Arepally Vijaya v. 1. M/s. Shriram Chits Private Limited

Petition under Section 15'1 OF CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the Order dated '10-04-2025 in E.P.No. 286 o'f 2021 in A.R.B.No. 04 of 2020 on the file of the I Additional Junior Civil Judge at Karimnagar, pending final disposal of the main Revision Petition. Counsel for the Petitioner: PAPAIAH PEDDAKULA Counsel for the Respondent NO.1: K S SAI PAVAN The Court made the following: ORDER THE HON'BLE SRI JUSTICE N. TUKARAMJI CIVIL REVISION PETITION No.283O OY 2025 ORDER This Revision has been filed challenging the decree and order dated 1O.O4.2O25 in E.P. No.286 of 2O2l in Arb. No.4 of 2O2O on the hle of I Additional Junior Civil Judge-cum-I Additional Jttdicial Magistrate of I Class, Kaimnagar.

2. I have heard Sri Papaiah Peddakula, learned Counsel for the petitioner and Sri K.S. Sai Pavan, learned Counsel for respondents.

3. Briefly stated, the relevant facts are that Respondent No. 1/Decree Holder in Arb. No.4 of 2O2O instituted E.P. No.286 of 2O2l against the petitioner and three others seeking attachment of salary to realize the arbitral award. The factual background reveals that Respondent No. I had advanced a chit amount under a joint garnishee bond dated 07 .O7 .2O 17 , wherein Respondent No.3 was the principal borrower, while Petitioner and Respondent Nos.1 and 4 to 6 stood as sureties. As the principal borrower (Re spondent No.3) defaulted in payment of instalments, Respondent No.I invoked arbitration 2 befr;re the Deputy Rcgistrar of Chits, Karimnagar. By an award dated 18.01.2O2 1, the Arbitrator decreed recovery of Rs.9,95,O00/ erlong u,ith interest at 1801, per zrnnuln on lhe principal sunr of Rs.9,OO,00O/ - until realization, jointly ancl severall.y against thc petitioner and Respondent Nos.3 to 5 Based on this ar,",ard, Respondent No.1, as decree holder, initiatecl execution proceedings against the sureties, whereupon the executingi Court issued salary attachment warrant against the petitioner under the impugned order. Aggrieved, the petitioncr prelcrred lhe presenL revision.

4. Learnetl counsel for the petitioner contends that the execution proceedings are vitiated by non-compliance with the mandaton'' procedure under Section 7A read with Rule 55 of the Chit Fr,rnds Act, 1982. It is urged that, as per law, the arbitral award must be transmitted by the Arbitrator to the competent executing Court, and not initiated directly by the decree holder. Reliance is placed on the Division Bench ruling in Punyamurthu la Venkata Visua Sundara Rao u. Margadarsi Chit Furtd Put. Ltd., (2OI7l 3 ALD 387 (DB), which held that execution proceedings initiated solely at the behest of the decree holder are contrary to the statutory mandate. Further, it is argued that the executing Court erred in directing recovery- e{. l the entire decretal amount exclusively from the petitioner, overlooking the settled principle that liability under a joint and several award must be apportioned across all judgment debtors. He emphasized that it is settled position that, execution cannot be enforced against one guarantor in isolation when the liabilify attaches equally to all sureties and the principal borrower. Moreover, the petitioncr contends that, despite Respondent No.1 having filed execution against all judgment debtors, the executing Court issued a warrant of attachment only against the petitioner, rendering the order arbitrary and unsustainable.

5. In reply, learned counsel for Respondent No. I submits that the arbitral award was passed on merits and in strict compliance '"r'ith statutory procedure. The Deputy Registrar of Chits issued a recovery certiflcate, and the execution petition was accordingty filed before the competent Court. It is further argucd that the reliance placed by the petitioner on htngamurthula Venkata Viswa Sundora Rao (supra) is misplaced, as the said judgment has been declared per incuriam by a Division Bench of this Court in Madamanchi Anil Kumar u. Margadarsi Chit Fund Put. Ltd., CRP No.2338 of 2018, decided on 05.1 1.2O 18. The same position was reiterated in Shakeel Mohammad u. M/s. Kanakadurga Chit Funds Put- Ltd., CRP 4 No.2876 of 2024, decided ot L7.12.2O24, where the Court upheld execution initiated upon a recovery certificate. It is also urged th.lt the Hon'ble Supreme Court has categorically held that the cxecuting Court lacks authority to "pick and choose" among juclgmer-rt debtors or to restrict recovery to particuiar individuals, given that liability under such awards is joint and several. The contention that cxecution has been directed only against the petitioner is unfounded, as records from the e- Courts portal establish that warrants of salary attachment were indeed issued against all judgment debtors, i.e., Respondent Nos.2 to .5. Consequently, it is submitted that the impugned ordcr is legallv sustainable and the revision is devoid of merit. I have perused the materials on record. t . 1.. The contention of the petitioner against the impugned order is threefold: first, that the execution petition was instituted without compliance with the procedure mandated under Section 7l of the Chit Funds Act, 1982 and Rule 55, the Rules framed thereunder; secondly, that the attachment warrant was erroneously issued for the entire decretal amount, though all sureties are equally liable to contribute; and thirdiy, that the executing Court issued an attachment warrant soiely against the petitioner, ignoring the other judgment debtors, 5 despite the execution petition having been filed against all of them.

