Sunita Ishwar Samota vs Sanman Trade Impex Pvt Ltd

38-IA-7784-2025.doc

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

INTERIM APPLICATION NO. 7784 OF 2025 IN COMMERCIAL EXECUTION APPLICATION NO. 30 OF 2023

SUNITA ISHWAR SAMOTA & ANR )...APPLICANTS IN THE MATTER BETWEEN SANMAN TRADE IMPEX PVT LTD )...CLAIMANT / DECREE HOLDER V/s. BABA MUNGIPA STEEL INDUSTRY AND ) OTHERS )...RESPONDENTS

Mr.Ryan D'Souza a/w Mr.Shivam Laturiya, Ms.Pranchali Kandre i/b APS Law Associates, Advocates for the Applicants. Mr.Vivek Kantawala a/w Mr.Amey Patil, Mr.Manav Kantawala i/b M/s. Vivek Kantawala and Co., Advocates for the Claimant/Decree Holder.

CORAM : ABHAY AHUJA, J.

RESERVED ON : 19th JANUARY 2026 PRONOUNCED ON : 30th JANUARY 2026

ORDER :

1. This Interim Application filed under Order XXI Rule 58 of the

Code of Civil Procedure, 1908 (the "CPC") by the wife and the son of

Judgment Debtor No.3 seeks to exclude Flat No.203, A-Wing, 2 nd Floor,

Silver Birch Cooperative Housing Society Ltd, Vasant Gardens, Swapna

Nagari, Mulund West, Mumbai 400080 (the "said flat") from the

schedule of properties in the Execution Application No.30 of 2023

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attached pursuant to a Warrant of Attachment dated 1 st February 2024

and to set aside the said Warrant of Attachment as well as the

Proclamation of Sale dated 15th July 2025 insofar as it concerns the

said flat.

2. Mr. D'Souza, learned Counsel appearing for the Applicants, has

submitted that earlier the Claimant/Decree holder had filed a

Commercial Summary Suit No.153 of 2015 against Baba Mungipa Steel

Industry Pvt. Ltd. and its directors and the Respondent No. 3 was one

of the two directors against whom the Suit was filed. The Commercial

Summary Suit culminated into a decree dated 30 th July 2018 pursuant

to order passed in Summons for Judgment No.39 of 2018 and the

present Execution Application filed on 19 th September 2019 seeks

execution of the said decree against the Respondents.

3. That, on 9th March 2020, out of love and affection the

Respondent/Defendant No.3 had executed registered Gift deed in

favour of his wife, the Applicant No.1 and his son the Applicant No.2

who became the joint owners of the said flat. It is submitted that in the

course of the execution proceedings a Warrant of Attachment dated 1 st

February 2024 attaching the said flat was issued, pursuant to which the

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said flat was attached, after which on 10 th March 2025, which is more

than a year after the attachment, a warrant of sale was issued and on

19th March 2025 the warrant of sale was lodged for issuance of

proclamation of sale and the proclamation of sale was issued in May

2025.

4. On 30th June 2025, when an objection was taken to the

proclamation of sale on the ground that there was a Gift deed in favour

of the Applicants, the Commissioner for taking Accounts observed that

the title could not be decided finally and only included the Applicants'

claim in the Proclamation of Sale list. The proclamation of sale was

settled formally on 15th July 2025 with a note about the Applicants'

claim. It is submitted that, thereafter, on 1 st October 2025, this

application under Order XXI Rule 58 of the CPC has been filed.

5. Mr. D'Souza has submitted that the Interim Application seeking

to exclude the said flat from the schedule of attached properties

deserves to be allowed on two grounds. Firstly Mr. D'Souza has

submitted that the claim in the Summary Suit was for payment of

invoices raised upon the Defendant No.1 company and although in the

demand notice as well as in the Suit the Defendant No.3 along with the

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Defendant No.2 were arrayed but only as directors and not personally

or as guarantors. Mr. D'Souza submitted that the property of a director

cannot be sold to satisfy a decree against the company as the company

is a separate legal entity, unless the directors are specifically held liable

by an order of the Court.

