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Guarantor's Bid to Block Second Execution Fails: AP High Court Greenlights Parallel Pursuits
In a ruling that strengthens creditors' hands in recovering dues from multiple parties, the dismissed Civil Revision Petition (CRP) No. 808 of 2026. A bench comprising Hon’ble Sri Justice Ravi Nath Tilhari and Hon’ble Sri Justice Balaji Medamalli upheld the registration of a second execution petition (EP) against a guarantor, even as another EP targeting a borrower's property remains pending.
From Arbitration Award to Dual Debt Chases
The saga began with an arbitration award dated , in Case No. ASV/SF/123/2018, passed by arbitrator A.S. Velmurugan. secured a decree for Rs. 54,24,277.50 plus 18% interest from the due date, plus costs, against multiple respondents including principal borrowers and guarantors like petitioner Potturi Venkata Rama Vanaja (Judgment Debtor No. 5).
Sundaram Finance first filed EP No. 1329 of 2021 in the court of the , targeting property of Judgment Debtor No. 3 (a borrower), which is still pending. Undeterred, they launched EP No. 1003 of 2024 against Vanaja's property. This was registered on , and transferred to the —prompting Vanaja's CRP under challenging the move.
"Exhaust Borrower First": Guarantor's Core Plea
Vanaja's counsel, , argued the second EP was illegal. As a mere guarantor, she contended the decree holder must first exhaust remedies against the primarily liable borrowers via the pending first EP. Only if unsatisfied could they turn to sureties. Invoking , which governs enforcement of surety liability, they claimed it barred simultaneous or premature action against guarantors.
No Sequential Shackles: Court's Clear Stance
The bench disagreed, scrutinizing , which allows execution against a surety personally or via secured property after sufficient notice, treating them as parties under . Crucially, the court observed:
" does not create a bar for filing the execution petition for enforcement of liability of the surety by filing Execution Petition in addition to the filing of EP against the Borrower (J.Dr.). The pendency of the execution petition against the principal borrower is not a legal bar to proceed against the surety/guarantor."
Since Vanaja was a direct party to the arbitration award—jointly directed to pay—the court saw no need for sequential exhaustion. Parallel EPs against different judgment debtors under the same decree are permissible, especially at the mere registration stage. Vanaja retains rights to raise objections in the execution court.
This aligns with insights from legal reports noting,
"Pendency Of Execution Petition Against Judgment Debtor No Bar To Institute Other Execution Petitions Against Remaining Debtors: AP High Court."
Key Observations
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On joint liability
:
"The petitioner/guarantor was the party in the award proceedings and the award stands against him also. The direction under the award was to the respondents therein."
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No blanket prohibition
:
"Pendency of one execution petition against one of the Judgment debtors is not a bar to institute other execution petition against the remaining Judgment debtors."
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Procedural leeway
:
"In any case the execution petition has only been registered. The petitioner has the opportunity before the Execution Court to raise such valid objections as may be open to him under law."
CRP Dismissed: Open Season for Creditors?
The court dismissed the CRP on , with no costs, closing related petitions. No interference with registration was warranted.
This decision signals flexibility for decree holders enforcing arbitration awards against multiple obligors, potentially streamlining recoveries without forced sequencing. Guarantors must now brace for independent pursuits, bolstering efficiency in commercial debt enforcement while preserving execution court oversight for disputes.
