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SUPREME COURT OF INDIA
SUDHANSHU DHULIA, AHSANUDDIN AMANULLAH, JJ.
Machhindranath S/o Kundlik Tarade Deceased Through Lrs – Appellants
A1: Bhagirathibai
A2: Ashabai
A3: Bhaussaheb
A4: Meenabai
Versus
Ramchandra Gangadhar Dhamne & Ors. – Respondents
R1: Ramchandra Gangadhar Dhamne
R2: Ashok
R3: Chhaya Babasaheb Gadhe
R4: Nareshkumar Babasaheb Gadhe
R5: Balasaheb
Civil Appeal No. 7277 of 2025 [@ Special Leave Petition (Civil) No.7728 of 2020]
Decided On : 02-06-2025
(A) Cooperatives - Alienation of Property - Alienation of any such property on which a charge is created in favour of concerned cooperative society by way of declaration is totally beyond capacity of owner/member who has declared it as a charged property, until amount for which charge was created along with interest, is repaid in full - However, even if a part of amount due is paid then a society may, on an application moved by member, release from charge such part of property, as it may deem proper having regard to outstanding amount - In present case, charge on suit land as declared by plaintiff was prior to date of him executing Sale Deed in favour of defendant - Neither amount for which charge was created was repaid to Society either in full or in part nor any such application for part-release was either filed before or accepted by Society prior to said sale - Right to sue or get a declaration qua any alienation made by a loanee rests and is available only to society in favour of whom property under a declaration was charged - It would not be within domain of member-loanee who himself commits a breach to take a stand that act done by him should be declared void, without society coming forward before an appropriate forum to set aside such alienation - Law cannot and does not, reward a person for his/her own wrongs - With regard to a transaction, unless society comes forward to seek its nullification/setting aside, same would at best be a voidable action and not void ab initio. (Paras 20, 21, 24 and 25)
(B) Property Law - Reconveyance Deed - It cannot be believed that a valid reconveyance deed would not specify any time-period and also not provide for any escalation in the amount to be returned in lieu of reconveyance - Besides being iniquitous, such term could not have been incorporated, if at all there was a genuine reconveyance deed - Had it really been agreed between parties that suit land was to be reconveyed upon money being returned, money to be returned would be commensurate with escalation for the period for which it was not returned by providing for some increase, either quantified or by prescribing a rate of interest and most importantly an outward time-limit - These are conspicuous by their absence in Reconveyance Deed. (Para 29)
Facts of the case:
Present appeal impugns the Final Judgment and Order dated 15.01.2019 passed by High Court of Judicature at Bombay, Bench at Aurangabad, whereby appeal preferred by appellants was dismissed and Judgment and Order dated 17.09.1993 [1994 MhLJ 558] in First Appeal No.624/1992 passed by Single Judge of High Court was affirmed. Single Judge differed with Judgment and Order dated 27.03.1980 in Special Civil Suit No.49/1973 passed by Civil Judge, Senior Division, Ahmednagar and set aside decree of possession so granted by Trial Court.
Findings of Court:
Present case comes under a unique category where a person on one hand comes before a Court seeking that his own actions be nullified on the ground that it was void and on other hand wants relief in his favour, which is consequential to and traceable to his own wrong. It would not be proper for a Court of law to assist or aid such person who states that wrong he committed be set aside and a relief be granted de hors wrong committed, after condoning the same. In present case, plaintiff cannot be allowed to benefit from his own wrong and Court will not be a party to a perpetuation of illegality.
Result : Appeal dismissed.
Key Points: - The court held that alienation of land with a declared charge in favor of a co‑operative society is void unless the debt plus interest is repaid in full, or the society releases part of the property after payment (!) (!) (!) (!) . - A reconveyance deed or agreement must specify a time period and any escalation; lack of such terms renders reconveyance terms suspect and not a basis to validate prior transfers (!) (!) . - Even where a charge was released, retroactive validation of earlier sales is not automatic; the society must seek nullification/setting aside for void ab initio or voidable effects, and mere release does not automatically validate past transactions (!) (!) .