6. That in the present case the Respondent no.3/Defendant No. 3

was impleaded in his capacity only as a director and not in his personal

capacity. Mr. D'Souza has submitted that the decree has to be

interpreted and construed as has been passed against the company and

not against the personal assets of its Director. Mr. D'Souza has relied

upon the decision of the Orissa High Court in the case of Hrushikesh

Panda v. Indramani Swain and Another 1 submitting that the executing

Court has jurisdiction and powers under Section 47 of the CPC to

construe a decree in order to ascertain its precise meaning and that

general direction making the Defendants 'jointly and severally liable',

no doubt prima facie imposes a personal liability on all the Defendants

but the said words are not conclusive of the question and empower the

executing Court to construe the decree and in case of doubt, benefit

must be given to the Judgment Debtor in this regard. Mr.D'Souza has

1 AIR 1987 Ori 79

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submitted that, therefore, a director is not liable to pay the debts

incurred by the company although an action against the defaulting

director may be brought by the company itself or where the breach of

duty complained of is a breach fiduciary duty by a member suing in a

derivative action on behalf of himself and all other members of the

company, the directors liability for breach of fiduciary duty by

misfeasance proceedings in the companies winding up is well known.

7. Mr.D'Souza has submitted that the liability of directors even in

common law is only where they have been guilty of tort towards the

creditors as well as breach of duty owed to the company and would be

personally liable to persons who lent money to the company only if

they obtain the loan by fraudulent misrepresentations. Mr.D'Souza has

submitted that, therefore, it is obvious that the directors are generally

immune from the liability to the creditors of their company.

8. Mr.D'Souza has submitted that in the case before the Orissa High

Court it was held that no personal liability is attached to the director in

his individual capacity and the executing Court was therefore right in

holding that the personal properties of the director could not be

attached. Mr.D'Souza has submitted that, therefore, this Court may

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raise the attachment in respect of the said flat and set aside the warrant

of attachment as well as the proclamation of sale.

9. Secondly, Mr. D'Souza has submitted that the said flat was

purchased by the Defendant No.3 on 30th August 2005 and draws this

Court's attention to a copy of the Agreement for Sale at Exhibit A to the

application. Mr.D'Souza submits that, thereafter, by a Gift deed dated

9th March 2020 at Exhibit B to the application, the said flat was gifted

by the Defendant No.3 out of love and affection to the Applicants. It is

submitted that, therefore, the Applicants' are the lawful joint owners of

the said flat and the Defendant No.3 has no right, title or interest in the

said flat. That, the Applicants have been in possession of the said flat as

their home.

10. Relying upon the decision of the Hon'ble Supreme Court in the

case of Maya Devi v. Lalta Prasad2, Mr.D'Souza has submitted that

under Order XXI Rule 58 of the CPC conjointly read with Rules 97 to

104 of the CPC, it becomes clear that all questions raised by the

objector have to be comprehensively considered on their merits. That,

Order XXI of the CPC proscribes the filing of a separate Suit in the case

2 (2015) 5 SCC 588

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of a simple money decree as this one and prescribes that all relevant

questions shall be determined by the executing Court. That, objections

under Order XXI of the CPC should be meaningfully heard so as to

avoid the possibility of any miscarriage of justice. It is submitted that

the Decree Holder cannot execute the decree against properties

belonging to persons who are not Judgment Debtors. Mr.D'Souza has

submitted that, therefore also, the Interim Application be allowed.

11. On the other hand, Mr.Kantawala, learned Counsel appearing for

the Claimant/Decree Holder, has submitted that not only the

correspondence in respect of the unpaid invoices is with the Defendants

but also the demand notice was raised against the Company as well as

the other two Defendants. That, as can be seen from the decree dated

30th July, 2018 although the Defendants including the Defendant No.3

had entered appearance and the Summons for Judgment was served

upon them, they have failed to file reply and even no leave to defend

application had been filed. In paragraph 3 of the said order it is

recorded that the Defendants and their Advocates are absent and the

Single Judge has gone on to hold that, in the circumstances, it appears

that the Defendants despite having appointed their Advocate do not

appear to be interested in seeking leave to defend. Accordingly, based

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on the Compilation of Original Documents consisting of Original

purchase order of 2012, the invoices annexed to the Compilation of

documents indicated that diverse quantities of M.S. Scrap was supplied

at the rates for the price mentioned thereon and letter dated 7 th

September 2012 from the Defendants admitting of financial crisis and

seeking time to pay the amounts due signed by the Director, as well as

the Plaintiff's demand dated 11th April 2014, postal cover containing

the same appears to have been refused to receive by the Defendants,

and observing that the Defendants having failed and neglected to seek

leave to defend the Suit despite sufficient opportunities to do so,

holding that the Plaintiff is entitled to a judgment, the Court decreed

the Suit in terms of prayer clause (a) which reads thus:

