The High Court · 2025

Heard Sri Y.Yadu Krishna Sainath, learned counsel for the petitioner - Judgment Debtor No'4' Despite service of notice' there is no representation on behalf of respondent No'I - Decreeholder' Respondent Nos.2 to 5 - J.Dr.Nos'l to 3 and 5 are not necessary parties and the said fact is mentioned in cause title itself'

2. This revision is filed under Section - I 15 of the CodB of Civil Procedure, 1908, challenging the order dated 09'07'2024 passed inE.P'No.183of2024inARB.No.365of202lbytheleamedl Additional Junior Civil Judge at Karimnagar'

3. Respondent No.1 had filed an apptication under Section 64 of the Chit Fund Act, 1982 before the Chit Arbitrator/Deputy Registrar of Chits at Karimnagar against the petitioner herein and respondent Nos. 2 to 6 herein for recovery of Rs'6,39,125l- with interest at the rate of Rs.18%o p.a. from the date of filing of dispute to titl the date of realization of the said amount and costs'

4. The Deputy Registrar of Chits at Karimnagar' has passed an award dated 02.12.2023 hotding that the petitioner and respondents 2 2 t l_,J CRP No 4206 of2024 to 6 herein are jointly and severally liable to pay an amount of Rs.6,39,125l- u'ith interest at l8%o p.a. to the 1'r respondent herein.,

5. l" respondent has filed E.P.No.183 of 2023 in ARB No.365 of 2021 fbr execution of the aforesaid Award. Leamed I Additional Junior Civil Judge at Karimnagar, has issued impugned salary attachment order dated 09.07.2024 directing the Disbursing Officer of the petitioner herein/J.Dr.No.4 i.e. The Executive Engineer, I & CAD, Division No.2 of IIrFC-ll, LMD Colony, Karimnagar District, to withhold the surn ol Rs.9,49,273l- from the monthly salary of the petitioner, and remit the said amount to the account of the aforesaid EP.

6. It is also relevant to note that, leamed Executing Court has issued similar orders directing the Disbursing Officer of judgment debtor Nos.5 and 6 to withhold the said amount of Rs9,49,273l- each from their salaries of J.Dr.Nos.5 and 6 as per Section - 60 of CPC after deducting standard deduction plus one thousand and 2/3'd of remaining gross salary and shall remit balance 1/3'd of salarv every month from the date of receipt of the warrant

7. Challenging the said attachment order dated 09.01 .2024, the petitioner hereiniJ.Dr.No.4 filed the present revision n J KL.J CRP No 4206 of2021

8. Perusal of the aforesaid salary attachment order dated

09.07 .2024 issued by the Executing Court in respect of the petitioner/J.Dr. No.4 would reveal that Executing Court has directed the Disbursing Officer of the petitioner herein to withhold the amount of Rs.9,49,,273l-from the salary of the petitioner herein Leamed Executing Court has also passed similar salary attachment orders in respect of J.Dr.5 and 6. Thus, the Executing Court directed all the Disbursing Officers of J.Dr.No.4 the petitioner herein and respondent Nos.5 and 6 - J.Dr.Nos.5 and 6 herein to deduct and recover an amount of Rs.9,49,2731- each from their salaries. In [act, the aforesaid execution petition was filed by respondent No.l - D.FIr to execute the award for recovery of Rs.9,49,273l- from the petitioner herein and respondent Nos.2 to 6. If the Disbursing Officer withhold the said amount and remit to the account of the aforesaid EP, it amounts to recovery of three times of the awarded amount. The same is in violation of the procedure laid down under Contract Act, the Chit Fund Act, 1982 and also the principle laid down by this Court in CRP No.2660 of 2024 dated 18.10.2024. The said aspects were not considered by the Executing Court while issuing impugned salary attachment orders. 4 t\ L..J CRP No.4206 of2024

