Telangana High Court
Bijili Thirupathi vs M/S. Shriram Chits Private Limited. on 9 August, 2024
Author: K. Lakshman
Bench: K. Lakshman
HON'BLE SRI JUSTICE K. LAKSHMAN
CIVIL REVISION PETITION No.2274 OF 2024
ORAL ORDER:
Heard Mr. Papaiah Peddakula, learned counsel for the
petitioners and Mr. N. Srikanth Goud, learned counsel for respondent
No.1. As per cause title, respondent No.6 is not necessary party,
while respondent Nos.2 to 5 are only the Disbursing Officers of the
petitioners and notices to them are dispensed with.
2. This revision is filed under Section - 115 of the CPC
challenging the order of attachment dated 21.03.2024 passed by
learned Principal Junior Civil Judge, Karimnagar in E.P. No.60 of
2024 in ARB No.899 of 2021.
3. On the application filed by respondent No.1, the
Arbitrator/Deputy Registrar of Chits, Karimnagar, had passed an
award dated 24.03.2023 for an amount of Rs.18,30,173/- with interest
@ 18% per annum on the principal amount of Rs.15,91,020/- against
the petitioners herein and respondent No.6 herein ARB No.899 of
2021. He has also held that respondent No.1 herein shall recover the
said amount by way of sale of movable and immovable properties
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belonging to them or by attachment of salaries or by any other mode
of execution as per law.
4. Respondent No.1 herein had filed an execution petition vide
E.P. No.60 of 2024 in ARB No.899 of 2021 seeking execution of the
said award against judgment debtor Nos.1 to 6 for recovery of
Rs.23,79,794/- from them. Vide order dated 21.03.2024, learned
Principal Junior Civil Judge, Karimnagar, directed the Disbursing
Officers of the petitioners to withhold the amount of Rs.23,79,794/-
each from the monthly salary of the petitioners herein. They are
judgment debtor Nos.2 to 5 in the said E.P. as per Section - 60 of CPC
after deducting standard deduction plus 1/3rd and 2/3rd of remaining
gross salary and shall remit the balance 1/3rd of salary every month
from the date of receipt of the warrant. The amount may be sent by
D.D or M.O.
5. The Executing Court should have directed the Disbursing
Officers of judgment debtor Nos.2 to 5 to deduct and recover the said
amount of Rs.23,79,794/- proportionately from their salaries instead
of directing to deduct the total amount from their salaries each. In
fact, the aforesaid execution petition was filed by respondent No.1 -
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decree-holder to execute the award for Rs.23,79,794/- from judgment
debtor Nos.2 to 5.
6. It is relevant to note that Section - 36 of the Arbitration and
Conciliation Act, 1996 deals with 'enforcement of award' and the
same is relevant for the purpose of considering the lis in the present
revisions and it is extracted below:
"Section 36:-Enforcement. --Where the time for making
an application to set aside the arbitral Award under section
34 has expired, or such application having been made, it
has been refused, the award shall be enforced under the
Code of Civil Procedure, 1908 (5 of 1908) in the same
manner as if it were a decree of the Court.
(2) Where an application to set aside the arbitral award has
been filed in the Court under section 34, the filing of such
an application shall not by itself render that award
unenforceable, unless the Court grants an order of stay of
the operation of the said arbitral award in accordance with
the provisions of sub-section (3), on a separate application
made for that purpose.
(3) Upon filing of an application under sub-section (2) for
stay of the operation of the arbitral award, the Court may,
subject to such conditions as it may deem fit, grant stay of
the operation of such award for reasons to be recorded in
writing:
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Provided that the Court shall, while considering the
application for grant of stay in the case of an arbitral award
for payment of money, have due regard to the provisions
for grant of stay of a money decree under the provisions of
the Code of Civil Procedure, 1908 (5 of 1908)."
7. It is also relevant to extract Order - XXI, Rules - 11 (2), 48
and 48A of the CPC and the same is as under:
"XXI Rule 11 (2) of CPC-Written application- Save as
otherwise provided by sub-rule(1), 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
of the Court to be acquainted with the facts of the case, and shall
contain in a tabular form the following particulars, namely-
(a) the number of the suit;
(b) the names of the parties;
(c) the date of the decree;
(d) whether any appeal has been preferred from the decree;
(e) 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;
(f) whether any, and (if any) what, previous applications have
been made for the execution of the decree, the dates 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 before or after the date of the
decree sought to be executed;
(h) the amount of the costs (if any) awarded;
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(i) the name of the person against whom execution of the decree
is sought; and
(j) the mode in which the assistance of the Court is required
whether-
(i) by the delivery of any property specifically decreed;
(ii) by the attachment, or by the attachment and sale, or by the
sale without attachment, of any property;
(iii)by the arrest and detention in prison of any person;
(iv) by the appointment of a receiver;
(v) otherwise, as the nature of the relief granted may require."
"Order XXI Rule 48 of CPC-Attachment of salary or
allowances of servant of the Government or railway
company or local authority.- (1) Where the property to be
attached is the salary or allowances of a servant of the
Government or of a servant of a railway company or local
authority or of a servant of a corporation engaged in any trade or
industry which is established by a Central, Provincial or State
Act, or a Government company as defined in section 617 of the
Companies Act, 1956 (1 of 1956)] the Court, whether the
judgment-debtor 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
notice of the order to such officer as the appropriate
Government may by notification in the Official Gazette appoint
in this behalf,-
(a) where such salary or allowances are to be disbursed
within the local limits to 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
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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 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 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 Government in this behalf shall
forthwith return 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, bind the appropriate Government
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 while he is beyond those limits, if he is in
receipt of any salary or allowances payable out of the
Consolidated Fund of India or the Consolidated Fund of the
State or the funds of a railway company or local authority or
corporation or Government company in India; and the
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appropriate Government or the railway company or local
authority or corporation or Government company, as the case
may be, shall be liable for any sum paid in contravention of this
rule.
