Gajula Ravinder v. 1. Srinidhi chits (HYD) private Ltd

Counsel for the Peiitioner:SR]. GUDt MADHUsUDHAN REDDY Counsel for the Respondents: The Court made the following: ORDER I { HOI{'BLE SRIJUSTTCE IC LAKSHMAN CIVII-'PJ VISION PETT TTON No.806 0F 2025 ORAL ORT'ER Heard l'4' (iudi Madhusudhan Reddy' leamed counsel frrr the petitioner. De:illLte service of notice, there is no representatirrn on behalf of resJ,orttlent No' 1. As per cause-title' it is ment ione d that respondent )rlos.2 lo 4 are not necessary parties to the present CtriP'

2. Ttris rr:.,,ision is filed under Section - 227 of the Constl.tution of India challcnlling the order dated22'll'2024 passed in E'P' l'lo'303 of2024in.6,'bitrationCaseARBNo'62lof202lby1heIII Additional lunLo' Civil Judge at Karimnagar'

3. On ttr,: application hled by respondent No 'l vide Arbitation Case ARB l.,ic.62t of 2021, the Chit Arbitrafor/Depuff Registrar of Chits, War;1ngal had passed an award dated 29'04'2024 direct ing the petitioner rrert:itt and respondent Nos 2 to 4 to pa) an amrtunt of Rs.2.18,95')/' alcng wlth interest @ l8% per annum on the principal amounr of R;. I . 3 1.644l- from the date of fiting the dispute till the date of realizatio'.r . ointly and severally' They shall also pa'r' Rs 4'8304 towards cc'st s o1' t.he arb itration proceedings' F-:- \, 2 KL,J CRP No 806 of2025 i.i 'i

4. Pursuant to the said award, respondent No.l herein had filed an execution petition vide E.p. No.303 of 2024 n ARB No.62l of 2021 seeking execution of the said award against the petitioner hereln and respondent No.3 for recovery of Rs.3,37,277 /_ ftom them. Vide the aforesaid ordeq leamed III Additional Junior civil Judge directed the Disbursing Officer of the petitioner and respondent No.3, to withhold the amount of Rs.3,37,277/- each from the monthly salary of the petitioner and respondent No.3 herein. They are judgment debtor Nos.2 and 3 in the said E.p. Respondent No.2 herein is the chit subscriber, while the petitioner herein and reryondent Nos.3 and 4 are the guarantors for the subject chit.

5. It is contended by leamed counsel for the petitioner herein that the Executing Court did not order for proportionate deduction from judgment debtor Nos.2 and 3. Before passing the order, the Exe.cuting Court neither issued noticg nor provided opportmity of hearing.

6. [t is also relevant to note that, it appears that leamed Executing Court issued similar order directing the Disbursing Officer ofjudgment debtor No.l to withhold the said amountof Rs.3 ,37,277/_ from his salaries as per Section - 60 ofcpc after deductins standard ' :!. ..:.. / n 3 XT,J cRP No 8{'5 0f2025 deduction plu:, cr.e' thousand and 2l3d of remaining gross salary and shall remit balar-rce 1/3'd of salary every month from the date' of r oceipt of the warrant