9. It is relevant to note that Section - 36 of the Arbitration and Conciliation Act, I996 deals with 'enforcement of award' and the same is relevant for the purpose of considering the ir.s in the present revisions and it is extracted below: -Where "Section -j6:-E n fo rcement. the time for making an application to set aside the arbitral Award under section 34 has cxpired, or such application having becn made. it has bccn refused, the award shall be enforced under thc Code ol-(livil Procedure, 1908 15 of 190t1) in the same manner as il- it u,ere a decree of the Court. (2) Wherc an application to set aside the arbitral award has been filcd in the Clourt under section 34, the hling of such an application shalI not by itself render that award unenforccable, unlcss thc Court grants an order of stay of' thc operation ol thc said arbitral award in accordance with thc provisions of sub-section (3), on a separate application madc lirr that purposc. (3) Upon liting ol'an application under sub-section (2) fbr stal' of thc operation of the arbitral award, the Court may, sub.jcct to such conditions as it may deem lit, grant stay of the operation ol such award fbr reasons to be recorded in writing: Provided that the Court shall, while considering the application hrr srant ol stay in the case of an arbitral award lbr palrncnt of rnoney, have due regard to the provisions / (') 5 KL,J CRI'N0.4206 of2024 for grant of stay of a money decree under the provisions of thc Code ofCivil Procedure, 1908 (5 ol 1908)."

10. It is also relevantto extract Order - XXI, Rules - 11 (2),48 and 48A ofthe CPC and the same are as under: "XXI Rule I I (2) of CPC-Written application- Save as otherwise provided by sub-rule(l), every application for the execution of a decree shall be in writing, signed and verified by the applicant or by some other person proved to the satisfaction ofrhe Clourt to be acquainted with the facts ofthe case, and shall contain in a tabular form the following particulars, namely- (a) the number of the suit; (b) the names ofthe Parties; (c) the date of the decree; (d) whether any appeal has been preferred from the decree; (c) whether any, and (if any) what, payment or other adjustment of the matter in controversy has been made between the parties subsequently to the decree; (Q whether any, and (if any) what, previous applications- have been made for the exccution of the decree, the dates of such applications and their results; (g) the amount with interest (if any) due upon the decree, or oiircr relief grantcd thereby, together with particulars of any cross-decree, whether passed before 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 6 K I-.J CRP No 1206 of2021 \ (i) the nrode in u.hich the assistance of the Court is required whether- (i) b_v the dclivery ofany property specifically decreed; (ii) by the atlachment. or by the attachment and sale, or by the sale u,ithout atlachment, olany property; (iii)b1,the arrest and detention in prison ofany person: (ir th) the appointment ofa recciver: (v) otheru,isc, as the nature ol the relief granted may require." "Ordcr XXI Rule 48 of CPC-Attachment. of salary or allowances of sen,ant of the Government or railway company or local authority.- (l) Where the prope(y to be attached is thc salary or allowanccs of a servant of the Govemnrent or of a servant ol'a railway company or local authority or ol'a servant of a corporation engaged in any trade or industry rvhich is established by a Central, Provincial or State Act, or a (iovemment company as defined in section 6l 7 of the Companics Act. 1956 ( I ol 1956)l the Court, whether the judgmenfdebtor or the disbursing officer is or is not within the Iocal limits o1' the (lourt's jurisdiction, may order that the amount shall. subject to the provisions of section 60, be withheld liom such salarv or allowances either in one paymenl or b1 monthly instalments as the Court may direct; and upon notice ol' the order to such officer as the appropriate Govemmcnt ma1 by notification in the Official Gazette appoint in this behalt.- (a) where such salary or allowances are to be disbursed within the local limits ro which this Code for the time being extends. the officer or other person whose duty it is to disburse the same shall withhold and remit to the Court the amount due undcr the order. or the rnonthly instalments, as the case nrar hc: a 7 KI-.J CRP No.4206 of2024 (b) where such salary or allowances are to be disbursed beyond the said limits, the officer 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 of the 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 proportion ofsuch 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 Government in this behalf shall forthwith retum the subsequent order to the Court issuing it with a full statcment of all thc particulars ofthe existing attachment. (3) Every order made under this rule, unless it is retumed in accordancc with the provisions of sub-rule (2) shall, without further notice or othcr 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 to which this Code for the time being extends and whilc he is beyond those limits, if he is in receipt of any salary or allowances payable out of the Consolidated Fund of lndia or the Consolidated Fund of the State or the funds of a railrvay company or local authority or corporation or Govemment company in India; and the appropriate Govemment or the railway company or local authority or corporation or Govemment company! as the case 8 KL.J CRP No 4206 of2024 may be. shall bc liable lbr any sum paid in contravention of this rule. Esplanation.-ln this rule. "appropriate Got ernment" means-- (i) As respecls any person in the service of the Central Govemment, or any servant of a railway administration or of a cantonment authority or of the port authority of a major port, or any servant of a corporation engaged in any trade or industry which is established by a Central Act, or any servant of a Govemment comp:rny in which anv part of the share capital is held by the Central Govemment or by more than one Stale Govemments or part[]' by the Central Covemrnent and partly by one or more State Governments, the Central Govemment; (ii) As respects an) other servant ol' the Governnrent, or a servant ol'any other local or othcr authority, or any servant of a corporation engaged in an1, trade or industry u,hich is established b1 a ProvinciaI or Statc act. or a scrvant ofany other Government companv. thc State (iovemnrent." "Order - XXI, Rule - 48A. Attachment of salary or allowances of privafe employees.- (l ) Where the property to be attached is the salary or allowances of an employee other than an employee to whom rule 48 applies. the Cou(, rvhere the disbursing off-rccr of the employec is rvithin the local lirnits of the Court's jurisdiction. may order than the amount shall. subject to the pro\ lsion of sectron 60, be withheld lrom such salary or :rllorvances either in one payment or by monthly instalnlents as the Court may direcl: and upon notice of lhc order to such clisbursing officcr, such disbursing oflicer shall remit to the (1 9 KI-J CRP No.4206 of2024 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 attachment, the disbursing officer shall forthwith retum the subsequent order to the Court issuing it with a full statement of all the particulars of the existing attachment. (3) Every order made under this rule, unless it is returned in accordance with the provisions of sub-rule (2), shall, without further notice or other process. hind the employer while the judgment-debtors, is within the local limits to which this Code for the time being extends and while he is beyond those-limits, if he is in receipt o[ salary or allowances payable out of the funds of an employer in any part of India, and the employer shall be tiable for any sum paid in contravention of this ruIe." I L It is also relevant to extract Section - 7l of the Chit Fund Act, 1982 and the same is as under "71. Moncy how recovered.-Every order passed by the Registrar or the nominee under section 68 or section 69 and every order passed by the State Government in appeal under section 70 for payment of any money shall, if not carried out,- (a) on a certifioate issued by thc Registrar, be deemed to be a decree of a Civil Court. and shall be executed in the same manner as a decree of such Court. or l0 KL,.I CRP No 4206 of2024 (b) be executed in accordance with the provisions ofany lau for the time bcing in lorcc for the recovery of amounts as arrears of Iand revenue: Provided that no application for execution rrnder clause (b) shall be made after the expiry of three ycars from the date fixed in the order. and if no such date is fixed. from the datc of the ordcr."

