Judgment Debtor No.4 is the petitioner in this C.R.P. The 1st respondent filed O.S. No. 4277 of 1997 on the file of the VI Junior Civil Judge, City Civil Court, Hyderabad, against the petitioner and respondents 2 to 4, for recovery of money, on the strength of a chit transaction between it and the 2nd respondent. Respondents 3 and 4 and the petitioner stood as guarantors. After the suit was decreed, and the decree became final, the 1st respondent filed E.P.No.28 of 2010, only against the petitioner, though rest of the judgment-debtors were also shown as parties. The petitioner filed counter opposing the E.P., by raising several grounds. The Executing Court allowed the same, through order, dated 25.04.2011. Hence, this revision.

Heard learned counsel for the petitioner and learned counsel for the 1st respondent.

It is no doubt true that a decree-holder has the option to proceed against any of the judgment debtors, including those, who figure as sureties. However, at least in the suits instituted by chit fund companies, a different approach is warranted. The transaction is mainly between the chit fund company, on the one hand, and the prized subscriber, on the other. It is incidental that the sureties are offered, on the prized money being paid. Independent of that, the chit fund company has its own documentation, vis-a-vis the subscriber.

In case the chit fund company is not able to recover the amount from the prized subscriber, it can certainly proceed against the sureties. However, the freedom to proceed against the sureties, without touching the prized subscriber is prone to be misused, leading to collusion to defraud otherwise innocent person, who offered himself as surety. Further, it is only when the prized subscriber is also added as a party in the E.P., that the surety against whom the decree-holder intends to proceed would be in a position to plead and prove the payments or adjustments, if any. In contrast, in a given case, a chit fund company may receive part of, or whole of the decretal amount from a subscriber, and taking advantage of the fact that the satisfaction of the decree is not recorded, he may proceed to recover the amount from the sureties. Several complications of this nature may arise, if a chit fund company is permitted to proceed against the surety alone in the execution. Therefore, this Court is of the view that the action taken by the 1st respondent choosing the petitioner alone, and not proceeding against all other judgment-debtors similarly, cannot be sustained in law.

Therefore, the C.R.P. is allowed, setting aside the order under challenge. The matter is remanded to the Executing Court to enable the 1st respondent to take necessary steps, in accordance with law. It is left open to the respondent-decree-holder to make necessary amendments to the E.P. There shall be no order as to costs.

The miscellaneous petitions filed in this C.R.P. shall also stand disposed of.