the additional stamp duty as demanded but under protest. You can still seek redressal of your grievance through the courts.

It needs to be appreciated that once the document has been presented for registration your title to the purchase is safe and the registrar has no authority to refuse to accept the same for registration. He can merely impound the document post presentation and refer it to the collector of stampsfor adjudication on grounds of under stamping an offense wherein you can be asked to deposit the differential stamp duty along with a fine.

It may also be mentioned that the Finance Act 1998 as enacted by Parliament on July 17, 1998, has not amended section 48 of the Income Tax Act as the proposal to do so was withdrawn by the finance minister prior to voting of the Finance Bill. As a result of this withdrawal the computation of capital gains tax would continue to be done on the basis of the actual transaction value and not the circle rate related deemed value as was proposed in the Finance Bill

G P Khungar is a real estate consultant and a former director (corporate affairs) of Ansals Ltd

(Readers are requested to send in their queries to the Associate Editor, The Financial Express, Fortune Towers, 2nd Floor, 198/2/1, Ramesh Market, Near Sapna Cinema, East of Kailash, New Delhi-110 065).