Sale deed by society and unilateral cancellation: bye-laws did not void the transfer, and title could not be cancelled unilaterally.

A co-operative society's bye-laws did not, by themselves, make a sale deed to a non-member void where the society was competent to contract and its authorised office-bearers executed the transfer in furtherance of its object to raise funds. The court also stated that once a registered sale deed transfers title, the vendor retains no interest in the property and cannot extinguish the purchaser's rights by a unilateral cancellation deed. Any cancellation of a void or voidable instrument must be sought before a competent court under the Specific Relief Act. The prior sale therefore stood, and the unilateral cancellation was ineffective against the purchaser and successor in title.

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Issues: (i) Whether the sale deed executed by the society in favour of a non-member, and the sale deed executed by the society through its office-bearers, were void or merely voidable. (ii) Whether the cancellation deed executed unilaterally by the society cancelling the earlier registered sale deed was valid in law.

Issue (i): Whether the sale deed executed by the society in favour of a non-member, and the sale deed executed by the society through its office-bearers, were void or merely voidable.

Analysis: The society was a corporate body competent to contract. The bye-laws governed internal administration and did not have the force of statute. There was no express prohibition against sale to non-members, and the resolution authorising the President, Secretary and Treasurer to execute sales to outsiders remained unchallenged. The court also held that a sale executed by authorised office-bearers in furtherance of the society's object to raise funds was not rendered void merely because it was contrary to the bye-laws or because the execution did not strictly conform to the internal signing requirement.

Conclusion: The sale deed in favour of the non-member was valid and binding and not void.

Issue (ii): Whether the cancellation deed executed unilaterally by the society cancelling the earlier registered sale deed was valid in law.

Analysis: After a registered sale deed is executed, title passes to the purchaser and the vendor loses all interest in the property. Such a completed transfer cannot be nullified by a unilateral deed of cancellation. Cancellation of a void or voidable instrument must be sought before a competent court under the Specific Relief Act, and registration of a cancellation deed cannot divest title already conveyed. The unilateral cancellation here was therefore without legal authority and ineffective against the purchaser and his successor in title.

Conclusion: The unilateral cancellation deed was invalid, void and not binding on the plaintiff.

Final Conclusion: The suit was rightly decreed, and the appeal failed because the prior sale stood and the unilateral cancellation could not displace the plaintiff's title or possession.

Ratio Decidendi: A co-operative society's bye-laws do not by themselves render a sale void, and once a registered sale deed transfers title, the vendor cannot unilaterally cancel it; any cancellation of a void or voidable instrument must be obtained through court.

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