Telangana High Court

Kanolla Shravan vs M/S. Shriram Chits India Pvt. Ltd. on 21 March, 2025

Author: K. Lakshman

Bench: K. Lakshman

         HON'BLE SRI JUSTICE K. LAKSHMAN

      CIVIL REVISION PETITION No.939 of 2025

ORDER:

Heard learned counsel for the petitioner and

Sri K.S.Sai Pavan, learned counsel for the respondent

No.1. Perused the record.

2. This Civil Revision Petition is filed under Section

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

07.11.2023 in E.P.No.322 of 2022 in ARB.No.1093 of

2021 passed by the IV Additional Junior Civil Judge

(Excise) at Karimnagar.

3. Respondent No.3 is the subscriber of the Chit with

respondent No.1. Petitioner and Respondent Nos.4 to 7

are the guarantors to the said Chit Funds. Respondent

No.1 has filed an application under Section 64 of the Chit

Funds Act, 1982 (for short 'the Act, 1982') vide

ARB.No.1093 of 2021 before the Chit Arbitrator/ Deputy

Registrar of Chits, Karimnagar, claiming an amount of

Rs.15,46,682/- along with interest. Learned Chit KL,J

Arbitrator has passed an award, dated 04.08.2022

holding that the petitioner and respondent Nos.3 to 7 are

jointly and severally liable to pay the said amount i.e.,

Rs.15,46,682/- with interest @ 18% p.a. on the principal

amount of Rs.13,99,260/- from the date of filing of the

dispute till the date of realization of the said amount.

4. Thereafter, respondent No.1 has filed an execution

petition vide E.P.No.322 of 2022 in ARB No.1093 of 2021

under Order XXI Rule 11 of C.P.C for execution of the

said award. Vide impugned salary attachment order,

dated 07.11.2023, the Executing Court directed the

Salary Disbursement Officer of the petitioner/J.Dr.No.2

to withheld an amount of Rs.18,43,130/- from the salary

of the petitioner and remit to the account of the aforesaid

Execution Petition of the Executing Court. Challenging

the said attachment order, the petitioner filed present

Civil Revision Petition.

5. It is relevant to extract Order - XXI, Rules - 11 (2) and

48 of the CPC and the same is as under:

KL,J

"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;

(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-

KL,J

(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,-

KL,J

(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 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-

KL,J

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 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;

KL,J

(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."

6. 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 years from the date fixed in the order, and if no such date is fixed, from the date of the order."

KL,J

7. 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 KL,J

of the whole debt, or of that part of it which remains unpaid by the principal debtor."

8. 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.

9. 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 Order - XXI Rule 11 (2) of CPC.

Accordingly, respondent No.1 had filed the aforesaid

execution petition vide E.P.No.322 of 2022.

10. In Punyamurthula Venkata Viswa Sundara Rao (1

supra), the Division Bench of this Court on consideration

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

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 petitions herein, have jurisdiction to entertain the execution petitions.

11. 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 KL,J

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.

12. 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

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.

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

13. On consideration of the aforesaid provisions and on

examination of the facts of the case therein, in Sri Bandi

Chandra Hari3, this Court held that the decree-holder

cannot recover double or more the awarded amount from

the judgment debtors, and it is entitled for the decretal

amount and interest and costs awarded by the Chit

Arbitrator/Deputy Registrar of Chits.

14. As discussed supra, respondent No.1 had filed the

said execution petition to recover the awarded amount

form J.Dr.Nos.2 and 3.

15. As discussed supra, learned Executing Court has

issued impugned salary attachment order, dated

07.11.2023 directing disbursing Officer of

petitioner/J.D.R.No.2 to withhold the entire amount

covered under the said award and remit the said amount

to the account of the Executing Court. Thus, virtually,

the Executing Court is recovering the total awarded

amount from the petitioner only though the Execution

C.R.P.No.1237 of 2024, decided on 03.05.2024 KL,J

Petition was filed against J.Dr.Nos.2 and 3. The same is

impermissible. The same is in violation of the procedure

laid down under the Contract Act, Chit Funds Act and

also the principle laid down by this Court in the aforesaid

Judgments. Therefore, the impugned order is liable to be

set aside and it is accordingly set aside.

16. 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 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]].