"(a) For Judgment and decree against the Defendants and in favour of the Plaintiff for Rs.1,91,08,384.02 (Rupees One Crores Ninety One Lakhs Eight Thousand Three Hundred Eighty Four and Paise Two Only) as per the particulars of claim annexed at Exhibit - G to the Plaintiff and for future interest on Rs.1,17,75,782,20/- at the rate of 24% per annum or at such other and further rate as this Hon'ble Court may deem fit and proper from filing of the Suit till payment and or realization and for costs of the Suit."

12. It is submitted that the decree is against all the three Defendants

including the Defendant No.3. That, the Defendants No.2 and 3 are not

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only the directors but also the only shareholders of the Defendant No.1

company holding 25,000 equity shares each. That, each and every

correspondence has been signed by a director including the one dated

7th September 2012 admitting financial difficulty. That, the executing

Court cannot be go behind the decree and has to execute a decree as it

is, unless the decree is set aside or modified. That, neither any

application under Order IX Rule 13 of the CPC has been made nor any

appeal has been filed against the decree.

13. It has been submitted that, although it is settled law that a

company is a separate legal entity but in the facts of this case the

decree is against all the three Defendants including the Defendant

No.3, and that since the said two directors are also the shareholders,

this Court is empowered under Order XXI Rule 58 of the CPC to dismiss

the application and direct sale of the said flat for recovery of the

outstanding amount under the decree.

14. Mr. Kantawala has further submitted that even the Gift Deed

dated 9th March 2020 by the Defendant No.3 in favour of the

Applicants is a fraudulent transfer under Section 53 of the Transfer of

Property Act, 1882 and the same has been made with an intent to

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defeat or delay the creditors of the transferor and the same is voidable

at the option of the creditor so defeated. That, the Applicants are not

transferees in good faith or for consideration as there was no

consideration for such transfer and neither the Defendant No.3 nor the

Applicants have approached the cooperative housing society to record

the Gift Deed for transfer of shares and change of membership in its

records.

15. Mr.Kantawala has submitted that the Execution Application for

the decree dated 30th July 2018 was filed on 19th September 2019 and

it is only to defeat the Judgment Creditor's claim, that the Gift deed has

been entered into on 9th March 2020. The Defendant /Judgment Debtor

No.3 is the husband of Applicant No.1 and the father of Applicant No. 2

and was in full knowledge that he had suffered the decree, and that

there was an Execution Application which was pending not only against

the company but also against him, and therefore, only to defeat the

decree, this transfer in the form of a Gift deed has been effected. Mr.

Kantawala has submitted that, therefore, this Court may dismiss the

application.

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16. As regards the decision of the Orissa High Court in the case of

Hrushikesh Panda v. Indramani Swain and Another (supra), Mr.

Kantawala has submitted that, in that case, a joint written statement

had been filed by the Defendants denying the liability to the Plaintiff

and the personal liability of the Defendant No.2 was also denied and

their case was that the Plaintiff was overpaid by the company and thus

was to refund the excess amount paid to him. That, the Defendants

accordingly had instituted a separate money Suit against the Decree

Holder on that ground. Mr. Kantawala has submitted that it is in these

facts that the Orissa High Court observed that the general direction

making the Defendants jointly and severally liable are not conclusive of

the question and the executing Court is empowered to construe the

decree and in case of doubt benefit must be given to the judgment

debtor and held that no personal liability was attached to the director

in his individual capacity.

17. Mr. Kantawala has submitted that as regards the decision of the

Hon'ble Supreme Court in the case of Maya Devi v. Lalta Prasad (supra)

is concerned, the facts are again distinguishable in as much as the

original owner of the Suit property had executed a registered power of

attorney in favour of his wife and the other version of facts was that the

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original owner never had ownership of the Suit property at all and his

wife was the original owner vide registered general power of attorney

sale. That, in such a situation, objection was raised under Order XXI

Rule 58 of CPC against the attachment order in execution proceedings.

