Telangana High Court
Arepally Vijaya vs M/S. Shriram Chits Private Limited. on 11 September, 2025
Author: N. Tukaramji
Bench: N. Tukaramji
THE HON'BLE SRI JUSTICE N. TUKARAMJI
CIVIL REVISION PETITION No.2830 OF 2025
ORDER:
This Revision has been filed challenging the decree and
order dated 10.04.2025 in E.P. No.286 of 2021 in Arb. No.4 of
2020 on the file of I Additional Junior Civil Judge-cum-I
Additional Judicial Magistrate of I Class, Kaimnagar.
2. I have heard Sri Papaiah Peddakula, learned Counsel for
the petitioner and Sri K.S. Sai Pavan, learned Counsel for
respondents.
3. Briefly stated, the relevant facts are that Respondent
No.1/Decree Holder in Arb. No.4 of 2020 instituted E.P. No.286
of 2021 against the petitioner and three others seeking
attachment of salary to realize the arbitral award. The factual
background reveals that Respondent No.1 had advanced a chit
amount under a joint garnishee bond dated 07.07.2017,
wherein Respondent No.3 was the principal borrower, while
Petitioner and Respondent Nos.1 and 4 to 6 stood as sureties.
As the principal borrower (Respondent No.3) defaulted in
payment of instalments, Respondent No.1 invoked arbitration
before the Deputy Registrar of Chits, Karimnagar. By an award
dated 18.01.2021, the Arbitrator decreed recovery of
Rs.9,95,000/- along with interest at 18% per annum on the
principal sum of Rs.9,00,000/- until realization, jointly and
severally against the petitioner and Respondent Nos.3 to 5.
Based on this award, Respondent No.1, as decree holder,
initiated execution proceedings against the sureties, whereupon
the executing Court issued salary attachment warrant against
the petitioner under the impugned order. Aggrieved, the
petitioner preferred the present revision.
4. Learned counsel for the petitioner contends that the
execution proceedings are vitiated by non-compliance with the
mandatory procedure under Section 7A read with Rule 55 of the
Chit Funds Act, 1982. It is urged that, as per law, the arbitral
award must be transmitted by the Arbitrator to the competent
executing Court, and not initiated directly by the decree holder.
Reliance is placed on the Division Bench ruling in
Punyamurthula Venkata Viswa Sundara Rao v. Margadarsi Chit
Fund Pvt. Ltd., (2017) 3 ALD 387 (DB), which held that
execution proceedings initiated solely at the behest of the decree
holder are contrary to the statutory mandate. Further, it is
argued that the executing Court erred in directing recovery of
the entire decretal amount exclusively from the petitioner,
overlooking the settled principle that liability under a joint and
several award must be apportioned across all judgment debtors.
He emphasized that it is settled position that, execution cannot
be enforced against one guarantor in isolation when the liability
attaches equally to all sureties and the principal borrower.
Moreover, the petitioner contends that, despite Respondent No.1
having filed execution against all judgment debtors, the
executing Court issued a warrant of attachment only against the
petitioner, rendering the order arbitrary and unsustainable.
5. In reply, learned counsel for Respondent No.1 submits
that the arbitral award was passed on merits and in strict
compliance with statutory procedure. The Deputy Registrar of
Chits issued a recovery certificate, and the execution petition
was accordingly filed before the competent Court. It is further
argued that the reliance placed by the petitioner on
Punyamurthula Venkata Viswa Sundara Rao (supra) is
misplaced, as the said judgment has been declared per incuriam
by a Division Bench of this Court in Madamanchi Anil Kumar v.
Margadarsi Chit Fund Pvt. Ltd., CRP No.2338 of 2018, decided
on 05.11.2018. The same position was reiterated in Shakeel
Mohammad v. M/s. Kanakadurga Chit Funds Pvt. Ltd., CRP
No.2876 of 2024, decided on 17.12.2024, where the Court
upheld execution initiated upon a recovery certificate. It is also
urged that the Hon'ble Supreme Court has categorically held
that the executing Court lacks authority to "pick and choose"
among judgment debtors or to restrict recovery to particular
individuals, given that liability under such awards is joint and
several. The contention that execution has been directed only
against the petitioner is unfounded, as records from the e-
Courts portal establish that warrants of salary attachment were
indeed issued against all judgment debtors, i.e., Respondent
Nos.2 to 5. Consequently, it is submitted that the impugned
order is legally sustainable and the revision is devoid of merit.
