Bombay High Court
Nikhil Wadke vs Freddy K. Bhadha And Ors. on 22 July, 2025
2025:BHC-AS:30473
IA 15705 & 15708 & 15742-2024 C2.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
INTERIM APPLICATION NO. 15705 OF 2024
WITH
FIRST APPEAL NO. 1954 OF 2024
Nikhil Wadke ...Applicant
Versus
Frenny F. Bhadha and Ors. ...Respondents
AND
INTERIM APPLICATION NO. 15708 OF 2024
WITH
FIRST APPEAL NO. 1955 OF 2024
SNEHA
NITIN Nikhil Wadke ...Applicant
CHAVAN
Versus
Digitally signed
by SNEHA
NITIN CHAVAN
Freddy K. Bhadha and Ors. ...Respondents
Date: 2025.07.22
20:18:47 +0530
AND
INTERIM APPLICATION NO. 15742 OF 2024
WITH
FIRST APPEAL NO. 1968 OF 2024
Nikhil Wadke ...Applicant
Versus
Sabina Khanna and Ors. ...Respondents
***
Mr. Anil D'Souza a/w Mr. Vinay Ansurkar, Ms. Raika Chaoudhari i/b Mr.
Kartik Vig for the Applicants.
Mr. Vishwajeet Kapse a/w Mr. Dhananjayan Kadam for Respondents.
***
CORAM : M.M. SATHAYE, J.
DATE : 22th JULY, 2025
P.C. :
1. These Interim Applications are filed by common
Applicant/Appellant in the above First Appeals. The applications are
IA 15705 & 15708 & 15742-2024 C2.doc
filed seeking stay to the impugned orders dated 24.09.2024 passed in
three Chamber Summons in 3 execution applications and also for stay
to warrant of attachment dated 07.02.2020. Respondent No.1 in three
appeals, are 3 Plaintiffs in 3 Summary Suits filed against common
Defendant. The necessary details are given below in tabular form.
Sr.No. Name of Original Summary Execution Chamber First Appeal
Plaintiff Suit No. Application Summons No.
No. No.
1 Freddy K. Bhadha 3027/2012 980/2013 450/2022 1955/2024
2 Frenny F. Bhadha 3028/2012 982/2023 451/2022 1954/2024
3 Sabina Khan 2857/2012 981/2013 452/2022 1968/2024
2. By the impugned Orders, the Chamber Summons taken out by
the Appellant for lifting of attachment of Flat No. 51 Sunville CHS Ltd.
Opp. Infant Jesus School, Off. Chincholi Bunder Road, Malad (W),
Mumbai - 400064, has been dismissed. This property is hereinafter
referred to as 'suit property' for short. The appeals and applications are
arising out of common set of facts inasmuch as 3 Plaintiffs had filed 3
summary suits against Defendant-Company, which came to be decreed.
In 3 Execution Applications for recovery of amount against the
Defendant-Company, the suit property came to be attached. By 3
Chamber Summons, the present Applicant has tried to lift the
attachment on the suit property, purchased by him.
3. Learned Counsel for the parties have filed compilation of
documents which are served upon each other and record was shown to
this Court from the said compilation.
IA 15705 & 15708 & 15742-2024 C2.doc
4. Few facts necessary for disposal of these applications are as
under. The suit property was purchased by one Mr. Hirji Kanji Patel on
10.06.2004. In September 2011, the said 3 Plaintiffs filed 3 summary
suits against common Defendant-Company (Allied Computers
International Asia Ltd.) seeking recovery of money on the basis of
cheques issued and certain documents including demand promisory
note executed by said Mr. Hirji Patel, who was owner of the suit
property. Suit summons in the summary suits were duly served upon
the said Hirji Patel on 17.04.2012 as a Director and authorised
signatory of Defendant-Company. Knowing fully well that suits are filed
for recovery of money against Defendant-Company, the said Hirji Patel
executed registered Gift Deed in respect in favour of his mother Smt.
Valbai Kanji Patel on 19.07.2012 gifting the same. In the meantime, on
09.02.2012, the Plaintiffs through their Advocate had informed the
society in which suit property is situated, recording their objections to
dealing with suit property along with 2 other flats owned by the said
Mr. Hirji Patel. In September 2012, the summary suits were transferred
to City Civil Court owing to change in pecuniary jurisdiction. By an
undated NOC issued under signature of only the Chairman of the
society, the suit property was permitted to be transferred.
