1. Case Details
- Case Name: Machhindranath S/o Kundlik Tarade (Deceased through LRs) vs. Ramchandra Gangadhar Dhamne & Ors.
- Case Number: Civil Appeal No. __ of 2025 (Arising out of Special Leave Petition (Civil) No. 7728 of 2020)
- Citation: 2025 INSC 795
- Court: Supreme Court of India
- Bench: Hon’ble Mr. Justice Ahsanuddin Amanullah, Hon’ble Mr. Justice Sudhanshu Dhulia
- Date of Judgment: June 02, 2025
2. Subject Matter
The case revolves around the interpretation of Section 48 of the Maharashtra Co-operative Societies Act, 1960, which prohibits the alienation of land on which a member has created a charge in favour of a co-operative society for a loan. The central question is whether a sale made in contravention of this statutory prohibition is void ab initio or merely voidable, and who has the legal standing to challenge such a sale.
3. Brief Facts
- The original plaintiff, Machhindranath, owned agricultural land. He took a loan from a Co-operative Society and, as required by law, created a charge on this land in the Society’s favour.
- While this charge was still active and the loan was unpaid, the plaintiff executed a registered sale deed for the land in favour of Defendant No. 1 (his nephew) on 02.11.1971.
- Subsequently, on 15.07.1972, Defendant No. 1 sold a portion of this land to Defendant No. 2.
- The plaintiff then filed a suit to declare the sale to Defendant No. 1 void, primarily on the ground that it violated the prohibition under Section 48 of the Act, and sought reconveyance of the property.
- After the suit was filed, the plaintiff repaid the loan, and the Society released its charge on the land.
4. Lower Courts’ Decisions (Trial Court & High Court)
- Trial Court: Initially decreed the suit in favour of the plaintiff, holding the sale to be void under Section 48.
- High Court (Single Judge & Division Bench): After several rounds of litigation, the High Court (first a Single Judge and then a Division Bench in a Letters Patent Appeal) set aside the Trial Court’s decree and dismissed the plaintiff’s suit. The High Court held that since the Society’s charge was eventually released, the sale could not be invalidated at the behest of the plaintiff who himself was the one who violated the statute.
5. Key Legal Principles Discussed by the Supreme Court
- Interpretation of “Void” under Section 48(e): The provision states that any alienation of charged property “shall be void.” The Supreme Court interpreted this not as void ab initio (an absolute nullity), but as voidable.
- Locus Standi to Challenge the Transaction: The prohibition in Section 48 is designed to protect the lending Co-operative Society. Therefore, the right to challenge a sale made in contravention of the charge lies exclusively with the Society, not with the member who made the prohibited sale.
- Maxim: Ex injuria sua nemo habere debet (No one can take advantage of his own wrong): The Court applied this fundamental legal principle to hold that the plaintiff, having knowingly and wrongfully sold the property in violation of the law, cannot be permitted to use that same illegality as a ground to reclaim the property. A court of law will not assist a person who bases his claim on his own wrongful act.
6. Supreme Court’s Reasoning
- The primary purpose of Section 48 is to secure the loan advanced by the Co-operative Society. It creates a statutory protection for the Society’s benefit.
- Since the Society never challenged the sale and its dues were ultimately cleared, its interests were not harmed.
- The plaintiff’s act of selling the property was a breach of a statutory obligation he owed to the Society. Allowing him to nullify his own sale would amount to letting him profit from his own wrong, which is against public policy and established legal maxims.
- The transaction was, therefore, not a nullity but was voidable only at the instance of the Society. As the Society did not act, the sale remains valid between the parties to the transaction (plaintiff and defendant no. 1) and subsequent purchasers (defendant no. 2).
7. Final Order
- The appeal is dismissed.
- The judgment of the High Court dismissing the plaintiff’s suit is upheld.