Authority to Sell Immovable Property - The Society, particularly educational societies or trusts, can sell immovable property if authorized by their governing documents, resolutions, or bye-laws. For example, the Plaintiff Trust passed resolutions on 15.11.2024 and 02.05.2025, authorizing the sale and empowering representatives to act on their behalf Aditanar Educational Institution and another vs NIL - Madras. The Court has also recognized that under amended bye-law Rule 14(16), the Chairman is vested with powers to sell property, provided proper resolutions are passed Aditanar Educational Institution and another vs NIL - Madras.
Legal and Procedural Requirements - Societies must obtain prior sanction from their general body and the Registrar before disposing of immovable property, as stipulated under Rule 54(2). Exceptions exist for properties purchased at sale for recovery or by financing banks, where specific provisions permit sale without prior approval Kakkur Service Co-Operative Bank Ltd. VS Joint Registrar of Co-Operative Societies (General) - Kerala.
Restrictions and Conditions - Sale of property within disturbed areas requires prior permission from the Deputy Collector under the Disturbed Areas Act FEROZE FALIBHAI CONTRACTOR V/s STATE OF GUJARAT - Gujarat, Feroze Falibhai Contractor VS State Of Gujarat - Gujarat. Additionally, if the property is under a society’s ownership, transfer must align with bye-laws and legal procedures, including obtaining necessary NOCs and adhering to the society’s rules FEROZE FALIBHAI CONTRACTOR V/s STATE OF GUJARAT - Gujarat.
Ownership and Vesting of Society Property - Property belonging to a registered society is deemed to be vested in the governing body unless held in trust. Any transfer must be in the interest of the society, and courts may grant permission if the transfer benefits the society and its objectives B.M. Education and Social Institute vs State of U.P. - Allahabad.
Case-specific Insights - Several sources highlight that societies have historically transferred or intended to transfer properties for educational purposes, provided they follow legal procedures and obtain necessary approvals. For instance, a society passed resolutions to gift property or authorized sale to members, and courts have upheld such actions when procedural requirements are met Sourashtra High School Council VS Sourashtra Girls Vidya Sangam - Madras, Gurusamy VS Meenakshi Co-operative Building Society Ltd. - Madras.
Analysis and ConclusionYes, educational societies can sell their immovable properties if they follow the legal framework, including passing proper resolutions, obtaining necessary approvals from governing bodies, and adhering to statutory requirements like prior permission from authorities when applicable. The main points emphasize the importance of compliance with bye-laws, statutory rules, and obtaining approvals to ensure the legality of such transactions. Courts tend to support society’s right to sell property when all procedural safeguards are observed, and the sale is in the interest of the society and its objectives.