12. It is also relevant to extract Sections - 126, 128 and 146 of the Indian Contract Acl, 1872 and the same is as under: ''126. "Contract of guarantee", "surety", "principal dcbtor" and "creditor".-A "contract of guarantee" is a contract to perform the promise. or discharge the liability, of a thinl person in case ol his default. The person who gives the guarantee is called the "surety"; the person in respcct of whose default the guarantee is given is called the "principal debtor". and thc person to whom the guarantee is given is called the -'creditor". A guarantee ma1- be either oral or written." "128. Suretr's liabilit"v. The liability of the surety is co- cxtensivc willl thal of the principal debtor, unless it is otherwisc provided by the contract.'' "146, Co-sureties liable to contribute equally.--Where tu'o or rnore persons are co-sureties for the same debt or duty. eithcr jointly or severally, and whether under the same or dilferent contracts. and whether with or rvithout thc knorvledgc of each other. the co-sureties. in the absence ol any contract to thc contrar)'. are liable. as between themselves, to pay each an equal share tll'the whole debt. or ol that part of it which rcmains unpaid bl the principal debtor." o KL,J CRP No.4206 of2024

13. 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 down 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.r.

14. The aforesaid relevant provisions would reveal that for realization of the amount covered under the arbitration award, respondent No. I - decree holder has to file an application under Section - 36 of the Arbitration and Conciliation Act, 1996, and Order - XXI Rule l1 (2) of CPC. Accordingly, respondent No.1 had filed the aforesaid execution petition vide E'P.No- 183 of 2024.

15. In Punyamurthula Venkata Viswa Sundara Raor, the Division Bench on consideration of the contentons advanced by the parties, framed the following two (02) points for consideration: whether the decrce holder has to proceed against all the judgment debtors, who are guarantors, by claiming proportionate amount decreed. whether the execution Courts in which E.Ps. were filed against the present judgment debtors, who are revision '. 2Q{q) ALr 82 (D.8.) 12 KL.J ('RI'No.4206 of2024 I petitions herein. have jurisdiction to entertain the cxecution petitions.

