High Court · 2025

Petition under Section 151 CPC praying that in the circumstances stated rn the affidavit filed in support of the petition, the High Court may be pleased to Stay all further proceecings against the petitioner / JDR No. 6 in EP No. 486 of 2023 tn ARB No 238 of 2020 by the Learned tll Addl Junior Civil Judge, Karimnagar in^clu_ding by recalling the warrant of attachment of movable irr"p"nv"llLO 13 12 2024 issued by the. Learned- Judge against the movable p-p..ty #if,. petitioner hearin pending disposal of the Jnove CRp. Counsel for the Petitioner :SRl. B JAGADISH Counsel for the Respondent No.1: SRl. K.p. VIJAY KUMAR The Court made the following: ORDER HON'BLE SRI JUSTTCE K. LAKSHMAN CryIL REVISION PETITION No.1164 OF 2025 / ORAL ORDER: Heard Mr. B. Jagadeesh, leamed counsel for the petitioner and Sri K.P.Vijay Kumar, learned counsel appearing for 1't respondent.

2. This revision is filed under Section - 115 of Code of Civil Procedure,l9O8 (for short,'the CPC') to set aside the warrant of attachment dated 13.12.2024 in E.P.No.486 of 2023 in ARB.No.238 of 2020 by the III Additional Junior Civil Judge at Karimnagar. J 2nd respondent is the subscriber of the chit. The petitioner, respondent Nos.3 to 6 are guarantors. 1" respondent has filed application under Section 64 of the Chit Funds Act,l982 ( for shon, 'the Act') against the petitioner, respondent Nos.2 to 6 for recovery of an amount of Rs.5,70,270l- along with interest at lSYo p.a. on the principie sum of Rs.4,64,0441- from the date of filing of dispute till the date of realization and costs, before the learned Deputy Registrar of Chits/District Registrrar, Karitnnagar, who in turn passed Award dated 16.05.2023 holding that the petitioner, respondents 2 to 6 are jointly and severely to pay to l't respondent. 2 --! KI,,J CRP No I164 of202i

4. Pursuant to the said award, respondent No.t herein had filed an execution petition vide E.P. No.4g6 of 2023 in ARB No.23g of '.i 2020 seeking execution of the said award against the petitioner herein and respondent Nos.2 to 6 for recovery of Rs.4,75,14gl_ from them. Learned Executing Court has issued warrant of attachment dated

13.12.2024- challenging the said order, the peririoner filed the present writ petition.

5. The Executing Courl has issued similar attachment to respondent Nos.2 to 4 and 6. Therefore, by virtue of the said attachment orders, there would be recovery of four times of the amount awarded by the Chit Aroitrator. The same is impermissible.

6. It is contended by leamed counsel for the petitioner herein that the Executing court did not order for proportionate deduction from the petitioner and respondent Nos.2 to 4 and 6. Before passing the order, the Executing Court neither issued notice, nor provided opportunity of hearing.

7. It is also relevant to note that, it appears that leamed Executing Court issued similar orders against respondent Nos.2 to 4 and 6 for attachment of movable properties. a 3 KL,J CRP No.l 164 of2025

8. Thus, the Executing Court directed to recover the aforesaid amount from the petitioner and respondent Nos.2 to 4 and 6 each. If the said amount is recovered and remitted to the account of the aforesaid 8.P., it amounts to recovery of more than the awarded amount. Thus, the same is in violation of the procedure laid down under Contract Act, and also the principle laid down by this Court The said aspects were not considered by the Executing Court while issuing impugned attachment orders.

