Telangana High Court

Janga Vimalakar vs M/S. Rao Brothers Chit Funds Private ... on 4 November, 2025

         THE HON'BLE JUSTICE B.R.MADHUSUDHAN RAO

                        CRP.NO.3752 OF 2023

ORDER

1. The Civil Revision Petition is filed under Article 227 of the

Constitution of India assailing the award and recovery certificate

passed in AA/CF/No.422 of 2021 dated 20.11.2021 by the Deputy

Registrar of Chits Warangal District at Hanamkonda.

2. Petitioners are opponent Nos.1 and 2 and respondent No.1 is

the disputant in AA/CF/No.422 of 2021 and respondent No.2 is the

Deputy Registrar of Chits.

3. It is stated in the cause title of the Civil Revision Petition that

respondent Nos.3 to 5 are not necessary parties to the petition.

4.1. Learned counsel for the petitioners submits that the award and

recovery certificate passed by the Deputy Registrar of Chits, Warangal

is erroneous in Law and against the material available on record.

Learned Registrar without issuing notice to the petitioners and giving

them an opportunity passed the award. Respondent No.2 failed to

follow the procedure enunciated under Rule 50 of A.P. Chit Funds

Rules, 2008. The award and recovery certificate issued is illegal.

4.2. Respondent No.1 now taking advantage of the ex parte award

and recovery certificate, initiated execution proceedings in E.P.No.42 2/9 BRMR,J CRP_3752_2023

of 2023 which is pending on the file of Principal Junior Civil Judge at

Mahabubabad. Respondent No.1 has not adduced any evidence with

regard to the amount claimed by them, award for Rs.2,27,600/- with

interest @ 18% per annum on the principal amount of Rs.2,01,377/- is

awarded from the date of filing till the date of realization with costs of

Rs.5,465/-.

4.3. The learned Deputy Registrar of Chits, Warangal has not

assigned any reasons as to how the said amounts are to be paid by the

petitioners - opponent Nos.1 and 2. In support of his contentions has

relied on the decision of this Court in Jogu Venkatamma Vs. Hamsika

Chit Funds Pvt. Ltd., 1.

5. Learned counsel for respondent No.1 submits that the

petitioners-opponent Nos.1 and 2 has a remedy under Section 70 of

the Chit Funds Act and the CRP is not maintainable, respondent No.2

has followed the procedure contemplated under Chit Fund Rules and

rightly passed the award and recovery certificate which does not

requires interference of this Court. In support of his contention, he

relied on the decisions in (1) Punjab National Bank Vs. O.C.Krishnan 2

(2) Mohammed Tajuddin Vs. Srinidhi Chits (Hyderabad) Private

CRP No.478 of 2024, dated 17.06.2025 of the High Court for the State of Telangana at Hyderabad

2001 6 SCC 569 3/9 BRMR,J CRP_3752_2023

Limited 3 (3) Sri G.Thimma Reddy Vs. M/s. Dhanwan Chit Fund Pvt.

Ltd 4.

6. Heard learned counsel on record, perused the material.

7. Now the point for consideration is : Whether the award and

recovery certificate passed by the Deputy Registrar of Chits, Warangal

District at Hanamkonda in AA/CF/No.422 of 2021 dated 20.11.2021

suffers from procedural defects? If so does it requires interference of

this Court?

8. The award dated 20.11.2021 goes to show that notice to

petitioner Nos.1 and 2-opponent Nos.1 and 2 is served as per postal

acknowledgment.

9. The Supreme Court in Kranti Associates Vs. Masood Ahmed

Khan 5, formulated certain principles which reads as under:

"(a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.

(b) A quasi-judicial authority must record reasons in support of its conclusions.

CRP No.1599 of 2025, dated 02.05.2025 of the High Court for the State of Telangana at Hyderabad

CRP No.652 of 2020, dated 02.02.2022 of the High Court for the State of Telangana at Hyderabad

(2010) 9 SCC 496 4/9 BRMR,J CRP_3752_2023

(c) Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.

(d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.

(e) Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations.

(f) Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies.

(g) Reasons facilitate the process of judicial review by superior courts.

(h) The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the life blood of judicial decision-making justifying the principle that reason is the soul of justice.

(i) Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system.