JUDGMENT
AHSANUDDIN AMANULLAH, J.
Leave granted.
2. The present appeal impugns the Final Judgment and Order dated 15.01.20191 [Cause Title corrected by the High Court vide Speaking to Minutes Order dated 11.09.2019] in Letters Patent Appeal (hereinafter abbreviated as ‘LPA’) No.33/1998 in First Appeal No.624/1992 (hereinafter referred to as the ‘Impugned Order’) passed by the High Court of Judicature at Bombay, Bench at Aurangabad (hereinafter referred to as the ‘High Court’), whereby the appeal preferred by the appellants was dismissed and Judgment and Order dated 17.09.1993 [1994 MhLJ 558] in First Appeal No.624/1992 passed by the learned Single Judge of the High Court was affirmed. The learned Single Judge differed with the Judgment and Order dated 27.03.1980 in Special Civil Suit No.49/1973 passed by the learned Civil Judge, Senior Division, Ahmednagar (hereinafter referred to as the ‘Trial Court’) and set aside the decree of possession so granted by the Trial Court.
PARTIES:
3. The appellants before us, along with respondent no.5, are the Legal Representatives (hereinafter abbreviated to ‘LRs’) of the original plaintiff. Respondent no.1 is the original defendant no.1 and respondents no.2 to 4 are the LRs of the original defendant no.2. Despite valid service of notice, no one has entered appearance on behalf of respondents no.1, 2, and 5. Though, when the matter was heard and judgment was reserved by this Court, learned counsel for respondents no.3 and 4 was not present, however, subsequently, in terms of the Order dated 17.12.2024, a note of written submissions has been filed on their behalf, which is taken on record.
FACTUAL MATRIX:
4. For the sake of convenience and clarity of facts, the parties shall be referred to as per their status/position in the suit. The suit property is agricultural land bearing Survey No.30 situated at Village Kendal Bk., Taluka Rahuri, Ahmednagar, Maharashtra admeasuring 15 Acres and 17 Guntha (hereinafter referred to as the ‘suit land’). The suit land was the ancestral property of the original plaintiff-Machhindranath. On 20.04.1956, the plaintiff enrolled as a member of the Kendal Bk. Vividh Karyakari Seva Sahakari Sanstha Limited (hereinafter referred to as the ‘Society’), which, admittedly, is a registered Co-operative Society in terms of the provisions of the Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as the ‘Act’). Thereafter, the plaintiff obtained a loan from the Society, which was to be repaid by 09.11.1971, and created a charge on the suit land in favour of the Society. A declaration to this effect was made by the plaintiff on 15.08.1969 and subsequently, Mutation Entry no.3346 came to be recorded on 09.09.1969 mentioning this declaration.
5. As things stood, the plaintiff found himself in a financial crunch and approached defendant no.1 for a loan of Rs.5,000/- (Rupees Five Thousand). Defendant no.1 was none other than the plaintiff’s nephew as also his son-in-law. Defendant no.1 extended such loan and as security, the plaintiff executed a Registered Sale Deed dated 02.11.1971 of the suit land in his favour. On the same day, a document styled as ‘Ram Ram Patra’ (hereinafter referred to as the ‘Reconveyance Deed’) was executed by defendant no.1 mentioning that the total value of suit land is around Rs.25,000/- (Rupees Twenty-Five Thousand) and that he would re-convey the suit land on repayment of Rs.5,000/- (Rupees Five Thousand). Mutation Entry no.3520 came to be recorded in the name of defendant no.1 qua the suit land on 24.12.1971.
6. On 15.07.1972, defendant no.1 executed a Registered Sale Deed in favour of defendant no.2 in respect of 10 Acres of the suit land for a consideration of Rs.30,000/- (Rupees Thirty Thousand). As a consequence of the said Sale Deed dated 15.07.1972, Survey No.30 came to be divided in two parts. The land sold to defendant no.2 was Survey No.30/1 and the remaining portion became Survey No.30/2. On knowledge of the Sale Deed executed b
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