No Party Can Take Advantage Of His Own Wrong: Supreme Court Upholds Dismissal Of Suit

The Court dismissed an Appeal, thereby upholding the Order of the Bombay High Court, which had dismissed the Appellants' Letters Patent Appeal.

The Bench of Justice Sudhanshu Dhulia and Justice Ahsanuddin Amanullah held, “However, we hasten to add that a deeper probe is required as to what extent the theory of the sale being void ab initio had to be applied has not been spelt out by the statute and, thus is required to be gone into depending upon the specific and relevant facts and circumstances of each case as also the ancillary background. Therefore, for the time being, the Court would move to the other issue and thereafter take a final view having regard to the overall picture which emerges, for the final disposal of the instant case.”

AOR Sandeep Sudhakar Deshmukh appeared for the Appellant, while AOR Sagar Pahune Patil represented the Respondent.

Brief Facts

A Regular Civil Suit was filed by the Respondents (original plaintiffs) before the Joint Civil Judge for specific performance and possession of the property based on an Agreement to Sell executed by the original defendants (predecessors-in-interest of the Appellants).

The Trial Court decreed the suit for specific performance and possession. Aggrieved by this, the original Defendants preferred an Appeal before the High Court. The Single Bench of the High dismissed the Appeal, affirming the Trial Court’s findings. This led the Appellants to file Letters Patent Appeal (LPA), which was also dismissed by the Division Bench of the High Court.

Court’s Reasoning

The Supreme Court pointed out that “there is no dispute with regard to the application of Section 48 of the Act which provides that when on any immovable property a charge has been created in favour of any society by any member by way of a declaration in pursuance of a loan, then there is an embargo on alienating such property during the subsistence of the charge.”

The Bench explained, “Alienation of any such property on which a charge is created in favour of the concerned cooperative society by way of declaration is totally beyond the capacity of the owner/member who has declared it as a charged property, until the amount, for which the charge was created along with the interest, is repaid in full. However, even if a part of the amount due is paid then a society may, on an application moved by the member, release from charge such part of the property, as it may deem proper having regard to the outstanding amount.”

The Court further explained that “the conduct of the member/person who has under a declaration created a charge upon property in lieu of any loan obtained from a society would be important. Section 48(e) of the Act declares void any transaction by a member-loanee against the society, where he/she alienates such immovable property on which a charge is created under declaration. Thus, the primal purpose is to safeguard the interest of the society which advanced the loan. As a corollary, the right to sue or get a declaration qua any alienation made by a loanee rests and is available only to the society in favour of whom the property under a declaration was charged. It would, therefore, not be within the domain of the memberloanee who himself commits a breach to take a stand that the act done by him should be declared void, without the society coming forward before an appropriate forum to set aside such alienation.”

“Undoubtedly, the present case comes under a unique category where a person on the one hand comes before a Court seeking that his own actions be nullified on the ground that it was void and on the 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 the wrong he committed be set aside and a relief be granted de hors the wrong committed, after condoning the same. In the present case, the plaintiff cannot be allowed to benefit from his own wrong and the Court will not be a party to a perpetuation of illegality,” the Bench held.

Consequently, the Court ordered, “In the light of the discussions made and reasons recorded hereinabove, we do not find any merit in the present appeal. Accordingly, the appeal stands dismissed.”

Accordingly, the Supreme Court dismissed the Appeal.

Cause Title: Machhindranath Deceased Through Lrs v. Ramchandra Gangadhar Dhamne & Ors. (Neutral Citation: 2025 INSC 795)

Appearance:

Appellant: AOR Sandeep Sudhakar Deshmukh; Advocate Nishant Sharma

Respondents: AOR Sagar Pahune Patil; Advocate D.K. Kulkarni

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