16. On consideration of the provisions of the Chit Fund 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 lor execution, to be forwarded to the proper authority at the option of the decree holder and the Registrar shall himsclf issue the certificate and lorward the said application to the Court or revenue authority, as chosen by the decree holder. The decree holder lias an option to proceed against either the principal debtor or any of the guarantors or against all of them. Referring to Section - 128 ol the Indian Contract Act, the Division Bench held thar the liability of, a surety is co-extensive with that of the principal debtor unless it is otherwise provided by the contract.

17. ln Madamanchi Anill Kumar v. Margadarshi Chit Fund Pvt. Limited,' Dirisior., 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 '. c.R.P NO.2ll8 0ll0lE. <iecided on 05.1l.20lE l3 Kt_.J. CRP No.4206 of2024 the 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 Rules,2008 and that an execution is maintainable only if the recovery certificate has been issued by the Registrar of Chits to the competent Civil Court.

18. On consideration of the aforesaid provisions and on examination of the facts of the case therein, in prattipati Srinivasa Rao v. M/s. Shriram City Union Finance Limiteds, this Court held that respondent No.l decree-holder cannot recover double the awarded amount from the petitioners - judgment debtors, and it is entitled for the decretal amount and interest as claimed by it from the judgment debtors.

19. As discussed above, the Award was passed for recovery of Rs.6,39,125l- along with interest @ 18% per annum on the principal amount of Rs.5,24,759l-, and the petitioner and respondent Nos.2 to 6 herein are jointly and severally liabte to pay the said amount. Respondent No. I - decree holder has filed the aforesaid execution I\Common Order in CRP Nos.l13 & t5t of 2O2i, decided on 02.03.2023 t4 XI,.J CItP No ,1206 of2024 petition against judgrnent debtor Nos.3 to 6 to recover the aforesaid amount of Rs.9,49,273l- each from their salaries. Without considering the aforesaid aspects, more particularly, Sections - 128 and 146 of the provisions of the Indian Contract Ac and Section -71 of the Chit Fund Act and also the principle laid down in Punyamurthula Venkata Viswa Sundara Raor, Madamanchi Anitl Kumar2 and Prattipati Srinivasa Raor, the Executing Court issued the impugned salary attachment order dated 09.07.2024 in E.P. No. 183 of 2024. The Executing Court also issued similar salary attachment orders to the Disbursing Officers of other judgment debtor Nos.5 and 6/J.Ds.5 and

6. Thus, by virtue of the said salary attachment, there would be recovery of an amount of Rs.28,47,2731-(three times of the awarded amount) from the petitioner herein and respondent Nos.5 and 6 which is impermissible under law. The same is in violation of the procedure laid down under Contract Act, Chit Fund Act, 1872 and also the principle laid down by this Court in CRP No.2660 of 2024 dated

18.10.2024. The said aspects were not considered by the Executing Court while passing the impugned order dated 09.(17.2024 in E.P. No. 183 of 2024. Therefbre. the said order is liable to be set aside l5 KL.J CRP No a 206 of2024

20. The present Civil Revision Petition is accordingly allowed. The impugned order dated 09.07.2024 in E.P. No. 183 of 2023 in ARB No.365 of 2021 passed by leamed I Additional Junior Civil Judge, at Khrimnagar, is set aside. The matter is remanded back to the Executing Court with a direction to consider the said E.P. No. 183 of 2023 in ARB No.365 of 2021 afresh and pass appropriate orders in accordance with law including the aforesaid provisions and principle laid down by this Court. In the circumstances of the case, there shall be no order as to costs. As a sequel tf;ereto, miscellaneous petitions, if any, pending in this revision shall stand closed. //TRUE COPY// Sd/- MOHD. ISMAIL ASSISTANT REGISTRAR I CTION OFFICER To,

1. The I Additional Junior Civil Judge at Karimnagar' 2. One CC to Sri. V Yadu Krishna Sainath Advocate [OPUC] 3. One CC to Sri. K P Vijay Kumar, Advocate [OPUC] 4. Two CD Copies. PM/gh g 1 HIGH COURT DATED:0710212025 ORDER CRP.No.4206 of 2024 /6 ,u^ ) 01 ffAB 2025 {,' D1 . ^.,; O ALLOWING THE CIVIL REVISION PETITION @q"' %ft