9. It is relevant to extract Order - XXI, Rules - 11 (2),48 and 48A ofthe CPC and the same are as under: "XXI Rule 1l (2) of CPC-Written application- Save as otherwise provided by sub-rule(t), every application for the execution ofa decree shall be in rvriting, signed and verified by the applicant or by some other pcrson proved to the satisfaction ofthe Court to be acquainted with the facts ofthe case, and shall contain in a tabular lorm the lollowing pa(iculars. namely- (a) the number of the suit; (b) the names of the parties; (c) the date of the dl"r""; (d) whether any appeal has been prefened from the decree; (e) whether any, and (if any) what, payment or other adjustment of the matter in controversy has bcen made between the parties subsequently to the decree; 4 KL.J CRP No. I 164 of202i ' (f) whether any, and (if any) what, previous applications have been made for the execution ol the'decree, th'e'Jatcs of such applications and their results: (g) the amount with interest (if any) due upon the decree. or other relief granted thereby, together with particulars of any cross-decree, whether passed belore or after the date of the decree sought to be executed; (h) the amount ofthe costs (ifany) awarded: (i) the name of the person against whom execution of the decree is sought; and fi) the mode in which the assistance of the Court is required whether- (i) by the delivery olany property specifically decrced; (ii) by the attachment, or by the attachment and sale, or by the sale without attachmcnt, ofany properry; (iii)by the arrest and detention in prison ofany person; (iv)by 11'," appointment of a receiver; (v) otherwise, as the nature ofthe reliefgranted may require.,, "Order XXI Rulc 48 of CpC-Attachment of salary or allowances of servant of the Government or railu.ay company or local authority.- (l) Where the propcrty to be aftached is the salary or allowanccs of a servant of the Govemment or of a servant of a railway company or Iocal authority or of a servant ola corporation engaged in any trade or industry which is established by a Central, provincial or State Act, or a Government company as defincd in scction 617 of the Companies Act, 1956 (l of 1956)l rhe Court, whether the judgmenfdebtor or the disbursing officer is or is not within the local limits of the Court,s jurisdiction, may order that the amount shall, subject to the provisions of section 60. be withheld from such salary or allowances either in one payment or by monthly instalments as the Court may direct; and upon llotice of the order to such officer as the appr-opriate 5 Kt-,J CRP No.l164 of202i Govemment may by notification in the Ofhcial Gazette appoint in this behalf,- (a) where such salary or allowances are to be disbursed within the local limits to which rhis Code for the time being extends, the officer or other person whose duty it is to disburse the same shatl withhotd and remit to the Court the amount due under the order, or the monthly instalments, as the case may be; (b) where such salary or allowances are to be disbursed beyond the said timils, the oificer or other person within those limits whose duty it is to instruct the disbursing authority regarding the amount of the salary or allowances to be disbursed shall remit to the Court the amount due under the order, or the monthly instalments, as the case may be, and shall direct the disbursing authority to reduce the aggregate ofthe amounts from time to time, to be disbursed by the aggregate of the amounts from time to time remitted to the Court. (2) Where the attachable proportiolt of such salary or allowances is already being withheld and remitted to a Court in pursuance of a previous and unsatisfied order of attachment, the officer appointed by the appropriate Govemment in this behalf shall forthwith retum the subsequent order to the Court issuing it with a fu[[ statement ofatl the particulars ofthe existing attachment. (3) Every order made under this rule, unless it is returned in accordance with the provisions of sub-rule (2) shatl, without further notice or other process, bind the appropriate Govemment oi the railway company or local authority or corporation of -1 'I j 6 KL,J CRP No.l I64 of2025 Govemment company, as tl mav be' while the judgment- debtor is within the ,r.", ,,:'::t which this code for the time 'o being extends and while n"nt" receipt or any sarary ". ;,:il::J'ffi;":i: ::,i;: Consolidated Fund of India or the Consolidated F-und of the state or the funds of a rairv Yay company or local authoritv or corporalion or Govemment .^h^.^.. :,,. totoun, in india; and the appropriate Govemment o.'t companv or local authority or corporation may be, sharr be riabre ,". ",,;".:ffi,;T."ffJ"-::Jil. ". "^'::-':1*.'v ru le. means.- Explanation._In this (iovemment rule, "appropriate Govemment,, (i) As respects any person in the service of the Ceutral Govemment, or any servant of a railway administration or of a eantonment authority or of r. re port authority ofa major port' or any servant of a corporatio rvhich is estabrished r, ":::::i"1; ::r#';#::T company in wl ch any part of the share capital is held by the central Goven Govemmenrs or pa(ry rr,r"T:::iiJ;;';:iH.ffi:; one or more State Governments, the Central Government; (ii) As respects any other s servant of any other rocar ".;il:;:.::; ::fi:.::,:;; coryoration angaged in any trade or industry which is of anv orher established by a provincial Govemment company,,r" rr,:T:,::::il:'"-' or I "Order - XXI, Rule _ 4l a,owances or priva te .r.,rrt":. l;;l]:T. ;il:fl ;J ) I I -- / 7 KL,J CRP No.l lf4 of2025 attached is the salary or allowances of an employee other than an employee to whom rule 4g applies, the Court, where the disbursing officer of the employee is within the local timits of the Court's jurisdiction, may order than the amount sha[[, subject to the provision of section 60, be withheld from such salary or allowances either in one payment or by monthly instalments as the Court may direct; and upon notice of the order to such disbursing officer, such disbursing officer shall remit to the court the amount due under the order, or the monthly instalments, as the case may be. (2) Where the attachable portion of such salary or allowances is already being withheld or remitted to the Court in pursuance of a previous and unsatisfied order of attaclunent, the disbursing officer shall forthwith retum the subsequent order to the Court issuing it wilh a full statement of all the particulars of the existing attachment. (3) Every order made under this rule, unless it is retumed in accordance with the provisions ol sub-rule (2), shall, without further notice or other process, hind the employer while the j udgment-debtors, is within the local limits- to which this Code for the ti&e being extends and while he is beyond those-limits, if he is in receipt of salary or allowances payable out of the funds of an employer in any part of India, and the employer shall be liable for any sum paid in contravention ofthis rule.',

