Punyamuthula Venkata Viswa Sundara Rao vs Margadarsi Chit Fund Private Limited

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2017 Supreme(AP) 69

IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
C.V Nagarjuna Reddy and T. Rajani, JJ.
Punyamuthula Venkata Viswa Sundara Rao and another - Petitioners
Vs.
M/s. Margadarsi Chit Fund Private Limited and others - Respondents
CRP. Nos. 5236, 5741 and 5753 of 2016
Decided On : 14-03-2017

Advocates Appeared:
For the Petitioners: C.S.N Raju
For the Respondent: P. Durga Prasad

Headnote:
Chit Fund Act 1982 - Section 69 - Indian Contract Act - Sections 128, 68, 71 and 66 - petitions arise out of three E.Ps Nos. 4, 7 and 6 of 2016 in AACFs. respectively which are filed to execute the order passed against all the judgment debtors in the Arbitration proceedings before the Deputy Registrar of Chits and Arbitrator under Chit Fund Act - petitioners are the judgment debtors and the 1st chit funds Private Limited, is the decree holder. (To suit the convenience in the context, the parties hereinafter would be referred to as the judgment debtors and the decree - Decree holder represented by its Principal Officer and Manager Kakinada obtained the award against the principal debtor and all the judgment debtors, who include these revision petitioners figured as judgment debtors 2, 3 and 6, respectively - Deputy Registrar made an order under Section of Chit Funds Act ordering that the judgment debtors - Company registered under the Indian Registration Act and carrying on business in running the chits, with due permission from the competent authority under the Act - Decree holder chit fund company - Successful bidder and the decree holder paid - Held, argument was advanced in that regard, it would be better for us to clarify the said aspect, so as not to leave scope for another round of litigation, at any later point of time. The dispute in this case was dealt with by the Deputy Registrar. Though the proceedings do not spell any nomination made by the Registrar, it has to be assumed that the registrar nominated the Deputy Registrar, to settle the dispute, by invoking the power given to him under Section 66 of the Act which permits the registrar to appoint a person to settle the dispute which is referred to him - But such powers are not conferred on him in respect of the certificate that has to be issued for the purpose of execution of the award - The wording of section and also Rule makes it clear that it is only the Registrar who has to issue the certificate referred in the above provisions - Though the opening part of section says that the registrar or his nominee can pass the award, clause (a) of section specifies the Registrar as the person who has to issue the certificate - But in this case the Deputy Registrar, apart from deciding the dispute has also issued the certificate, that is supposed to be issued by the Registrar which shall not be accepted by the executing Court - course that has to be followed by the decree holder is to make an application to the Registrar 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 - Judgment debtors are filed, are directed to return the petitions presented by the decree holder, with a liberty to get the applications forwarded to the civil court through the Registrar along with the certificate issued by the Registrar - Petitions are accordingly disposed.

ORDER :

T. RAJANI, J.

These three civil revision petitions arise out of three E.Ps Nos. 4, 7 and 6 of 2016 in AACFs. Nos. 82 of 2012, 165 of 2013 and 82 of 2012, respectively, which are filed to execute the order passed against all the judgment debtors in the Arbitration proceedings before the Deputy Registrar of Chits and Arbitrator under Chit Fund Act 1982, (for short the Deputy Registrar) Kakinada, in AACF. No. 82 of 2012 on 14.07.2014

2. The revision petitioners are the judgment debtors and the 1st respondent, M/s. Margadarsi chit funds Private Limited, is the decree holder. (To suit the convenience in the context, the parties hereinafter would be referred to as the judgment debtors and the decree holder.)

3. The facts leading to these revisions may be briefly stated thus. The decree holder represented by its Principal Officer and Manager, Kakinada, obtained the award against the principal debtor and all the judgment debtors, who include these revision petitioners, figured as judgment debtors 2, 3 and 6, respectively. The Deputy Registrar made an order under Section 69 of Chit Funds Act, 1982 (for short the Act) ordering that the judgment debtors 1 to 6 shall pay to the decree holder a sum of Rs. 7,09,701/- with interest at 18% per annum on the principal amount of Rs. 6,42,475/- from the date of raising of the dispute i.e. 14.09.2012 till the date of realization apart from costs of Rs. 10,880/-.

4. The decree holder is a Company registered under the Indian Registration Act and carrying on business in running the chits, with due permission from the competent authority under the Act.

5. First judgment debtor, who is the principal debtor, is a subscriber of the decree holder chit fund company. He subscribed to ticket No. 49 in group LT01CK registered with previous sanction No. 231/2009, for a value of Rs. 15,00,000/-, which is repayable at the rate of Rs. 30,000/- per month for a period of 50 months. The first judgment debtor participated in the auction held on 24.01.2010 and became the successful bidder and the decree holder paid the prize money to the first judgment debtor on the basis of the sureties submitted by the other judgment debtors i.e. judgment debtors 2 to 6, who executed a guarantee agreement in favour of the decree holder.

6. The liability of the judgment debtors, arises from out of the guarantee agreement executed in favour of the decree holder. Having obtained an order from the Deputy Registrar as mentioned above, the decree holder also obtained recovery certificate from the Deputy Registrar and filed the above three E.Ps only against the judgment debtors 2, 3 and 6, who are the revision petitioners herein.

7. Questioning the maintainability of the said E.Ps, the judgment debtors 2, 3 and 6 have approached this Court by way of filing the present revision petitions.

8. The maintainability of the E.Ps is assailed on the following grounds, which are common in all the revision petitions:

9. E.P No. 4 of 2015 in AACF. No. 82 of 2012 was filed on the file of the Additional Senior Civil Judge, West Godavari District at Eluru and E.P Nos. 6 and 7 of 2016 in AACF. Nos. 82 and 165 of 2012, respectively, were filed on the file of the V Senior Civil Judge, City Civil Court at Hyderabad.

10. The award copy in AACF. No. 82 of 2012 was obtained from the Chit Registrar at Kakinada, East Godavari District and as per the Code of Civil Procedure (for short the CPC) any execution petition need to be filed in original court and has to be got ordered, before getting the same transferred to its original place of execution. In the instant case, original Court of jurisdiction is at Kakinada, transfer E.P has to be filed at E.P Court at Kakinada after getting the same ordered to the Court of actual execution. But no such steps have been taken. It is well settled law by our Honble High Court that total awarded amount have to be claimed against guarantors/judgment debtors, proportionately by distributing it equally among all the judgment debtors.

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