Explanation.-In this rule, "appropriate Government"
means,-
(i) As respects any person in the service of the Central
Government, 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
Government company in which any part of the share capital is
held by the Central Government or by more than one State
Governments or partly by the Central Government and partly by
one or more State Governments, the Central Government;
(ii) As respects any other servant of the Government, or a
servant of any other local or other authority, or any servant of a
corporation engaged in any trade or industry which is
established by a Provincial or State act, or a servant of any other
Government company, the State Government."
"Order - XXI, Rule - 48A. Attachment of salary or
allowances of private employees.- (1) Where the property to be
attached is the salary or allowances of an employee other than
an employee to whom rule 48 applies, the Court, where the
disbursing officer of the employee is within the local limits of
the Court's jurisdiction, may order than the amount shall, 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
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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 attachment, the disbursing
officer shall forthwith return 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 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 of this rule."
8. It is also relevant to extract Section - 71 of the Chit Fund
Act, 1982 and the same is as under:
"71. Money 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 certificate issued by the 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
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(b) be executed in accordance with the provisions of any law for
the time being in force for the recovery of amounts as arrears of
land revenue: Provided that no application for execution under
clause (b) shall be made after the expiry of three years from the
date fixed in the order, and if no such date is fixed, from the date
of the order."
9. 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", "surety", "principal debtor"
and "creditor".--A "contract of guarantee" is a contract to
perform 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 default the
guarantee is given is called the "principal debtor", and the
person to whom the guarantee is given is called the "creditor". A
guarantee may be either oral or written."
"128. Surety's liability.--The liability of the surety is co-
extensive with that of the principal debtor, unless it is otherwise
provided by the contract."
"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."
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10. From the above, it thus becomes clear that liability of 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.1.
11. 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
Section - 36 of the Arbitration and Conciliation Act, 1996, and Order -
XXI Rule 11 (2) of CPC. Accordingly, respondent No.1 had filed the
aforesaid execution petition vide E.P.No.60 of 2024.
12. In Punyamurthula Venkata Viswa Sundara Rao1, the
Division Bench of this Court on consideration of the arguments
advanced by the parties, framed the following two (02) points for
consideration:
i. whether the decree holder has to proceed against all the
judgment debtors, who are guarantors, by claiming
proportionate amount decreed.
. 2017 (3) ALT 82 (D.B.)
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ii. whether the execution Courts in which E.Ps. were filed
against the present judgment debtors, who are revision
petitions herein, have jurisdiction to entertain the
execution petitions.
13. 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 for execution, to be forwarded to the proper authority at the
option of the decree holder and the Registrar shall himself issue the
certificate and forward the said application to the Court or revenue
authority, as chosen by the decree holder. The decree holder has an
option to proceed against either the principal debtor or any of the
guarantors or against all of them. Referring to Section - 128 of the
Indian Contract Act, the Division 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.
14. In Madamanchi Anill Kumar v. Margadarshi Chit Fund
Pvt. Limited, 2 a 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 Rao1, held that
. C.R.P. No.2338 of 2018, decided on 05.11.2018
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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.
15. 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 Limited 3, this Court held
that decree-holder cannot recover double the awarded amount from
the judgment debtors, and it is entitled for the decretal amount and
interest as claimed by it from the judgment debtors.
16. As discussed above, the amount awarded vide Award dated
24.03.2023 in ARB No.899 of 2021 is Rs.18,30,173/- along with
interest @ 18% per annum on the principal amount of Rs.15,91,020/-,
and the petitioners herein and respondent No.6 are jointly and
severally liable to pay the said amount. Respondent No.1 - decree
holder has filed the aforesaid execution petition against judgment
. Common Order in CRP Nos.133 & 151 of 2023, decided on 02.03.2023
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debtor Nos.2 to 5 to recover the aforesaid amount of Rs.23,79,794/-
each from their salaries. Without considering the aforesaid aspects,
more particularly, Sections - 128 and 146 of the provisions of the
Indian Contract Act and Section -71 of the Chit Fund Act and also the
principle laid down in Punyamurthula Venkata Viswa Sundara
Rao1, Madamanchi Anill Kumar2 and Prattipati Srinivasa Rao3,
the Executing Court issued the impugned salary attachment orders
dated 21.03.2024 in E.P. No.60 of 2024. Thus, by virtue of the said
salary attachments, there would be recovery of an amount of
Rs.23,79,794/- each from the salaries of judgment debtor Nos.2 to 5
which is impermissible under law. The said aspects were not
considered by the Executing Court while passing the impugned order
dated 21.03.2024 in E.P. No.60 of 2024. Therefore, the said order is
liable to be set aside.
17. The present Civil Revision Petition is accordingly allowed
setting aside the impugned order dated 21.03.2024 in E.P. No.60 of
2024 in ARB No.899 of 2021 passed by learned Principal Junior Civil
Judge, Karimnagar. The matter is remanded back to the Executing
Court with a direction to consider the said E.P. No.60 of 2024 afresh
and pass appropriate orders in accordance with law considering the
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aforesaid provisions and principle laid down by this Court within a
period of three (03) months from the date of receipt of copy of this
order. 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.
_________________
K. LAKSHMAN, J
9th August, 2024
Note:
Furnish C.C. of order by 12.08.2024
(B/O.) Mgr