7. Th.u:;, ll:() Executing Court directed the Disbursing Oflicer of judgment debt,rr No.2 and 3 to deduct and recover the afr:resaid amount frorn th,: salaries ofjudgment debtor Nos'2 and 3 each' If the Disbursing (){Ii(x)r withholds the said amount and remits to the account of lho albresaid E.P', it amounts to recovery of more than the awarded amc'urrt. Thus, the same is in violation of the procedrrre laid down under Oontract Act, the Chit Fund AcL 1982 and also the principle laid (iown by this Court. The said aspecls wr':re not considered try the Executing Court while issuing impugned salary attachmenl ord': ::; It rs -olevant to extract Order - XXI, Rules - 11 (2)' 48 and 8 48A of the CrF'(l and the same are as under: "XIKI It'rte l l (2) of CPc-Written application- Sarre as other,vrs,e provided by sub-rule(l )' every application ftrr thr: ex(ctrtic r ,lf a decree shall be in writing' signed and verified b;' the apF'lit:ant or by some other person proved to the satisf,rctiorL of '-ht:(loun to be acquainted with the facts of the cav:' an<l shall conteil itt a tabular form the follou'ing particulars' namely 4 KL,J , CRPNo.8O6of2o25 \ '..i 1 (a) the number ofthe suit; (b) the names of the parties; (c) the date of the decree; (d) whether any appeal has been preferred from the decree; l?.y-h*h:l any, and (if any).what, paymenr or other adiushnenr :J,ffi IXT|J,T ;:IHT' t'us r#''are u***, iiirLr"' (f) whether any. and (if anv) whal previous applications have been made for the exLcuriin of tfre'aecree, tt-arl, "i *.n applications and their results; (g) the amount with interest (if any) due upon the decree. or other relief granted therebv.. rogether with ;;;;;;;y *oss{ecree. whether passl Gr"* ". "tJ-rr,Jli" l,r,*" decree sought to be executed; (h) the amount ofthe costs (ifany) awarded; Il)^,I-fr" of rhe person againsr whom execution of the decrec rs sought; and fi) the mode in whigtr thg s5. whether_ srstance of the Court is required Iil, ll lI d.etivery ofany propeny specificaily decreed: (u, oy rhe attachment. or by the attachment and sale, orlv th. ver!, vt u/ ur wirhour attachmenl orrny p.op".tyl's ,..-.sale. (rl)by the arrest and detenlion in irison ofany person; (iv)by rhe appoinrmenr ofa receiver; (v) otherwise, as the nature of the reiiefgranted may require.,, *Order X)O Rule 4g of CpC_Attachment of salarlr or allowaaces of servant of the Government or raitway company or local authority.- (l) Where the property to be attached is the salary or allowances of a servant of the Govemment or ol a servant of a railway company or local in any trade or industry which is estabrished by a central, provinciar or State or of a servant of a corporation engag€d *au,thority E+.G,Y . /t,/ )/ r, 5 KL,] CRP No :05 ot2025 Act, or a f(,vemment company as defined in section 617 o1-the Compernit:: Act, 1956 (1 of 1956)l the CouG whether the judgmr:nt<lebtor or the disbursing officer is or is not within the locar rirnirs of the Court's jurisdiction, may order that the amount ;hall, subject to the provisions of section 60' be withhe tci flm such salary or allowances either in one paynent or b1' rrorrthly instalments as the Court may direct; and rrpon notir cf the order to such oflicer as the appropriate Governrnent may by notification in the Official Gazetse appoint in ttLis beha tf,- (a) wtrer,: such salary or allowances are to be disbursed u ithirr the local timits to which this Code for the time be ing er(tends, the officer or other person whose duty it is to distrursr: the same shall wlthhold and remit to the Court:he arnourrt due under the order, or the monthly instalments, as the cirxi may be; (b) vrtr,:r'e such salary or allowances are to be disbursed be,'ond 1.he said timits, the o{T-rcer or other person within those limits whose duty it is to inslruct the disbursing authori l regarding the amount of the salary or allrrvances t,r he tlisbursed shall remit to the Court the amount 'lue Lmder th,: order, or the monthly instalments, as the case r']a) te, entt shall direct the disbursing authorify to reduce the aggrilg.rte of the amounts from time to time, to be disbursed by th(: ag$egate of the amounts from time to time remiftcd .16.rhs (lrturt. (2) S./here the attachable proportion ofsuch salary or allou'ance; is ;llrezul u being withheld and remifted to a Court in pursuancr: of a pr,:'rious and unsatisfied order of aftachment. the officer \a \ \ 6 Kl-J CRP No.Eo6 of2o25 \i 1 appointed by the appropriate Goverrunent in this behalf shall fo(hwith retum the subsequent order to the Court issuing it with a full statement of att the particulars of the existing attachment. (3) Every order made under this rule, unless it is retumed in accordance with the provisions of sub_rule (2) shall without further notice or other pr@ess, bind the appropriate Gov€rnment or the railway company or local authority or corporation of Govemm€nt company, as the case may be, while the judgment_ debtor is within the local timits to which this Code for the time being extends and while he is beyond those limits, if he is in receipt of any salary or allowances payable out of the Consolidated Fund of India or the Consolidated Fund of the State or the funds of a railway company or tocal authority or corporation or Govemment company in India; and the appropriate Govemment or the railway company or local authority or corporation or Covemment company, as the case may be, shall be liable for any sum paid in contravention of this rule. Explanation.-ln this means,- ru le, "appropriate Govemrnent,' (i) As respects any person in the service of the Central Governmenq or any servant of a railway administration or of a cantonment authority or of the po{t authority ofa major por! or any seryant of a corporation engaged in any trade or industry which is established by a Central Act, or any servant of a Govemment company in which any part of the share capital is held by the Central Govemment or by more than one State Covemments or panly by the Central Govemment and partly by one or more Stat€ Govemments, the Cenral Govemment; I ,i .f. L, i\ 7 KL,,I CRP No 80( of2025 (ii) A:; "esp;r:ts any other servant of the Govemment' or a servant of ar ) other local or other authority' or any servant ()' a corporation r:ngaged in any trade or industry which is establishert t1 a Provincial or State act, or a servant ofany other Government c'ompany, the State Government'" 'Ordr:r , X.XI, Rule - 48A. Attachment of salary or allowanccs of private employees.- (l) Where the property to be attached is rhe salary or allowances of an employee other than an employee to whom rule 48 applies, the Cour! where the disbursing t,fficer of the employee is within the local limits ol' the C,rurt's jurisdictiorq may order than the amount shall' subjcct to the pro'zision of section 60, be withheld from such salarl or allowancer; either in one payment or by monthly instalment: as the ()olrrt rnay direc[ and upon notice of the order to such disbursrng oflicer, such disbursing officer shall remit to the court th,J amount due under the order, or the monlhl)' instalmenls, as the case maY be. (2) $/here rhe attachable portion of such salary or allorvancts is alrea,Cy bt:ing withheld or remitted to the Court in pursuanc: ol- a provior:s and unsatisFred order of attachment' the drsbur;inq officer sha.l forthwith retum the subsequent order to the C-curt issuing rt u'ith a full statement of alt the particulars ol the existing attachment' (3) llv,:r1 order made under this rule, unless it is retumcd in accordarx:t, with the provisions of sub-rule (2), shall' witnout further nc.ice or other process, hind the employer lr'hile the judgm:r(-rft:btors, is within the tocal timits to which rhis (lode for the ti:re being extends and while he is beyond thcse-lirmits' if hr: is 'r receipt of salary or allowances payable out ol-the ! .l 8 KLJ cRP No 806 0f2025 firnds of an employer in any part of tndi4 and the employer shall be liable for any sum paid in contravention ofthis ruIe.,, 9 It is relevant to extract Section - 7l of the Chit Fund Act, 1982 and the same is as under: "71. Money how recovered.-Every order passed by the Registrar or the nom inee under section 6g or section 69 and every order passed by the State Crovemment in appeal under section 70 for payment oFany money shall, ifnot carried ou!_ (a) on a certificate issued by the Regisrar, be deemed to be a decree of a Civil CouG and shall be executed in the same marmer as a decree of such Court, or (b) be executed in accordance with the provisions of any law for time being in force for the recovery of amounts as anears of th€ land revenue: Provided that no application lor execution under clause (b) shall be made afrer the expiry ol three yean from the dale lxed in the order, and if no such date is fixed, from the date of the order."