Mr. Kantawala has submitted that in fact in order to avoid the

possibility of any miscarriage of justice this Court should exercise its

powers under Order XXI Rule 58 of the CPC and decide on the

fraudulent nature of the Gift deed and set it aside in view of Section 53

of the Transfer of Property Act, 1882, and hold that the said transfer is

without consideration with intent to defraud the creditors including the

Judgment Creditor and voidable at the option of the Judgment Creditor

and sustain the attachment and direct sale of the said flat pursuant to

the proclamation of sale.

18. I have heard the learned Counsel for the parties extensively and

considered the rival contentions.

19. The facts not being in dispute this Court proceeds to consider the

two grounds as raised by the Applicants straightaway. There is no doubt

that the Judgment Debtor No.1 is private limited company and is a

separate legal entity distinct from its shareholders and directors. It is

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settled law that the liability of a company cannot be foisted on the

shareholders or directors although the company can take out

misfeasance proceedings against the directors in a winding up order for

fraudulent acts. The corporate veil can be pierced in the case of fraud

played on the company. Until any act of fraud or intent to defraud the

Company is established, the directors cannot be held liable for the

actions or liabilities of the company. That is the reason businesses are

conducted by incorporating companies to limit the liability of the

shareholders and also of the directors.

20. However, it is also true that in the facts of this case the decree

dated 30th July 2018 has been passed also against the two directors of

the Defendant No.1 company. None of the Defendants appeared when

the Summons for Judgment was listed for hearing and no reply was

filed on behalf of the Defendants nor any application for leave to

defend was filed although appearance was entered. Not only that, no

application under Order IX Rule 13 of the Code of Civil Procedure,

1908 ("CPC") for setting aside the decree or even an appeal for setting

aside the decree was filed by the Judgment Debtors. The present

application has only been filed by the wife and the son viz. the donees

under the Gift deed by the Judgment Debtor no.3. Therefore, on the

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basis of the Compilation of Original Documents tendered on behalf of

the Plaintiffs consisting of the Original Purchase order of 2012, Invoices

annexed to the compilation indicating diverse quantities of supply of

M.S. Scrap at the rate sent for the prices mentioned therein as well as

letter dated 7th September 2012 from the Defendant No.1 signed by one

of the directors admitting of financial crisis and seeking time to pay the

amounts due, as well as the demand notice dated 11 th April 2014 and

holding that the Defendants have failed and neglected to seek leave to

defend the Suit despite sufficient opportunities to do so, the Suit was

decreed in terms of prayer clause (a) quoted above. The learned Single

Judge after considering the various documents has passed the decree.

An Execution Court, it is well settled, cannot go behind a decree,

although it is trite that under Section 47 of the CPC it is the duty of an

executing Court to construe a decree and order to ascertain its precise

meaning and as there is no general rule for construing decrees, each

case must depend upon its own facts. The decision of the Orissa High

Court is, however, clearly distinguishable and would not assist the case

of the Applicant. In the said case, as rightly pointed out by

Mr.Kantawala, there was a joint written statement that had been filed

by the Defendants denying the liability to the Plaintiff and the personal

liability of the Defendant no.2 was also denied, and their case was that

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the Plaintiff was overpaid by the company and thus, was to refund the

excess amount paid to him. That, the Defendants, accordingly, had

instituted a separate money suit against the decree holder on that

ground. In the facts of the present case, as noted and which is not in

dispute, is that despite entering appearance, none of the Judgment

Debtors appeared when the summons for judgment was listed for

hearing and neither any reply nor any application for leave to defend

was filed. The learned Single Judge of this Court, after considering

various documents, including Purchase Order, Invoices, letter dated 7 th

September 2012 admitting liability, as signed by one of the directors and

holding that the Defendants having failed and neglected to seek leave to

defend the Suit, despite sufficient opportunities to do so, decreed the

Suit against the Defendants.

