The High Court · 2025

Counsel for the Respondent No.1: Mr. K.P. Vijay Kumar The Court made the following: ORDER l' 1 l I I I I I I I I HON'BLE SRI JUSTICE K. LAKSHMAN CIVIL REVISION PETITIO N No.l947 OF 2025 ORAL ORDER: Heard Mr. Bathula Rajcsh, learned counsel for the petitioner - judgment debtor Nos.2 and .l and Mr. K.P.Vijay Kumar, learned counsel for respondent No. I - decree holder.

2. ]'his revision is filed trrrder Section - 127 of thc Constitution of India chaltenging the registration ol' EP and the consequential attachuent order datcd 04.10.2023 passcd in E.P No'377 of 2023 in Arbitration Case AllB No.7l9 ot' 2020 by Principal Junior Civil Judge, Karimnagar.

3. Perusal of rccot'd ri'oLrld reveal that on the application lilcd by responder.rt No.1 vrrlc Arbitration Case ARB No.7l9 of 2020' the Chit Arbitrator/Deputy Registrar of Chits, Karirnnagar, had passecl an award dated 16.05.2023 holding that the petitioners herein and respondent Nos.2 to 4 are jointll' and severally liable to pay an amount of Rs.4,03,392l- along with interest @ 18% per annum ltom the date of petition i.e., on 04.08.2020 to tilt the date of realization. T'hey shall also pay Rs. I 0,4 1 8/- towards costs o l the arbitration procccdings \ ') l\t.,.l ( lti'No 1947 042025

4. Pursuant to the said award, respondent No. I hercir-r haci f iled an execution petition vide E.P. No.377 ol 2023 in ARB No.7l9 of 2020 agair Lst the petitioners herein and respondcnl I.Jos.2 to 4 tbr rcco\rery ol'I{s.,s.22,256l- lrom thern. Vide the alirrcsr.id ordcr, lealned Plincipal Juniol Civil Judge, Karimnagar, directed the DisbLrrsing Ol-ficer o1- the petitioners herein to withhold the albresiricl arnount fronl the n-ronthly salarl, of the petitioners herein, judgrr(.nl del)tor Nos.2 anC 5 in the said E.P. Itespondent No.2 herein is thr chit suFrscriher. q'hile the petitioners herein and lespondent No.i and 4 are the guarantors lor the subject chit.

5. It is contended by learned counsel lbr thc lctitioners herein ti'iat the Lr.ecuting Court did not ordcr lor prcport,orratc- tledtLct-ion arnong .iudr3ment debtor Nos. I to 5. Befbre passing rhe order, thc Exccuting lourt neither issued notice, nor providcrl opportunitv ol I-rearing.