10. It is relevant to extract Section - 71 of the Chit Fund Act, 1982 and the same is as under: 8 !-, .--t KI,,J CRP No. l 164 of20)- I "71. Money how recovcred.-Every order passed by the Registrar or the nominee under section 6g or section 69 and every order passed by the State Govemment in appeal under section 70 for pavment ofany money shall, ifnot carried out. (a) on a cenificate issued by the Registrar, bc deemed to be a decree of a Civil Court, and shall be executed in the same manner as a decree of such Court, or (b) be executed in accordance with the provisions of any larv for the time being in force for the recovery of amounts as arrears of Iand revenue: Provided that no application for execution under clause (b) shall be made after the expiry ol three 1.ears lrom the date fixed in the order, and if no such date is fixed. lrom the date of the order." I 1 . It is also relevant to extract Sections _ 126, llg and 146 ol the Indian Contract Act, 1872 anci the same is as under: "126. "Contract of guarantee,', .,sureQr", ..principal debtor" and "creditor".-A "contract of guarantee" is a contract to pcrform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee is called the "surety"; the person in respect of whose delault the guarantee is given is called the ..principal pcrson to whom the guarantee is given is called the ,.creditor,,. debtor,', and the .. A guarantee may be either oral or written." "128. Surety's liability.-The liability of rhe surely is co_ extensive with that ofthe principal debtor, unless it is otherwise provided by the contract.,, 9 KI-,J CRP No.1l64 of2025 "146. Co-sureties liable to contribute equally.-Where two or more persons are co-sureties for the same debt or duty, either jointly or severally, and whether under the same or different contracts, and whether with or without the knowledge of each other, the co-sureties, in the absence of any contract to the contrary, are liable, as between themselves, to pay each an equal share of the whole debt, or of that part of it which remains unpaid by the principal debtor."

12. Thus, the liability of the co-surety is co-extensive with that of principal debtor unless it is otherwise provided by the contract' The said principle was also laid dorvn by a Division Bench of the High Court of Judicature for the States of Telangana and Andhra Pradesh at Hyderabad in Punyamurthula Venkata Viswa Sundara Rao v. M/s. Margadarsi Chit Fund Pvt. Ltd.l.

