Telangana High Court

Kolipaka Sai Kumar vs Kapil Chilts Kakatiya Pvt. Ltd, on 17 March, 2025

Author: K. Lakshman

Bench: K. Lakshman

       HON'BLE SRI JUSTICE K. LAKSHMAN

     CIVIL REVISION PETITION No.514 of 2025

ORDER:

Heard Sri Rajesh Bathula, learned counsel for the

petitioners and Sri K.P.Vijay Kumar Goud, learned

counsel for the respondent No.1. Perused the record.

2. This Civil Revision Petition is filed under Section

115 of the C.P.C. challenging the attachment order,

dated 20.12.2024 passed in E.P.No.373 of 2024 in

ARB.No.1062 of 2021 by the learned Principal Junior

Civil Judge, Karimnagar.

3. The petitioners herein are J.Dr.Nos.2, 3, 6 & 7 in

E.P.No.373 of 2024 in ARB.No.1062 of 2021 pending

on the file of learned Principal Junior Civil Judge,

Karimnagar. Respondent No.1 has filed an application

under Section 64 of the Chit Fund Act, 1982 vide

ARB.No.1062 of 2021 before the Chit

Arbitrator/Deputy Registrar of Chits, Karimnagar,

claiming an amount of Rs.4,69,913/- along with

interest @ Rs.18% p.a on the principal amount of KL,J

Rs.3,64,172/- from petitioners and respondent Nos. 2

to 4. The Chit Arbitrator has passed an award, dated

30.05.2023 holding that the petitioners and respondent

Nos. 2 to 4 herein are jointly and severally liable to pay

the said amount.

4. Thereafter, respondent No.1 has filed E.P.No.373

of 2024 in ARB.No.1062 of 2021 for execution of the

said award. Vide impugned salary attachment order,

dated 20.12.2024, the Executing Court directed the

Salary Disbursement Officers of J.Dr.Nos.3 & 6 to

withhold an amount of Rs.3,00,323/- each from the

salary of J.Dr.Nos.3 & 6 as per Section 60 of C.P.C.

after deducting standard deduction plus one thousand

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. Challenging the said attachment

order dated 20.12.2024, the petitioners herein filed the

present revision.

5. Learned counsel for the petitioners contended

that the Executing Court has issued similar salary KL,J

attachment orders in respect of other J.Drs. Therefore,

the same is in violation of the procedure laid down

under the Contract Act, Chit Funds Act, 1982 and also

the principle laid down by this Court vide order, dated

03.05.2024 in C.R.P.No.1237 of 2024.

6. Whereas, Sri K.P. Vijay Goud, learned counsel for

respondent No.1 fairly submitted that the impugned

salary attachment order, dated 20.12.2024 issued by

the Executing Court against J.Dr.Nos.3 & 6 is contrary

to the procedure laid down under the Contract Act,

Chit Funds Act and also the principle laid down by this

Court vide order, dated 03.05.2024 in C.R.P.No.1237

of 2024.

7. It is also relevant to extract Order - XXI, Rules -

11 (2) and 48 of the CPC and the same are 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-

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(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;

(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."

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"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 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 KL,J

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 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 KL,J

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."

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

(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 KL,J

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 coextensive 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 the co-surety is co-extensive

with that of principal debtor unless it is otherwise KL,J

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 - decree holder has to

file an application under Order - XXI Rule 11 (2) of

CPC. Accordingly, respondent No.1 had filed the

aforesaid execution petition vide E.P.No.299 of 2024.

12. In Punyamurthula Venkata Viswa Sundara Rao

(supra 1) the Division Bench on consideration of the

contentions 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,

2017 (3) ALT 82 (D.B) KL,J

who are revision petitioners 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. Limited2, Division Bench of the High

Court of Andhra Pradesh at Hyderabad considering the

C.R.P.No.2338 of 2018, decided on 05.11.2018 KL,J

said principle laid down by the Division Bench in

Punyamurthula Venkata Viswa Sundara Rao (supra),

held that 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.

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 Limited3 , this Court held that the

decree-holder cannot recover double the awarded

amount from the judgment debtors, and it is entitled

for the decreetal amount and interest as awarded by

the learned Chit Arbitrator.

Common order in CRP Nos.133 & 151 of 2023, decided on 02.03.2023 KL,J

16. As discussed above, learned Chit Arbitrator has

passed award, dated 30.05.2024 in ARB.No.1062 of

2021 holding that the petitioners and respondent Nos.2

to 4 are jointly and severally liable to pay the said

amount. Therefore respondent No.1 is entitled for

recovery of the aforesaid amount along with interest @

18% from all the J.Drs, including the petitioners

herein. Respondent No.1 filed the aforesaid execution

petition vide E.P.No.373 of 2024 for recovery of the said

amount from petitioners and respondent Nos.2 to 4.

Without considering the said facts, more particularly,

Sections 128 & 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 Rao (supra 1), Madamanchi

Anill Kumar (supra 2) and Prattipati Srinivasa Rao

(supra 3), the learned Executing Court has issued the

impugned salary attachment order, dated 20.12.2024

in E.P.No.373 of 2024, directing the Salary Disbursing

Officers of J.Dr.Nos.3 & 6 to withhold an amount of

Rs.3,00,323/- as stated supra. Thus, by virtue of the KL,J

said salary attachment orders, there would be recovery

of more than the awarded amount from the petitioners

herein (Rs.3,00,323 x 7= Rs.21,02,261), which is

impermissible under law. Therefore, the said

attachment order is in violation of the procedure laid

down under the Contract Act, the Chit Funds Act and

also the principle laid down by this Court vide order,

dated 03.05.2024 in C.R.P.No.1237 of 2024.

17. It is also relevant to note that Section 60 of

C.P.C. deals with the property liable to attachment and

sale in execution of decree. Section 60(i) and (ia) of

C.P.C. is relevant and the same are extracted

hereunder:

"i) salary to the extent of [the first [one thousand rupees]] and two third of the remainder] [in execution of any decree other than a decree for maintenance]:

[Provided that where any part of such portion of the salary as is liable to attachment has been under attachment, whether continuously or intermittently, for a total period of twenty-four months, such portion shall be exempt from attachment until the expiry of a further period of twelve months, and, where such attachment has been made in execution of one and the KL,J

same decree, shall, after the attachment has continued for a total period of twenty- four months, be finally exempt from attachment in execution of that decree]].