Quick Summary: A court in Mumbai decided that a flat connected to a debt case can't be left out from a list of properties to be sold. The flat was part of a legal fight involving Sanman Trade Impex Pvt Ltd and Baba Mungipa Steel Industry.
This case was heard in the Bombay High Court. Sanman Trade Impex Pvt Ltd, the company asking for money, held a court order against Baba Mungipa Steel Industry and others because they didn't pay their bills. The court case started with a Commercial Summary Suit filed back in 2015.
On March 9, 2020, a director of Baba Mungipa Steel gave the flat as a gift to his wife and son. The flat is located in Mulund West, Mumbai. This transfer happened after the court order but before the request to enforce the order was filed in September 2019.
Mr. D’Souza, speaking for the wife and son, argued that the flat shouldn't be sold because it was a gift and not part of the company’s debts. He mentioned that directors aren't personally responsible for company debts unless the court specifically says so.
Judge Abhay Ahuja decided against the wife and son. The court found that giving the flat as a gift was a trick to delay or avoid paying creditors. The judge pointed out that the property transfer was done knowing that the debt recovery process was ongoing.
The court noted that the timing of the gift was suspicious. It was done after the court order and during the debt recovery process, leading to the conclusion that it was meant to stop creditors from getting the flat.
The court denied the request to leave the flat out of the sale process. The Sheriff of Bombay was instructed to go ahead with the sale as per the Sale Notice dated July 15, 2025.