6. Irr the light of the said subrnission, it is rclcvanr ro extract Older - X).1, Rules - l1 (2), 48 and 48A of'the CI)(l. wlrich are as under': "XX I Ilulc I I (2) of CPC-Writtcn application- Sevc as otherwise provided by sub-rule(l), cvery aPplicatir n lirr thc /a ) K L,J CRP No 1947 of2025 execution of a decree shall be in writing, signed and verificd by the applicant or by some other person proved 1o the satisfaction ofthe Court to be acquainted with the facts of thc case, and shall contain in a tabular fomr the following particulars, namely- (a) the number of the suit; (b) the narnes of the parties: (c) the date of the decree; (d) whcther any appeal has been prefcrred lrom the decree; (e) u,hcther any, and (ifany) what, payment or othcr adjustment of thc matter in controversy has bcen made betu'een the partics subsequently 1o thr: decree; (I) whethcr any, and (if an1') what, previous applications havc been made for the execution of the decree, the dates o1'such applications and their results; (g) the amount with intercst (if anyl due upon thc decree, or other relief granted thereby, tcigether with. particulars of any cross-decree, whether passcd before or after the date of the decree sought to be execulcd; (h) the amount ofthe costs (ifany) awarded; (i) the name of thc person against rvhom cxecution of the decree is sought; and 0) the mode in rvhich tltc assistancc of the Courl is required whethcr- (i) by the dclivery ofany property specifically decreed; (ii) by the attachmcnt, or by the attachment and sale, or by the sale without attachment. of any property; (iii)by the arest and detention in prison ofany person; 1iv)hy thc apprrintmcnl of u receivcr: (v) otherwise, as the nature ofthe relief granted may require." "Order XXI Rule 48 of CPC-Attachmcnt of salary or allowances of servant of the Govcrnment or railway company or local authority.- (l) Where the property to be attachcd is the salary or allou'ances of a seruant of the Govemment or of a servant of a railway company or local ) ) i i \ \ 4 KI,,J CRP No 1947 012025 autl.ority or of a scrvant of a corporation engaged in rtrr trade or indLrstry rvhich is established by a Central, Provinc:al or State -Act or a Government company as defined in section 617 of thc Conpanies Act, 1956 (l of 1956)l the Courl, uhcther the judllment-debtor or the disbursing officer is or is.r'rol uithin the locr [ limits of the Court's jurisdiction, ma1' ordcr that the amrunt shall, subjcct to the provisions of secti.ln 60, bc ivitlheld from such salary or allowances either in one payttrcnt or t,r, rnonthly instalments as the Courl may direct aud upor.t nolice of the order to such officer as thc tppropriatc Gor ernment rnay by notification in the Olficial Gaze ttc ap1;oinL in tlris bchalf-- (i) rvhere such salary or allorvances arc to bc rLisbursetl rr ithin the local limits to which this Code for the tirnc being e.(tends. the officer or other person whose dutl it is t.o d sburse thc same shall withhold and remit to thc ('ollrt the l nount clue undel the ordcr, or the monthly instalncnts. as tlLc c:rse may be; (b) rvhere such salary or allorvances are to bc ttisburscd b:yond the said limits, the officer or othcr persorr rvithin tlrose limits whose duty it is to instruct the d sbLrrsing a rthority' regarding the amount of the salar.v or alluuanccs to be disbursed shall rsmit to the Court the atn,rurt duc urder thc order, or the monthly instalments, as thc ,:asc may b:. ar,d sha[[ direct the disbursing authority to reduce the a 1glcgatc of the amounts from time to time, to be t[sburscd by the aggregate of the amounts from time to time rernitted to the Cour1. (2) Where the attachable proportion of such saliuy or allowauces is already being withheld and remitted to a Court ir pursuzLnce I '.,. 5 KI,,J CRP No.l9,l7 oil0l5 of a previous and unsatisfied order of attachment, the o{Iicer appointed by the appropriate Government in this behalf shall forthwith retum the subsequent order to the Court issuing it with a full statement of all the parliculars olthe existing attachment. (3) Every order made under this rule, unless it is returncd in accordance with the provisions of sub-rule (2) shall, without further notice or other process, bind the appropriate Govemment or the railway company or local authority or corporation of Government company, as the case may be, while the judgment- debtor is within the local limits 1o rvhich this Code for the timc being cxtends and while hc is bcyond those limits, if he is in reccipt of any salary or atlowances payable out of thc Clonsolidated Fund ol India or tlic Consolidatcd fund ol tlrr- State or the funds of a railway company or local authoritv or corporation or Government company in India; and the appropriate Government or the railu'ay company or local authority or corporation or Governmcnt company, as thc case may be, shall be liable fbr auy sum paid in contravention of this rule. Explanation.-ln this rulc, "appropriate Government" means,- (i) As respects any person iu the servicc oi the Central Govcrnment, or any servant o['a raihlay administration or of a cantonment authority or of the porl authority of a major port, or any servant of a corporation engagcd in any trade or industry rvhich 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 Govcmment or by more than onc State Governments or partly by the Central Goveffrn]ent and parlly by one or more State Governments, the Central Govemment; I \ \ 6 Kl.,l CRI'N0 l.)17 o1 2025 (ii) As respects an), other scruant of the Governlent, or a scn anl ol any other local or other authority, or any :;err ant of a corl;oration engaged in any trade or industry which is eslablishcd by a Provincial or State act, or a servant (,lal1y other Government company, the State Government." "Order - XXl, Rule - 48A. Attachment of salar]. or allowances of private employccs.- (1) Where the property to be atta rhed is the salary or allowanccs of an emplol'ee oLhcr than au :m1.llovcc 1o whom rule 48 applies, the Court. u her.c tlrc drst ursing olficer ol the cmployee is within the loc rl limits of thc 1-ourt's jurisdiction, may order lhan the amoullt slall. sultject Lo t re provision of section 60, be rvithheld from such salaLv or ailowances either in one payment or by monthly ins aLnents as tlic Court may direct; and upon noLice ol the order to such disbursing officer, such disbursing officer shall rcmit to the couit the amount due under the order, or th,: rnolthly ir.tsirrlmcnts. as the case may be. (2) rVherc thc attachable porlion olsuch salary or allouances is aircrrdy being rvithhcld or rernitted to the Courl in prrrsuance of a prr:vicus and unsatislied order ol attachmenL, thc disbursins offir:cr sirall lbfihwith rctum the subsequent order tr, the C-.oufl issu ng it rvith a full statement of all thc partioulars of the exis iing attachment. (3) 3r'ery order made under this rule, unless it is letumerl in acct rdance with the provisions of sub-rule (2), shalt. without ful1lrcr notice or other process. hind the emplol-cr shile the judg mcnl-dehtors. is within the local limits to which this Codc for-the timc being extends and u,hile he is bcyond tl,osc-lirnits. if lrr: is iu receipt ol' salary or allowances payablc out ol' the I t 7 KI-.J CRI' No 1947 o, 2025 f'unds of an employer in any part of India, and the employer shall be liable for any sum paid in contravention ofthis rule."