5. On 03.07.2013, ex-parte money decrees came to be passed
against the Defendant-Company. The Plaintiffs filed 3 Execution
Applications and first attachment of the suit property took place on
28.04.2014. The said Smt. Valbai filed Chamber Summons No. 1896 of
2014 in Execution Application No. 982 of 2013 praying for lifting of
attachment. On 05.05.2014 the Respondent Decree holder brought the
attachment order of suit property to specific notice of the society by a
letter recording that attachment order is pasted on the property. The
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Applicant claims to have come in contact with Smt. Valbai sometime in
October-November 2014. The Applicant got a home-loan sanctioned
and on 05.01.2015, Smt. Valbai sold the suit property to the Applicant
under a registered Agreement for Sale (Sr. No. 166/2015). It appears
that by a certificate of same date- 05.01.2015, the society, once again
under sole signature of Chairman, gave no objection for selling of the
suit property. On 11.02.2015, surprisingly Valbai, despite selling the suit
property to the Applicant, again filed a Chamber Summons No. 310 of
2015 in Execution Application No. 980 of 2013 seeking lifting of
attachment, which came to be dismissed for default on 21.10.2016. In
September 2019, the earlier Chamber Summons filed by Smt. Valbai
(No. 1896 of 2014 for lifting attachment) got dismissed for default. In
January-February 2020, the suit property was again attached and
warrant of attachment was issued in respect of suit property and one
more property being Flat No. 52. The Applicant attended the office of
Economic Offence Wing ('EOW') Mumbai for recording statement in
respect of the FIR filed against the Defendant-Company. In September
2021, the City Civil Court issued warrant for sale. The Applicant filed
his objections before the Commissioner for taking accounts some time
in December 2021 and filed 3 Chamber Summons Nos. 1932, 1933 and
1934 of 2021. It appears that in February 2022, these 3 Chamber
Summons withdrawn and present 3 Chamber Summons (450, 451 and
452 of 2022) are filed challenging the warrant of sale and attachment.
Ultimately, by impugned orders dated 24.09.2024 all 3 Chamber
Summons have been dismissed. In these facts and circumstances, the
Applicant is before this Court in First Appeals.
6. Learned Counsel for the Applicant submitted that the suit
property is not the property of the Defendant-Company and therefore, it
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cannot be attached in Execution of decree against the company. He
submitted that on the date of filing of execution, Smt. Valbai was the
owner against whom there was no decree. He submitted that there is
already attachment existing about another flat at Andheri regarding
which the litigation is pending in this Court in which one Ms. Namita S.
Agarwal is directed to deposit 50% of the concerned amount and that
flat is sufficient to satisfy the decree in all 3 suits. Therefore, the present
warrant of attachment in respect of present suit property ought to be
recalled/lifted. He submitted that the issue as to whether the registered
Gift Deed executed by Mr. Hirji Patel in favour of his mother Smt. Valbai
prior to decree was valid or not, cannot be considered in the present
execution proceedings.
7. He further submitted that the Applicant was not aware about
pendency of execution application or attachment of property. That Smt.
Valbai represented that there was no encumbrance on the property and
the encumbrance of Bharat Co-operative Bank was cleared and after
release of suit property from Bharat Co-operative Bank, the Applicant
raised home-loan and purchased the suit property. He submitted that
during the entire process, neither Smt. Valbai, nor the society informed
the Applicant about purported attachment. He submitted that Smt.
Valbai Patel was not Judgment Debtor and therefore, the Execution
cannot proceed against the suit property and attachment must be lifted.
He submitted that under Order 21 Rule 54 of Civil Procedure Code,
1908 ('CPC' for short), only property of Judgment Debtor (Defendant-
Company) can be attached. He has relied on Section 60 and 64 of CPC
in support of his arguments. He further relied on Order XXI Rule 41(b)
of CPC to contend that authorised officer is to be examined for showing
the property of the Judgment Debtor company, which has not been
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done. He submitted that lifting of corporate veil has not been pleaded
and considered. Learned Counsel for the Applicant relied upon
Judgments of Belarmina Gowda v/s. Ranjith Nath [2019 SCC Online
Bom 588] and V.K. Uppal v/s M/s. Akshay International Pvt. Ltd. [2010
SCC Online Del 538], in support of his case.