21. It is also pertinent to note that the Defendant No.3 is not the

Applicant herein. Although earlier on 3rd November 2025 Counsel had

appeared on behalf of the Defendant No.3, Judgment Debtor, who is

arrayed as Respondent No.3 herein, however during the hearing of this

matter, none had appeared for the husband Defendant No.3 nor any

reply has been filed. This ground ought to have been agitated by the

Defendant No.3 and not by the Applicants who are not even party to the

Suit or the execution proceedings.

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22. Neither any appeal has been filed against the judgment and

decree nor any application has been filed under Order IX Rule 13 of the

CPC. Therefore, in my view, it would, on this ground, not be possible

to interfere with the decree on the application made on behalf of the

wife and the son of the Judgment Debtor no. 3.

23. Further, the learned Counsel for the Execution Applicant has also

alleged fraudulent transfer under Section 53 of the Transfer of Property

Act, 1882, and submitted that the said issue would need to be

adjudicated by this Court under Order XXI Rule 58 of the CPC.

Mr.Kantawala for the Judgment Creditor has urged this Court to decide

on the issue of the fraudulent nature of the Gift deed exercising powers

under Order XXI Rule 58 of the CPC and if it is found by this Court that

the transfer is fraudulent, to dismiss this application and sustain the

attachment and direct sale of the said flat pursuant to the proclamation

of sale.

24. Therefore, the question as to whether it can be said that there

has been a fraudulent transfer by the Judgment Debtor No.3 to the

Applicants on 9th March 2020 whereby the said flat was transferred by

way of a Gift deed to the Applicants especially considering the fact that

the Execution Application for execution of the decree dated 30 th of July

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2018 has been filed on 19 th September 2019 of which the Defendant

No.3 who is the husband of the Applicant No. 1 and father of the

Applicant No. 2 had knowledge, would need to be determined.

25. However, before proceeding with the respective contentions on

this issue, it will be useful to consider the judicial exposition on Order

XXI Rule 58 of the CPC which deals with the procedure for adjudication

of claims or objections to the attachment of property and as to how a

decision should be arrived at when an application under Order XXI

Rule 58 comes up for adjudication. Order XXI Rule 58 of the CPC reads

as under:-

58. Adjudication of claims to or objections to attachment of, property.--

(1) Where any claim is preferred to, or any objection is made to the attachment of, any property attached in execution of a decree on the ground that such property is not liable to such attachment, the Court shall proceed to adjudicate upon the claim or objection in accordance with the provisions herein contained:

Provided that no such, claim or objection shall be entertained--

(a) where, before the claim is preferred or objection is made, the property attached has already been sold; or

(b) where the Court considers that the claim or objection was designedly or unnecessarily delayed.

(2) All questions (including questions relating to right, title or interest in the property attached) arising between the parties to a proceeding or

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their representatives under this rule and relevant to the adjudication of the claim or objection, shall be determined by the Court dealing with the claim or objection and not by a separate suit. (3) Upon the determination of the questions referred to in sub-rule (2), the Court shall, in accordance with such determination,--

(a) allow the claim or objection and release the property from attachment either wholly or to such extent as it thinks fit; or

(b) disallow the claim or objection; or

(c) continue the attachment subject to any mortgage, charge or other interest in favour of any person; or

(d) pass such order as in the circumstances of the case it deems fit. (4) Where any claim or objection has been adjudicated upon under this rule, order made thereon shall have the same force and be subject to the same conditions as to appeal or otherwise as if it were a decree. (5) Where a claim or an objection is preferred and the Court, under the proviso to sub-rule (1), refuses to entertain it, the party against whom such order is made may institute a suit to establish the right which he claims to the property in dispute; but, subject to the result of such-suit, if any, an order so refusing to entertain the claim or objection shall be conclusive.