10. It is also relevant to extract Sections _ 126, l2g and 146 of the Indian Conhact Act, 1872 and the same is as under: "126. sContract of guarantee., ..suret5r", .principal debtor', and "creditor',.-A "contract of guarantee" is a contract to perform the promise, or discharge the liability, ofa third person in case of his default. The person who gives the guarantee is called the "surety"; the person in respect of whose default the guarantee is given is called the ..principal debror',, and the 9 Kt-, CRI'No 806 ol:1025 person to uh')nl lhe guaranteo is given is called the "creditor" A guarantei) rtla:/ be either oral or wriBen'" "12E. Suretl' I liability'-The liability of the surety is co- extensiv3.viththatoftheprincipaldebtor,unlessitisothenvise Providert t'Y the contract'" ..146.Co.surtltiesliabletocontributeequally.-Wheretwoor more porsons are co-sureties for the same debt or duty' either jointly or 'sor erall!' and whether under the same or different contracts' an<[ whether with or without the knowledge of each other, thr: cc - tureties' in the absence of any contract to ttre contrary, aro liable' as between themselves' to pay each an equal sharelfthe.vholedeb!orofthatpartofitwhichremains unPaid bY tlrr: PrinciPal debtor'" [1. T]rus th': liability of the cc'surety is co-extensive uitlr that of principat d'obtol unless it is otherwise provided b1 the cor'tract' The said prtn;i;tle was also laid down by a Division Bench 'rf the High Court c'f J rdicature for the States of Telangana and y''ndhra Pradesh at 'il';cl:r'abad in Punyamurthula Venkata Visrva Sundara Rao v. M/s, Ma'r'gadarsi Chit Fund hrt' Ltd't' t J t2. The aforesaid relevant provlslons would rev(ral that tbr realization t'f ttLe amount covered under the arbitration award' respondenr lr.icr. r _ decree holder has to file an application ,nde r order 2017 (l) At l 12rIr'l) )-@a;- l0 KI-J CRP No 806 of2025 - )Oil Rule I I (2) of CPC. Accordingly, respondenr No.l had filed the aforesaid execution petition vide E.p.No. I 76 of 201 g.