7. 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 I{cgistrar or the nomincc under section 68 or scction 69 and evcry order passed by the State Governmcnt in appeal under section 70 fbr payment ofany moncy shall, ifnot canied out. (a) on a certificate issued by the Registrar, be deemed to be a decree of a Civil Court, and shall bc cxeculed in the same manner as a decree of such Court, or (b) be executed in accordance with the provisions of any [au, lor the tirne being in force for thc recovery of amounts as arrcars of land revenue: Provided that no application for execution undel clause (b) shall be made after the expiry ol threc 1,ears lront lhe date fixed in the order, and if no such date is fixed, lrorn thc ciatc of the order-"

8. It is also relevant to extract Sections - 126, 128 and 146 of the Indian Contract Act, 1872 and 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 I i{ case of his dclault. The person riho gives the guaranrcc is I' 8 Kl-,.1 Cl{P No.19,17 o12025 call,rd tlre "surety"; the person in respect of whose det-ault the gua anlee is given is called the "principal tlebtor". and the person to u,hom the guarantee is given is called the "creditor". A gua anlec nray be either oral or written." "l2ll. Suretl''s liability.- The liabi)ity of the suretv is co- cxtcnsive with that ol the principal debtor, unless i1 i; otherlrise pro' idcd by the contract." "l4ri. (lo-sureties liable to contribute equally.-WJrcre tuo or lnore persons alc co-surctics for the same debt or- tlutl', cither joinlly or sevcralty, and rvhether under the same (rr diflerenl conrracts, and rvhether lvith or rvithout the knor.vledgc o1'each othir. the co-surelics, in the absence of any oontlact to the conrrary. are liable, as betrveen themselves, to pay ear:h zLn eclual shue of the whole debt, or of that part of it whii:h remains unp rid bv the principal debtor."

9. l'[rus, the tiability o1'the co-surety is co-extensive with that oi'princip:l debtor unless it is otherwise provided by the contract. The said principle rvas also laid down by a Divisi,rn Bench of the High Court of Judicature for the States of Telangana and Andlrra Pradesh at Hyderabad in Punyamurthula Venkata Viswa Sundara Rao v. M/s. Margadarsi Chit Fund Pvt. Ltd.t. '. :o r: 1:; AL I- 82 (D.B.) I I I I I I I r ! 9 KL.J CRP No.1947 ollUls

10. The aforesaid relevant provisions would reveal that lor realization of the amount covered under the arbitration award, respondent No. 1 - decree holder has to file an application under Order - XXI Rule 1 1 (2) of CPC. Accordingly, respondent No. I had tlled the aforesaid execution petition vide E.P.No.377 of 2023 In Punyamurthula Venkata Viswa Sundara Raot, the Division Bench of this Court on consideration of the subrnissions rnade by the parties, framed the following two (02) points tor consideration u,hether the decree holder has to proceed against all the judgment debtors, rvho are guarantors, by claimine proportionatc amount decreed. whethcr the execution Courts in which E.Ps. rverc filcd against thc prescnt judgment debtors, who arc rer''ision petitions hcrein, havc jurisdiction to cntcrtain thc execution petitions.