26. The Division Bench of the Hon'ble High Court of Madras in the

case of Southern Steelmet and Alloys Ltd vs. B.M. Steel, Madras 3 has

held that under the amended Order XXI Rule 58, a full enquiry into all

allegations including questions relating to right, title or interest in the

3 1978 SCC OnLine Mad 28

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property attached which arise between the parties to the proceeding is

necessary and that the said provision mandates that the court enquiring

such a claim petition shall determine such questions. There is also an

embargo on the institution of a separate suit for the determination of

such questions. Sub-clause (4) of Order XXI, Rule 58 throws light upon

the nature and character of the decision ultimately to be arrived at by

the Civil Court on such adjudication under Order XXI Rule 58 of the

CPC. It was also held that after the claim or objection has been

adjudicated upon, the order made thereon shall have the same force

and be subject to the same conditions as to appeal or otherwise as if it

were a decree and though perforce an order is contemplated to be

passed under Order XXI Rule 58 of the CPC, that order has the legal

effect of a decree. Such an order is a substitute for a decision resulting

in a decree in an ordinary litigation, regarding the adjudication of

rights, privileges and duties of a party to a legal proceeding.

27. Section 53 of the Transfer of Property Act, 1882, refers to

fraudulent transfer and provides that every transfer of immovable

property made with intent to defeat or delay the creditors of the

transferor shall be voidable at the option of any creditor so defeated or

delayed.

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28. In the case of SBI Home Finance Ltd. vs. Credentials Finance

Ltd.4 a Division Bench of this court had the occasion to consider Order

XXI Rule 58 of the CPC in the context of Section 53 of the Transfer of

Property Act, 1882. It was observed that under Order XXI Rule 58 of

the CPC every claim or objection has to be adjudicated and no

substantive Suit can be brought for such adjudication. That, under the

present procedure for determination of claims to property attached in

execution, or even before attachment, when a claim or objection to

property or attachment is made, the Court has to finally adjudicate

such claim or objection. If upon such claim or objection being

preferred, the creditor raises the issue that such claim or objection has

no substance because the transfer to the claimant / objector is hit by

Section 53 of the Transfer of Property Act, 1882, then the said issue

also has to be adjudicated as it would involve adjudication of the title

or right to or interest in the property. That, the Court deciding the

claim would have to adjudicate all these issues and render a final

decision which would have the force of a decree subject to appeal. The

Division Bench has also considered the scope of Section 53 of the

Transfer of Property Act, 1882, by observing that Section 53 of the

4 AIR 2001 Bom 179

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Transfer of Property Act, 1882, enables the creditor to avoid the

transfer of immovable property which has been made with intent to

defraud, defeat or delay and such a transfer would be voidable at the

option of any creditor so defrauded, defeated or delayed.

29. In the case of Velchand Sawaji Marwadi vs. Sitaram Tukaram5

this Court has observed that transfer to a near relative under Section 53

of the Transfer of Property Act, 1882, is a hollow transaction but a

transfer nevertheless and Section 53 can be applied as it does not

prevent the Court from considering whether the conditions of Section

53 are satisfied.

30. From the aforesaid elucidation it emerges that under Order XXI

Rule 58 of the CPC the Executing Court is empowered to adjudicate

upon the claim in a comprehensive manner covering the questions

relating to right, title or interest over the property attached which are

to be dealt with just as a suit including the inquiry with regard to

fraudulent nature of the transaction, or the bonafides of the transferee.

31. The issue that would therefore need to be decided is whether or

not the Gift deed dated 9th March 2020 by the Judgment Debtor No.3 in 5 AIR 1925 BOM 287

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favour of the Applicant is a fraudulent transfer under Section 53 of the

Transfer of Property Act, 1882 with an intent to defeat or delay the

Judgment Creditor.

32. The decree is dated 30th July 2018 passed against the three

Defendants including the husband and father (Defendant / Respondent

no.3) of the Applicants. The letter dated 7 th September 2012 from the

Defendants admitting financial crisis seeking time to pay the amounts

due is signed by the director. The Plaintiff's demand letter dated 11 th

April 2014 is addressed to all the three Defendants / Respondents

including the Defendant / Respondent no.3. The Execution Application

for execution of the decree has been filed on 19 th September 2019

whereas the Gift Deed by virtue of which the Applicants are claiming

ownership of the said flat is dated 9 th March 2020. The Gift deed is a

hollow/related party transaction coming at a time after the execution

proceedings in relation to the decree in question, therefore, definitely

raises serious doubts about the bona fides of the said transaction.