8. Per contra, Mr. Kapse learned Counsel for the Respondents/
Plaintiffs/ Decree Holders submitted that the record clearly shows that
in order to defraud the Plaintiffs and to avoid payment of money Mr.
Hirji Patel who was the Director and authorised signatory of the
Defendant-Company, despite clear knowledge of pendency of suits, has
gifted the suit property to his mother. He submitted that despite their
objections to the Society, the concerned Co-operative Housing Society
has issued undated NOC and bona-fide certificate as well as no
objection to sell without concurrence of the Managing Committee of the
society and only at the instance of Chairman, which is sufficient to
indicate illegality in the transaction. It is submitted that in another
Chamber Summons by Ms. Namita S. Agarwal in respect of property at
Andheri, arising out of present suits, execution was taken out and that
property at Andheri was attached and similar attempt by said Ms.
Agarwal for lifting of attachment has been dismissed under Order dated
10.04.2023 in CHS/472/2021. He further submitted that Chamber
Summons of one more person Amitesh Chadda seeking stay of proposed
auction of another property Flat No. 52 arising out of present suits, the
attempt to stall recovery has been dismissed by order dated 25.03.2025
in CHS/1887/2024.
9. I have considered the submissions and perused the record with
the assistance of learned Counsel for the parties.
IA 15705 & 15708 & 15742-2024 C2.doc
10. At the outset, it is necessary to note that facts are not really
disputed. As noted earlier, admittedly the suit-summons were served on
Hirji Patel on 17.04.2012, who had received them as the Director and
authorised signatory of Defendant-Company. Admittedly, suits were for
recovery of money on the basis of issuance of cheques being negotiable
instruments and on the basis of demand promisory notes. Money
decrees passed in the suits are put to execution. Admittedly, during
pendency of the suits, the said Mr. Hirji Patel gifted present suit
property to his mother and therefore, the transaction is hit by principle
of lis pendence under Section 52 of the Transfer of Property Act,
especially when suit claim is also based on demand promisory notes of
said Mr. Hirji Patel. Case of the Decree holders that this is fraudulent
transfer is squarely covered under section 53 of the Transfer of Property
Act. The question as to whether the suit property can be considered as
property of Defendant-Company and whether gift deed in favor of Smt.
Valbai was a fraudulent transfer are the issues which are well within the
jurisdiction of the Executing Court under provisions of Order 21, Rule
58 (1), (2) & (3) of CPC.
11. It is material to note that both before and after sale of the suit
property in favour of the Applicant, Smt. Valbai tried to lift the
attachment over suit property, and the attempts were unsuccessful.
Before sale of suit property to the Applicant, Valbai in August 2014 had
filed a Chamber Summon. During pendency of this Chamber Summons,
suit property was sold in January 2015. Despite selling it, Smt. Valbai
again filed Chamber Summons in February 2015 for lifting of
attachment, it is not known under what authority. Both these Chamber
Summons have been dismissed for default in October 2016 and
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September 2019.
12. Whether the Applicant was aware of pendency of litigation is a
matter of appreciation of evidence, which will take place at the time of
final hearing of appeal. The Applicant claims to be a bona-fide
purchaser. But he has not shown any material to indicate that basic due
diligence in the form of issuance of title verification public notice has
been done. Mere fact that home-loan was sanctioned by a finance
company is not sufficient to hold at this stage that the Applicant was
duly diligent or a bona-fide purchaser of the suit property. It has also
come on record that Smt. Valbai in affidavit in support of chamber
summons, admitted that on 25.04.2014 by beat of drum, information
was given in the building about decree and attachment. It has come on
record that attachment order was pasted on the property, as recorded in
letter dated 05.05.2014. Order of attachment issued under Order XXI,
Rule 54(2) provides for pasting/affixing order copy in conspicuous part
of the property. It is settled law that it has implication of making the
actions known in rem. This has direct bearing on the Applicant's claim
of being bona-fide purchaser. Having entered into shoes of Smt. Valbai
under registered document of 05.01.2015, the fact that she had filed 2
Chamber Summons for the same relief, which were dismissed for
default, also has a bearing on the case of the Applicant. It is also seen
that Applicant was required to attend the office of EOW, Mumbai for
giving statement in respect of FIR lodged. This also indicates that either
Mr. Hirji Patel or the Defendant-Company was under investigation for
economic offences.
