Telangana High Court
Sri. Awari Amarender vs M/S Shriram City Union Finance on 14 August, 2024
Author: K. Lakshman
Bench: K. Lakshman
IN THE HIGH COURT FOR THE STATE OF TELANGANA
AT: HYDERABAD
CORAM:
* HON'BLE SRI JUSTICE K. LAKSHMAN
+ CIVIL REVISION PETITION No.1616 OF 2024
% Delivered on: 14-08-2024
Between:
# Awari Amarender .. Petitioner
Vs.
$ M/s. Shriram City Union Finance, Karimnagar-I
Branch & another .. Respondents
! For Petitioner : Mr. P. Venkanna
^ For Respondent No.1 : Mr. N. Srikanth Goud
For Respondent No.2 : ---
< Gist :
> Head Note :
? Cases Referred :
1. 2016 (2) ALD 10 (DB)
2. 2017 (3) ALT 82 (D.B.)
3. C.R.P. No.2338 of 2018, decided on 05.11.2018
2
KL,J
CRP No.1616 of 2024
HON'BLE SRI JUSTICE K. LAKSHMAN
CIVIL REVISION PETITION No.1616 OF 2024
ORDER:
Heard Mr. P. Venkanna, learned counsel for the petitioner and
Mr. N. Srikanth Goud, learned counsel for respondent No.1. It is
mentioned in the cause title that respondent No.2 is not necessary to
the present revision.
2. This revision is filed under Section - 115 of the Code of
Civil Procedure, 1908 (hereinafter referred to as 'CPC'), challenging
the attachment order dated 21.03.2024 in ARB E.P. No.410 of 2019 in
ARB Case No.600 of 2012 passed by learned II Additional District
Judge at Karimnagar.
3. Respondent No.1 filed an Arbitration Application vide ARB
Case No.600 of 2012 against the petitioner and respondent No.2
herein. The Arbitrator passed an Award dated 27.04.2013 in ARB
Case No.600 of 2012 holding that the petitioner and respondent No.2
herein are due and liable to pay an amount of Rs.1,50,201/- along with
interest @ 18% per annum thereon. The said amount is not paid.
Therefore, respondent No.1 herein has filed an execution petition
under Section - 36 of the Arbitration and Conciliation Act, 1996 (for
KL,J
short 'Act, 1996') read with Order - XXI, Rule - 11 (2) of the CPC,
vide E.P. No.410 of 2019 in ARB Case No.600 of 2012 against the
petitioner herein - Judgment Debtor No.2 alone, to recovery an
amount of Rs.3,36,889/-. Vide order dated 21.03.2024, learned II
Additional District Judge, Karimnagar, issued order of attachment in
Form No.19 directing the Disbursing Officer of the petitioner to
withhold an amount of Rs.3,36,889/- from the salary of the petitioner
and remit the same to the said Court. Challenging the said order, the
petitioner herein filed the present revision on the following grounds:
i. Execution Petition is filed for realization of Rs.3,36,889/-,
therefore, it has to be filed before the Junior Civil Judge,
Karimnagar, which has pecuniary jurisdiction and not the
District Judge. Therefore, learned II Additional District Judge,
Karimnagar has no power to entertain the E.P. and pass order of
attachment;
ii. The impugned order of attachment was issued without
following the procedure laid down under Order - XXI, Rule -
48 of the CPC;
iii. Respondent No.1 - Decree Holder cannot recovery entire
decretal amount from the salary of the petitioner and it has to
KL,J
recovery proportionately from the petitioner and respondent
No.2 herein;
iv. The Executing Court failed to consider compliance of Section -
31 (5) of the Act, 1996; and
v. Without giving any opportunity, the Executing Court passed the
impugned order.
4. On the other hand, learned counsel for respondent No.1
would contend that as per the law, respondent No.1 being the decree-
holder can recover decretal amount either from the petitioner alone or
from the judgment debtors proportionately. Therefore, respondent
No.1 has filed the above E.P. to realize the decretal amount from the
petitioner - judgment debtor No.2, and on consideration of the same
only, learned Executing Court issued the order of attachment and there
is no error in it.
5. In the light of the aforesaid rival contentions, it is apposite to
extract Section - 2 (1) (e) of the Act, 1996 and the same is as under:
"2 (1) (e) Court" means--
(i) in the case of an arbitration other than
international commercial arbitration, the
principal Civil Court of original
jurisdiction in a district, and includes the
High Court in exercise of its ordinary
KL,J
original civil jurisdiction, having
jurisdiction to decide the questions
forming the subject-matter of the
arbitration if the same had been the
subject matter of a suit, but does not
include any Civil Court of a grade
inferior to such principal Civil Court, or
any Court of Small Causes."
6. In Potlabathuni Srikanth v. Shriram City Union Finance
Limited 1, a Division Bench of High Court for the States of Telangana
and Andhra Pradesh at Hyderabad held that OP to be filed in District
Court only and Court of Principal District Judge includes Additional
District Judge.
7. Perusal of record would reveal that respondent No.1 - decree
holder filed the aforesaid Execution Petition under Section - 36 of the
Act, 1996 before the Principal District Judge and the same was made
over to learned II Additional District Judge, Karimnagar, which in
turn, passed the impugned order of attachment. In view of the same,
the contention of learned counsel for the petitioner that execution
petition filed by respondent No.1 - decree holder before the Principal
District Judge is not maintainable is unsustainable.
. 2016 (2) ALD 10 (DB)
KL,J
8. 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 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:
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
KL,J
for grant of stay of a money decree under the provisions of
the Code of Civil Procedure, 1908 (5 of 1908)."
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."
10. Thus, the liability of co-surety is co-extensive with that of
principal debtor unless it is otherwise provided by the contract. The
KL,J
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. 2.
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 herein had
filed the aforesaid execution petition vide E.P.No.410 of 2019 seeking
attachment of salary of the petitioner - judgment debtor No.2 alone.
12. In Punyamurthula Venkata Viswa Sundara Rao2, 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.
ii. whether the execution Courts in which E.Ps. were filed
against the present judgment debtors, who are revision
. 2017 (3) ALT 82 (D.B.)
KL,J
petitions herein, have jurisdiction to entertain the
execution petitions.
13. On consideration of the provisions of the A.P. Chit Fund
Act, 2008 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,3 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 Rao2, held that
liability of the sureties is joint and several. The Division Bench also
. C.R.P. No.2338 of 2018, decided on 05.11.2018
KL,J
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. In view of the above discussion and the legal principle
enunciated in the aforesaid judgments, the Arbitrator has passed the
Award dated 27.04.2013 in Arbitration Case No.600 of 2012 holding
both the petitioner and respondent No.2 herein are jointly and
severally liable to pay the decretal amount. As per Section - 128 of
the Contract Act, respondent No.1 herein - decree holder can realize
the said amount either from the petitioner herein - judgment debtor
No.2 or from respondent No.2 - judgment debtor No.1 or from both.
Therefore, the petitioner herein cannot contend that respondent No.1 -
decree holder has to recover the decretal amount proportionately from
the petitioner and respondent No.2 herein. The same is contrary to
the provisions of the Contract Act, more particularly Section - 128 of
the Contract Act and the principle laid down in the aforesaid
judgments. Thus, on both grounds, the petitioner failed to make out
KL,J
any case to interfere with the impugned order of attachment. The
present revision fails and the same is liable to be dismissed.
16. The present Civil Revision Petition is accordingly
dismissed. 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
14th August, 2024
Note: L.R. copy be marked.
(B/O.) Mgr