Instead of taking steps to set aside the decree either by way of an

application under Order IX Rule 13 of the CPC or by way of an appeal

or by any other procedure known to law, the Defendant No.3 went

ahead and transferred the said flat by way of a Gift Deed to the

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Applicants after the execution proceedings. The Execution Applicant is

the Judgment Creditor of the Defendants including the Defendant

no.3 / Respondent no.3 and the effect of this transfer is to prevent the

said flat from being reached by the creditors including the Judgment

Creditor. In view of the Gift Deed as it stands, the property would not

be available to the creditors including the Judgment Creditor and the

effect of the transfer would be to defeat or delay the creditors including

the Judgment Creditor. The transaction lacks bonafide. I am, therefore,

of the view that there has been a fraudulent transfer by the Judgment

Debtor no.3 to the Applicants on 9 th March 2020 whereby the said flat

was transferred by way of a Gift Deed to the Applicants and the

Judgment Creditor viz. the Execution Applicant is entitled to avoid such

a transfer under Section 53 of the Transfer of Property Act, 1882, to be

treated as property of the Judgment Debtor no.3 / Respondent no.3

and to continue the attachment until the sale of the said flat.

33. The elucidation on the procedure for adjudication of claims or

objections to the attachment of property under Order XXI Rule 58 of

the CPC as above, only makes it clear that the investigation under

Order XXI Rule 58 of the CPC should be full, realistic and after giving

adequate opportunities to the parties concerned to prove their

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respective claims, right, title and interest in the property attached. In

the case at hand, it is an admitted position that the Defendant no.3 was

the owner of the said flat and that the Applicants have in paragraph 1

of the application clearly submitted that they have derived their title to

the said flat under a registered Gift Deed dated 9th March 2020

executed in their favour by the Defendant no.3. Therefore, in my view,

there is no necessity for this Court to direct the parties to go for trial.

The words used in Order XXI Rule 58 of the CPC are very clear that the

adjudication should take place and it also shows that the discretion is

vested with the Court to decide in what manner the adjudication

should take place. In case the Court is satisfied, which this Court is on

the basis of material before this Court, with the available documents

that have been put forth before the Court, directing the parties to go in

for a trial would be redundant.

34. It is an admitted position that the Defendant No.3 has executed

the Gift Deed after passing of the decree and during the pendency of

the execution proceedings. Unless the Defendant No.3 establishes that

the transfer was in good faith and not to defeat the execution, in my

view the attachment of the said flat cannot be excluded or raised. No

material has been placed before this Court that the Gift Deed is not to

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defeat the execution of the decree. In fact, the material is contrary to

such a finding. It is clear in the facts of this case that the Gift Deed has

been entered into being aware of and during the pendency of the

execution proceedings that have been filed by the Execution Applicant

against the three Judgment Debtors for which no further evidence

would be required. In view thereof, there is nothing further required to

be established by permitting evidence to be led. The timing and nature

of the transaction as borne out from the record indicate that same has

been effected with a view to defeat and delay the claim of the creditors.

When it is patently demonstrated that in the Gift Deed relied upon by

the Applicants that the transfer is made between the family members is

only to defeat and delay the claim of the Judgment creditor, no further

enquiry is necessary.

35. In view of the above, the case of Maya Devi v. Lalta Prasad

(supra) relied upon by the learned Counsel for the Applicants, does not

therefore further the case of the Applicants and in any event the said

case is distinguishable on facts.

36. In fact, in my view, in order to avoid miscarriage of justice to the

Execution Applicant and in exercise of powers under Order XXI of the

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CPC, this Court having decided that the Gift Deed dated 9 th March 2020

from the Judgment Debtor no.3 / Respondent no.3 / Defendant no.3 to

the Applicants is a fraudulent transfer under Section 53 of the Transfer

of Property Act, 1882, with intent to defraud the creditors including the

Judgment Creditor, the same is voidable at the option of the Judgment

Creditor. I am, therefore, inclined to dismiss this application and

sustain the attachment and direct sale of the flat pursuant to the

proclamation of sale.

37. Ergo, the Interim Application seeking exclusion of the said flat

for attachment deserves to be rejected. The Interim Application is,

accordingly, dismissed.

38. The execution to proceed as per law and the Sheriff of Bombay to

take steps in furtherance of the Proclamation of Sale dated 15 th July

2025.

(ABHAY AHUJA, J.) ARTI VILAS KHATATE

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