12. On consideration of the provisions of the Chit F-und Act and the CPC, the Division Bench held that the course that 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 shall himseli issue the 1 I I t0 KI, 1 Clil'No.l91l o12025 ce(ificate and fbrward the said application to the (lourt or revenue authority, e.s chosen b1, tl-re decree holder. The decree holder has an option to rrroceed against cither the principal debtor or any ol the guarantors ol against all of them

13. Ref'erring to Section - 128 of the Indian r-lontracr Act, the Division B:nch held that the liability ol a surety is co-extensive w,ith that of the plincipal debtor unless it is otherrvise provided by the contract.

14. ln Matlamanchi Anill Kumar v. Margad:rrshi Chit Fund Pvt. Limit,:d,' Division Bench of the High Court of Andhra pradesh at Hyderab rd considering the said principle laid down by the Division Bench in Punyamurthula Venkata Vislva Sundara Raor, held that liability ol thc sureties is joint and several. The Div.sion Bench also negatived -he contention raised by the petitioner rherein that a Recove ry (lertificate issued by the Deputy Registrar ol Ch its camrot be acted ul)on, as per Rule - 55 of the Andhra Pri.desh Chit Fund Rules. 200t and that an execution is maintainable onl,,if the recovery cerlificate t as been issued by the Registrar of Chits to the competent Civil Courr. '. cRP No.2l:S of 20 t8. decidcd on 05.I I 2018 I I RI,,J ( RP No 19.r7 otl0li

15. On consideratlon of the afbresaid provisions and on examination ol the facts of the case therein, in Bandi Chandra Hari v. Brindavan Chits Karimnagar lndia Private Limitedr, this Court held that respondent No.I - decree-holder cannot recovel double thc awarded amount frorn the petitioners - judgment debtor Nos.2 and 5, and it is entitled fbr the decretal amount and interest including pcnclertt I t /i/e interest as clairned by it from the judgment debtors. I I

16. It is apt to note that on realization of the decretal amourrt, costs, interest and pendent /ife interest, respondent No. I - decree- holdcr shall file a full-satisfaction memo before the Executing Court with a request to terminate the proceedings in the subject EP. tl respondent No.l fails to file such full satisfaction memo, Exccuting Court can tenr-rinate the execution proceedings in the EP on its own.

17. ln view of the aforesaid discussion and obsen'ation, thc present Civil Revision Petition is disposed of directing the Executing Court to follow the procedure laid down under the Indian Contract Act and principle laid down in the aforesaid judgments and dispose of the '. CRP No.1237 ot2024, dccidcd on 03.05.2024 I ) \:ia! (1..r cRP No leJT oftl)li aloresaid e<ecution petition. In the circur-nstances o - the c,ase, there shall be no ordcr as to costs As a sequel thercto, miscellaneous petitions, il any, pending in this revisio,r shall stand closed /iTRUE COPYII Sd/. A. SREENIVASA REDDY ASSISTANT REGISTRAR SECTI JhY.,".* To,

4. The Princ pal Junior Civil Judge at Karimnagar One CC kr SRl. RAJESH BATHULA, Advocate [OPUC:] One CC to K.P. Vijay Kumar, Advocate [OPUC] Two CD (;opies GEiSS t4 -r ' l ! I HIGH COURT KLJ DATED:20/06t2025 ( ORDER CRP.No.1947 of 2025 i... ( :t 3 1E SEP Zffi N.'\.- on. -\: t ', *- -tl DISPOSING CIF THE C.R.P. WITHOUT COSTS. Ia( Iel