13. In Punyamurthula Venkata Viswa Sundara Raor, the Division Bench of this Court on consideration of the arguments advanced by the parties, frarned the following rwo (02) points for I consideration: i. whether the decree holder has to proceed against all the judgment debtors, who are guarantors, by claiming proportio nate amount decreed. ii. whether the execution Courts in which E.ps. were filed against the present judgment debtors, who are revision petitions herein, have jurisdiction to entertain the execution petitions.

14. On consideration of the provisions of the Chir Fund Act and the CPC, the Division Bench held that the course thar has to be followed by the decree holder is to make an application to the Registrar for execution, to be forwarded to the proper authority at the option of the decree holder and the Registrar shalt himself issue the certificate and forward the said apptication to the Court or revenue authority, as chosen by the decree holder. The decree holder has an option to proceed against either the principal debtor or any of the guarantors or against all of them. Referring to Section - l2E of the !ry / 11 (L,J CRP i{o 806 f2025 Indian Contracl rn)t, the Division Bench held that the liabiliti' of a surety is co-r:xtett:;ive with that of the principal debtor unless it is otherwise provided lly the contract'

15.lnlV{arlamanchiAnillKumarv.MargadarshiChit}:und PvL Limitectr.2 I)ivision Bench of the High Court of Andhra Pr::'desh at Hyderabact tont idering the said principle laid down bv thi: Division Bench in PunYamtrrthula Venkata Viswa Sundara Raor' hel':l that liabitity of the srueties is joint and several' The Division Bench also negatived the c:c'ntention raised by the petitioner therein that a Recovery C'3rl.if,(aJe issued by the Deputy Registrar of Chits <:annot be acted upon' as per Rule - 55 of the Andhra Pradesh Chit Fund Rutes.2008 anrl lhat an execution is maintainable onty if the re( 'overy certiftcate has heen issued by the Registrm of Chits to the conLpetent Civil Court

16. Ori consideration of the aforesaid provisions end on examinatio,r r..- the facts of the case therein, in Bandi Chandrlr Hari v. Brindavan (lhits Karimnagar India Private Limited3' thi ; Court hetd that rirsp(rndent No.l - decree-holder cannot recover double the ) \ r. CRP No ll.8 ,,1 l0lli. decided on 05-11'20lE t. CIRP No.ll- 7 ,,1 10I l. decided on 03.05.2024 \ I T%:* \, I - .. .r._ 12 KL-J CRP No 806 of2025 awarded amount from the petitioner _ judgment debtors, and it is entitled for the decretal amount and interest including pendenr lirc interest as claimed by it Aom the judgment debton. 17' Normafly on realization of the decretal amount, costs and pendent lite ntercs\ respondent No.l - decree-horder shal fire a fuil_ satisfaction memo before the Executing Court with a request to terminate the proceedings in the subject Ep. If respondent No.l fails to file such satisfaction memo, Executing Court can terminate the execution proceedings in the Ep on its own.

18. In view of the aforesaid discussion and observation, the present Civil Revision petition is disposed of directing the Executing court to follow the procedure Iaid down under the lndian contract Act and principle laid down in the aforesaid judgments. In the circumstances of the case, there shall be no order as to costs. As a sequel thereto, miscellaneous petitions, if any, pending in this revision shall stand closed. Sd/. P. PADMANABHA REDDY DEPUTY REGISTRAR //TRUE COPYII SECTION OFFICER t J To,

1. The Ill Additional Junior Civil Judge at Karimnagar. 2. One CC to SRt. GUDI MADHUSUDHAN REDdy Advocate [OpUC] 3. Two CD Copies. PMiKR HIGH COURT DATED:28103/2025 ORDER CRP.No.806 ot 2025 I I :.i t-ltE S 14,-- (i t- .I .\ TJ[l$t 2 0'25 ? Ja- 13 I ,-l '\l \\ ' \',r a., ^. .rEo DISPOSING OF Tl-lE: otvlL REVISION PETITION' b bt{