Karnataka High Court
M/S Margadarsi Chits (Kar) Pvt Ltd vs Mr C N Narasimha Reddy on 13 November, 2025
-1-
NC: 2025:KHC:46325
WP No. 6148 of 2020
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 13TH DAY OF NOVEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE E.S.INDIRESH
WRIT PETITION NO. 6148 OF 2020 (GM-CFA)
BETWEEN:
M/S MARGADARSI CHITS (KAR) PVT. LTD.,
HONNA KAMALA CREST, 2ND FLOOR,
GENERAL KARIYAPPA MAIN ROAD,
TUMAKURU - 572 101
REP BY ITS VICE PRESIDENT/GENERAL MANAGER,
SRI. P LAKSHMANA RAO
...PETITIONER
(BY SRI. JAYAKUMARA P.P, ADVOCATE)
AND:
1. MR. C.N. NARASIMHA REDDY
S/O CHIKKANARAYANAPPA,
S.L.E.S. GROUP OF INSTITUTION,
NEAR RAILWAY TRACK,
Digitally signed by CHELUR ROAD,
ARUNKUMAR M S
Location: HIGH
CHINTAMANI - 563 125.
COURT OF
KARNATAKA 2. THE JOINT REGISTRAR OF CO-OPERATIVE
SOCIETIES AND CHITS,
CHAMARAJPET,
BENGALURU
3. THE DEPUTY REGISTRAR OF CHITS
TUMAKURU DISTRICT
TUMAKURU
...RESPONDENTS
(BY SRI. V. VISHWANATH SHETTY, ADVOCATE FOR R1;
SRI. MAHANTESH SHETTAR, ADVOCATE FOR R2 AND R3)
-2-
NC: 2025:KHC:46325
WP No. 6148 of 2020
HC-KAR
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA TO QUASH THE IMPUGNED
ORDER DATED 07.12.2019 PASSED BY THE JOINT REGISTRAR
OF CO-OPERATIVE SOCIETIES AND JOINT REGISTRAR OF
CHITS, BANGALORE ZONE, AT BANGALORE IN CHITS APPEAL
ANNEXURE-A AND ETC.,
THIS PETITION, COMING ON FOR PRELIMINARY HEARING
IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS
UNDER:
CORAM: HON'BLE MR. JUSTICE E.S.INDIRESH
ORAL ORDER
1. In this writ petition, the petitioner is assailing the
order dated 07.12.2019 (Annexure-A) passed by
respondent No.2 and the order dated 15.07.2017
(Annexure - B) passed by respondent No.3.
2. The facts in nutshell for the purpose of adjudication
of this petition are that; the petitioner entity is having a
business of promoting and conducting chits as per the
provisions contained under the Chit Funds Act, 1982
(hereinafter referred to as 'the Act'). It is further stated
that one Sri.J.S.Shankar Raju and one Sri.K.V.Ananda
Gowda had availed loan to an extent of Rs.30,00,000/-
and for the security of the same, respondent No.1 herein
NC: 2025:KHC:46325
HC-KAR
along with five others have entered into an Agreement of
Guarantee as per Annexures - G and H to the writ petition.
In view of default on the part of the principal borrower,
the petitioner herein has initiated the proceedings against
the respondent No.1 under the Act. In this regard,
respondent No.1 herein has approached respondent No.3
in Dispute No.DRT/CFS/20/2016-17 and the said petition
came to be disposed of on 15.07.2017 (Annexure-B).
Feeling aggrieved by the same, the petitioner herein has
preferred an appeal before respondent No.2 in Appeal
No.JRB/Chits/Appeal/15/2017-18 and the said appeal
came to be dismissed on 07.12.2019 (Annexure - A).
Feeling aggrieved by the same, the petitioner has
presented this writ petition.
3. Heard Sri.Jayakumara P.P, learned counsel appearing
for the petitioner and Sri.V.Vishwanath Shetty, learned
counsel appearing for respondent No.1 and Sri.Mahantesh
Shettar, learned Additional Government Advocate
appearing for respondent Nos.2 and 3.
NC: 2025:KHC:46325
HC-KAR
4. It is argued by learned counsel appearing for the
petitioner by referring to Section 128 of the Contract Act,
and submitted that, respondent No.1 being a surety to the
chits raised by the original borrowers - Sri.J.S.Shankar
Raju and Sri.K.V.Ananda Gowda is liable to satisfy the
claim made by the petitioner herein and accordingly,
sought for interference of this Court.
5. Per contra, Sri.V.Vishwanath Shetty, learned counsel
appearing for respondent No.1 submitted that, an extent
of Rs.11,25,636/- is held up with the petitioner chits and
there is no impediment for the petitioner to deduct the
share of the respondent No.1 to an extent of
Rs.3,06,873/- and to release the remaining amount of
Rs.8,18,763/- with interest in favour of respondent No.1.
Further, it is argued by referring to the judgment of the
Hon'ble Supreme Court in case of Ram Kishun and
Others Vs. State of Uttar Pradesh and Others
reported in (2012) 11 SCC 511 that, the liability be
NC: 2025:KHC:46325
HC-KAR
equally apportioned on all the co-sureties unless an
agreement of contract provides otherwise and accordingly,
he sought for dismissal of the petition.
6. In the light of the submissions made by the learned
counsel for the parties, it is not in dispute that one
Sri.J.S.Shankar Raju and Sri.K.V.Ananda Gowda had
availed chit from the petitioner herein, for which,
respondent No.1 along with five others have entered into
an Agreement of Guarantee as per Annexures - G and H,
to the writ petition. However, the petitioner has resorted
for recovery against respondent No.1 and it appears that
they have not taken steps in respect of the original
borrowers - Sri.J.S.Shankar Raju and Sri.K.V.Ananda
Gowda as well as the other co-sureties as per Annexures -
G and H respectively. In that view of the matter, as
respondent No.1 has fairly submitted that after deduction
of his share in respect of the claim made by the petitioner
and thereafter, following the judgment of the Hon'ble
NC: 2025:KHC:46325
HC-KAR
Supreme Court in the above case, the liability be equally
extended to all the co-sureties by the petitioner herein.
7. In that view of the matter, I do not find any merit in
the writ petition as respondent No.2 after considering the
material on record and the facts has rightly dismissed the
appeal preferred by the petitioner herein. Accordingly, the
writ petition is dismissed.
8. However, there is no impediment for the petitioner to
make a claim against the remaining sureties as well as the
original borrower, if so advised.
SD/-
(E.S.INDIRESH)
JUDGE
GH