13. In view of above, at the present interim stage, sequence of
events clearly indicate that Mr. Hirji Patel has transferred the suit
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property to keep it away from monetary claims by the Respondents.
14. Viewed in the light of what is observed, if the impugned order
is perused, it is seen that the Trial Court has considered the case of the
Respondents/ Decree Holders that Mr. Hirji Patel was the Managing
Director of the Defendant-Company who had executed promisory note
and personal guarantee against loan advanced to the Defendant-
Company and had issued cheques in favour of the Decree-Holders and
said Mr. Hirji Patel was personally liable to pay the amount. The Trial
Court has also considered that said Mr. Hirji Patel had duped many
people such as present Decree-Holders and crime has been registered
against him and therefore, transfer of suit property to his mother is
apparently fraudulent. The Trial Court has considered that after other
Directors of the Defendant-Company resigned, it is the claim of the
Decree-Holders that Mr. Hirji Patel was sole in-charge of the company to
whom friendly loans were advanced and therefore, promisory notes
were executed by him. The Trial Court has also considered that mother
Smt. Valbai had also filed Chamber Summons which was dismissed.
The Trial Court has also considered the practical aspect of the matter
that a son of 54 of age has gifted property to old mother of 73 years and
it raises doubt on the real intention behind the transaction.
15. It is the matter of record that the arguments advanced before
this Court on behalf of the Applicant about the aspect of lifting of
corporate veil, procedure under Order XXI, 41(b) or based on section 60
& 64 of CPC, none of these seem to have not been advanced before
learned Trial Court. Whether said arguments can be advanced for the
first time in this Court is a matter of debate. Section 60 of the CPC
prima facie covers the suit property within its ambit considering what is
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provided in the section 60(1) of CPC which reads thus :
"60. Property liable to attachment and sale in execution of decree--
(1) The following property is liable to attachment and sale in execution of
a decree, namely, lands, houses or other buildings, goods, money, bank-
notes, cheques, bills of exchange, hundis, promissory notes,
Government securities, bonds or other securities for money, debts,
shares in a corporation and, save as hereinafter mentioned, all other
saleable property, movable or immovable, belonging to the judgment-
debtor, or over which, or the profits of which, he has a disposing power
which he may exercise for his own benefit, whether the same be held in
the name of the judgment-debtor or by another person in trust for him or
on his behalf: "
[emphasis supplied]
16. In the judgment of Belarmina Gowda (supra) relied upon by
the Applicant, learned Single Judge of this Court was considering
discharge of Judgment Debtor finally and the Petitioner therein was not
a director of the judgment debtor company. In the present case, said Mr.
Hirji Patel was director of the defendant company. In the judgment of
V.K.Uppal (supra), learned Single Judge of Delhi High Court has held
that for lifting of corporate veil, a case of fraudulent transfer has to be
made out. In the peculiar facts of this case, such case is clearly made out
as explained above. Therefore both the said judgments will not advance
the case of the Applicant.
17. In the aforesaid facts and circumstances and for the reasons
indicated above, there is no merit in the applications and the same are
rejected.
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18. At this stage, learned Counsel for the Applicant seeks
extension of interim protection granted on 18.12.2024 (clause 11
thereof). Learned Counsel for the Respondents opposes this request
contending that the tender referred in the said clause has failed and
there is no immediate threat of sale of subject matter flat. In fairness, it
is directed that if the execution proceedings are pressed and it reaches
the stage of issuance of tender for sale of subject matter flat, the tender
will not be opened for a period of only 4 weeks from today i.e. till
19.08.2025. Thereafter, the execution can proceed in accordance with
law.
19. All concerned to act on duly authenticated or digitally signed
copy of this order
(M.M. SATHAYE, J.)