13. The aforesaid relevant provisions would reveal that for realization of the amount covered under the arbitration award, respondent No,1 - decree holder has to file an application under Order - XXI Rule I 1 (2) of CPC. Accordingly' respondent No. I had filed the aforesaid execution petition vide E.P.No.486 of 2023 . 14 In Punyamurthula Venkata Viswa Sundara Raor, the Division Bench of this Court on consideration of the arguments '. zo tz (:) e.Lr sz (o.e.) I I l L I l0 KL.J CRP No I164 of202i advanced by rhe parties, framed the following two (02) points for consideration: .l lt. r.vhether the decree holder ltas to proceed against all the .judgment debtors, who arre guarantors, by claiming Proportionate amount decreed. whether the execution Courts in which F..ps. were filed against the present judgment debtors, who are revision petitions herein, have ;urisdiction to entertain the execution pctitions.

15. On consideration of the provisions of the Chit Fund Act and the CpC, the Division Bench held that the recourse that has to be followed by the decree holcier is to make an application to the Registrar for execution, to be forwarded to the proper authority at the option of rhe decree holder and the Registrar shall himself issue the certificate and lonvard the said application to the Court or revenue authority, as chosen by the decree holder. The decree holder has an option ro proceed against either the principal debtor or any of the guarantors or against all of thern. Referring to Section _ I2g of the Indian Contracr Act. the piyi5isn Bench held that the liability of a surety is co_extensive with that of the principal debtor unless it is otherwise provided by the contract- I KL,J CRP No.l 164 of2025

16. In Madamanchi Anill Kumar v' Margadarshi Chit Fund Pvt. Limited,' Division Bench of the High Court of Andhra Pradesh at Hyderabad considering the said principle laid down by the Division Bench in Punyamurthula Venkata Viswa Sundara Raor' held that liability of the sureties is joint and several' The Division Bench also negatived the contention raised by the petitioner therein that a Recovery Certificate issued by the Deputy Registrar of Chits cannot be acted upon, as per Rule - 55 of the Andhra Pradesh Chit Fund Rutes, 2008 and that an execution is maintainable only if the recovery ceftificate has been issued by the Registrar of Chits to the competent CivitCourt.

17. On consideration of the aforesaid provisions and on examination of the facts of the case therein, in Bandi Chandra Hari v. Brindavan Chits Karimnagar India Private Limitedr' this Court held that respondent No'1 - decree-holder cannot recover double the awarded amount from the petitioner - judgment debtor' and it is entitled for the decretal amount and interest including pendent lite interest as claimed by it from the judgment debtors' t t I I t. cRP No.2i38 0f2018, decidedon05.tI 20lE '. cRP No.l237 of 2024. decided. on 03 .05 '2024 l2 KL.J CRP No. t I64 of202-i 18 As per Section - 60 of CpC after deducting standard deduction plus one thousand and 2Bd of remaining gross salary and shall remit balance l/3'd of salary every month from the date of receipt of the wa nant. .l

19. Normally, on realization of the decretal amount, costs and pendent lite interest, respondent No.l _ decree_holder shall file a full_ satisfaction merno before the Executing Couft with a request to terminate the proceedings in the subject Ep. If respondent No. I fails to file such satisfaction memo, Executing Court can terminate the execution proceedings in the Ep on its own.

20. In view of the aforesaid discussion and observation, the presenr ci'ir Re'ision petition is disposed of directing the Executing court to fo,ow the procedure raid down under the India,n 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. s //TRUE COPYII ftii,H.X'.Hi?AiH ,l SECTION OFFICER '?l !lr:1 jgne Karimnagar IAGADtSH Advocate IOedCl P vtJAy KUMAR navocatJ 1ocUCl To, 1 2 3 4 I'Kigh The lil Addt Jun One CC to SRt. B One CC to SRI K Two.CD Copies {p- l 'i I I THE S 14 e-B s 21 AUE 206 t) -4 i o ) 2, HIGH COURT DATED:2StO4t202S ORDER CRP.No.1164 ot 2O2S DISPOSING OF THE CRP vt- 14 >)