Co-operative Society - The Legal Chamber

This Supreme Court judgment interprets the interplay between the priority of secured creditors under Section 26E of the SARFAESI Act and the statutory first charge for provident fund dues under Section 11(2) of the EPF & MP Act. The Supreme Court held that the statutory first charge for provident fund contributions overrides the priority granted to secured creditors, even under a non-obstante clause in a later enactment. Facts Of The Case: The appellant, Jalgaon District Central Co-operative Bank Ltd., is a secured creditor which had advanced loans to a co-operative sugar society, secured by a mortgage and hypothecation of the society's assets. The sugar factory became defunct, leading to loan defaults. The bank initiated recovery under the SARFAESI Act, took possession o...

The Supreme Court dismissed an appeal, affirming that a plaintiff cannot benefit from their own wrong. The Court held that an alienation of charged property, even if voidable, can only be challenged by the aggrieved society, not the member-loanee who committed the breach. Subsequent release of the charge validated the sale, and the reconveyance deed was deemed invalid due to lack of stamp paper, registration, and crucial terms. Facts Of The Case: The case originated from Special Civil Suit No. 49/1973, filed by the original plaintiff, Machhindranath, seeking possession and reconveyance of ancestral agricultural land, Survey No. 30, admeasuring 15 Acres and 17 Guntha, located in Village Kendal Bk., Taluka Rahuri, Ahmednagar, Maharashtra. The plaintiff had obtained a loan from Kendal Bk....

Tag: Co-operative Society

Land Sale Void If Society’s Charge Not Cleared: Supreme Court Explains Legal Consequence