6. I have perused the materials on record.
7. The contention of the petitioner against the impugned
order is threefold: first, that the execution petition was
instituted without compliance with the procedure mandated
under Section 71 of the Chit Funds Act, 1982 and Rule 55, the
Rules framed thereunder; secondly, that the attachment
warrant was erroneously issued for the entire decretal amount,
though all sureties are equally liable to contribute; and thirdly,
that the executing Court issued an attachment warrant solely
against the petitioner, ignoring the other judgment debtors,
despite the execution petition having been filed against all of
them.
8. With respect to the first contention, Respondent No.1 has
placed on record a letter issued by the Deputy Registrar of
Chits, Karimnagar, dated 29.09.2021, addressed to the Junior
Civil Judge, Karimnagar. This communication expressly refers
to the issuance of a recovery certificate under Section 71A of the
Chit Funds Act, 1982, read with Rule 55(2) of the Chit Funds
Rules, 2008, in Arbitration No.4 of 2020. The said recovery
certificate was forwarded along with the application filed by
Respondent No.1 for execution. The existence of this document
demonstrates compliance with the statutory procedure.
Therefore, the petitioner's argument that the execution petition
lacks legal foundation on account of procedural non-compliance
is untenable and devoid of merit.
9. Turning to the second contention, it is argued that the
attachment warrant should have been confined only to the
petitioner's proportional share of liability as a surety. Section
147 of the Indian Contract Act, 1872 does indeed contemplate
that, as between themselves, co-sureties are liable to contribute
equally towards the satisfaction of the debt. However, the
arbitral award in the present case clearly declares the liability of
the petitioner as joint and several along with the other judgment
debtors, including the principal borrower. The principle of joint
and several liability, firmly embedded in Indian contract
jurisprudence, empowers the decree holder to proceed against
any one or more of the judgment debtors for realization of the
entire decretal amount, leaving it to the judgment debtors to
adjust their inter se liabilities thereafter. Therefore the
apprehension expressed by the petitioner that attachment of the
entire decretal sum from a single surety would result in
prejudice is misplaced.
10. Further, under Section 60 of the Code of Civil Procedure,
1908, any amounts recovered from different judgment debtors
are ultimately appropriated towards satisfaction of the decretal
dues. Should any surety discharge more than his equitable
share of liability, the principle of subrogation enables him to
seek contribution from his co-sureties for any excess paid
beyond his legal liability. This settled position of law ensures
adequate protection of a surety's rights without imposing
unwarranted restrictions on the decree holder's entitlement to
execute the award. Hence, the contention that the attachment
warrant should be confined only to the petitioner's share cannot
be sustained at this stage of execution proceedings.
11. As regards the third contention, namely, that the salary
attachment warrant was issued only against the petitioner, this
argument is equally baseless. The proceedings sheet of the
executing Court dated 10.04.2025 indicates that attachment
reports in respect of Judgment Debtor Nos.2 and 4, including
the petitioner, were awaited, while fresh salary attachment
orders were simultaneously issued against Judgment Debtor
Nos.3 and 5. This documentary record establishes that the
executing Court has, in fact, proceeded uniformly against all
judgment debtors, and not selectively against the petitioner as
alleged.
12. In view of the foregoing discussion, the contentions
advanced by the petitioner fail to disclose any tenable ground
warranting interference with the impugned execution
proceedings. Accordingly, this Civil Revision Petition is
dismissed. No order as to costs.
Miscellaneous petitions, if any, pending in the Petition,
shall stand closed.
_________________
N. TUKARAMJI, J
Date: 11.09.2025
MRKR