(j) Insistence on reason is a requirement for both judicial accountability and transparency.

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(k) If a judge or a quasi-judicial authority is not candid enough about his/her decision-making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.

(l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or 'rubber-stamp reasons' is not to be equated with a valid decision-making process.

(m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision-making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny (See David Shapiro in Defence of Judicial Candor (1987) 100 Harvard Law Review 731-737);

(n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision-making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See Ruiz Torija v. Spain (1994) 19 EHRR 553 at 562 para 29 and Anya v. University of Oxford [2001] EWCA Civ 405, wherein the court referred to article 6 of European Convention of Human Rights which requires, 'adequate and intelligent reasons must be given for judicial decision.'

(o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of 'due process'."

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10. In Aggarwal Dyeing and Printing Works Vs. State of Gujarat and

Others 6, has observed as under:

"At the outset, we notice that it is settled legal position of law that reasons are heart and soul of the order and non communication of same itself amounts to denial of reasonable opportunity of hearing, resulting in miscarriage of justice. This court is bound by the said judgments hereinafter referred to. The necessity of giving reason by a body or authority in support of its decision came for consideration before the Supreme Court in several cases. Initially, the Supreme Court recognized a sort of demarcation between administrative orders and quasi- judicial orders but with the passage of time the distinction between the two got blurred and thinned out and virtually reached a vanishing point in the judgment of the Supreme Court in A. K. Kralpak v. Union of India (1970) 1 SCR 45. The honourable Supreme Court vide judgments in the cases of Ravi Yashwant Bhoir v. District Collector Raigad (2012) 4 SCC 407, Sant Lal Gupta v. Modern Cooperative Group Housing Society Limited (2010) 13 SCC 336; Kranti Associates Private Limited v. Masood Ahmed Khan (2010) 9 SCC 496 and Abdul Ghaffar v. State of Bihar (2008) 3 SCC 258, has expanded the horizon of natural justice and reasons have been treated part of the natural justice. It has gone to the extent in holding that reasons are heart and soul of the order."

11. Jogu Venkatamma case1 has not dealt with Section 70 of the

Chit Funds Act, 1982.




    2022 SCC Online Guj 2530
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12. Learned counsel for respondent No.1 has placed reliance on

Section 70 of the Chit Funds Act, 1982 which reads as under:

"70. Appeal against decision of Registrar or nominee.--Any party aggrieved by any order passed by the Registrar or the nominee or the award of the Registrar or the nominee under section 69, may, within two months from the date of the order or award, appeal to the State Government".

13. In Punjab National Bank2, the Supreme Court observed at Para

No.6 which reads as under:

"6. The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There is a hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast-track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the Court under Articles 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act".

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14. In Mohammed Tajuddin3, the High Court observed that the

petitioner failed to make out any ground to maintain the present

revision despite availability of alternative remedy under Section 70 of

the Chit Funds Act, 1982 to challenge the award.

15. In G.Thimmareddy4, the High Court observed that the aggrieved

party against the order passed under Section 69 of the Chit Funds Act

is to prefer an Appeal to the State Government within two months

from the date of the order.

16. No reason could be assigned by the petitioner's counsel to

demonstrate why the jurisdiction of the High Court is invoked under

Article 227 of the Constitution of India when efficacious remedy under

Section 70 of the Chit Funds Act is provided. The decisions cited by

the respondent No.1 counsel are applicable to the case on hand.

17. The petitioners are relegated to prefer an appeal before the

State Government under Section 70 of the Chit Funds Act, 1982. If

such appeal is preferred within a period of 4 weeks from today the

same be entertained, decided and disposed of on merits without

raising an issue with respect to limitation subject to compliance of

statutory requirements. The State Government to decide and dispose

of the appeal and the issue without in any way being influenced by any

of the observations made by this Court.

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18. It is made clear that this Court has not expressed any opinion

on the merits of the case in favour of either of the parties.

19. The order pronounced in the CRP cannot be used as a binding

precedent in any other case in view of the peculiar facts and

circumstances of the case.

20. The Civil Revision Petition is disposed of granting liberty to the

petitioners to prefer an appeal before the appropriate Authority under

Section 70 of the Chit Funds Act, 1982 as indicated in the order

without costs.