The Supreme Court held that a loanee cannot take advantage of their own breach to nullify a transaction. Only the aggrieved party could seek to set aside such a sale.
Machhindranath secured a loan from a co-operative society by putting his ancestral land as security. During the course of the loan, he signed a formal sale agreement in favour of his nephew for another loan, alongside a private agreement promising return of the land upon repayment. The nephew sold part of the land to a third party. Machhindranath filed a civil suit claiming that the sale was a security arrangement and argued that the sale deed would be void under the Maharashtra Co-operative Societies Act, 1960. The Trial Court ruled in his favour, but the High Court reversed it.
The Supreme Court dismissed the appeal. It held that the provision on the voidability of the sale agreement could be invoked only by the aggrieved party, the co-operative society. As Machhindranath had broken the terms himself, he could not claim that the sale was void.
Machhindranath v Ramchandra Gangadhar Dhamne
2 June 2025
Citations: 2025 INSC 795 | 2025 SCO.LR 6(2)[6]
Bench: Justices Sudhanshu Dhulia and Ahsanuddin Amanullah
Read the Judgement here.
Case Comment
Held, It is settled principle of law that a man cannot be permitted to take undue and unfair advantage of his own wrong to gain favourable interpretation of law. It is sound principle that he who prevents a thing from being done shall not avail himself of the non-performance he has occasioned. To put it differently, “a wrongdoer ought not to be permitted to make a profit out of his own wrong”.’
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Keywords/phrases: Bombay High Court—order upheld—Maharashtra Co-operative Societies Act, 1960—Section 48—defaulter may not declare sale void—society’s exclusive right to challenge—ex injuria sua nemo habere debet