8. With respcct to the first contention, Respondent No.t has placed on record a letter issued by the Deputy Registrar of Chits, Karimnagar, dated 29.O9.2021, addressed to the Junior Civil Judge, Karimnagar. This communication expressly refers to the issuance of a rccovery certiftcate under Section 71A of the Chit Funds Act, 1982, read with Rule 55(2) of the Chit Funds Rules, 2O08, in Arbitration No.4 of 2020. The said recovery certificate was forwarded along with the application filed by Respondent No. I for execution. The existence of this document demonstrates compliance with the statutory procedure. Therefore, the petitioner's argument that the execution petition l:lcks legal foundation on account of procedural non-compliance is untenable and devoid of merit.

9. Turning lo the second contention, it is argued that the attachment warrant should have been confined only to the petitioner's proportional share of liability as a surety. Section 147 of the Indian Contract Act, 1872 does indeed contemplate that, as between themselves, co-sureties are liable to contribute equally towards the satisfaction of the debt. However, the arbitral award in the present case clearly declares the liability of .-,-' -\ 6 the petitioner as joint and seueral along with the other judgment debtors, including the principal borrower. The principle of joint and several liability, firmly embedded in Indian contract jurisprudence, empowers the decree holder to proceed against any one or more of the judgment debtors for realization of the entire decretal amount, leaving it to the judgment debtors to adjust their inter se liabitilies thereafter. Therefore the apprehension expressed by the petitioner that attachment of the entire decretal sum from a single surety would result in prej udice is misplaced.

10. Further, under Section 60 of the Code of Civil Procedure, 1908, any amounts recovered from different judgment debtors are ultimatelv appropriated tovvards satisfaction of the decretal dues. Shoulcl any surety discharge more than his equitable share of liabiliry, the principle of subrogation enables him to seek contribution from his co-sureties for any excess paid '. beyond his legal liability. This settled position of law ensures ' adequate protection of a suret5r's rights without imposing unwarranted restrictions on the decree holder's entitlement to execute the award. Hence, the contention that the attachment warrant should be confined only to the petitioner's share cannot be sustained at this stage of execution proceedings. /'''- Y 7

11.. As regards the third contention, namely, that the salary attachment warrant was issued only against the petitioner, this argument is equally baseless. The proceedings sheet of the executing Court dated 1O.O4.2025 indicates that attachment reports in respect of Judgment Debtor Nos.2 and 4, including the petitioner, were awaited, while fresh salary attachment orders were simultaneously issued against Judgment Debtor Nos.3 and 5. This documentary record establishes that the executing Court has, in fact, proceeded uniformly against all judgment debtors, and not selectively against the petitioner as alleged. 1,L. In view of the loregoing discussion, the contentions advanced by the petitioner fail to disclose any tenable ground warranting interferencc with the impugned execution proceedings. Accordingly, this Civil Revision Petition is dismissed. No order as to costs. Miscellaneous petitions, if any, pending in the Petition, shall stand closed. \ To, SD/.M.NAGAMANI ASSISTANT REGISTRAR I //TRUE COPY// CTION OFFICER

1. The I Additional Junior Civil Judge at Karimnagar. 2. One CC to SRI PAPAIAH PEDDAKULA Advocate [OPUC] C',ta- '

3. One CC to SRI K S SAI PAVAN Advocate [OPUC] 4. Two CD Copies GR/PSL -J+' I I HIGH COURT DATED:1 110912025 .S T4 I I -* 28 JAN 2026 7z P I I LI I I ORDER CRP.No.2830 of 2025 DISMISS!NG THE CRP f-<s wf'l*