ORDER:

The present Writ Petition came to be filed under Article

226 of the Constitution of India seeking the following relief:-

“to issue an appropriate writ, order or direction, particularly one in the nature of writ of Certiorari call for the records and set aside the Arbitration Claim Petition No.97/2014 dt:22-11-2014 passed by the 2nd respondent under Chit Fund Act, 1982 and also the consequential proceedings as being illegal, arbitrary and violative of principles of natural justice and pass such other order or orders as are deemed fit and proper in the circumstances of the case”.

2. The brief facts of the case are that the 1st petitioner is the subscriber of the 3rd respondent Chit Fund Company, which is carrying the Chit Fund business and the 1st petitioner is having Ticket No.04 in the Chit Group STO 32XP for a value of Rs.5,00,000/- which is payable @ Rs.20,000/- per month for a period of 25 months. When the 3rd respondent conducted auction on 31.01.2012, the 1st petitioner became the successful bidder and agreed to forgo an amount of Rs.1,50,000/- and subsequently, the 3rd respondent paid Rs.3,50,000/- to the 1st petitioner on

28.02.2012. The petitioners 2 to 6 herein are stood as guarantors in favour of the 3rd respondent Company. As the 1st petitioner failed to pay the subsequent installments from 15.03.2013 onwards, the 3rd respondent filed arbitration case before the 2nd respondent.

(a) Upon considering the arbitration case filed by the

3rd respondent, the 2nd respondent has issued notices to the petitioners and subsequently, the 1st petitioner appeared before the 2nd respondent on 29.04.2014 and also filed steps petition against the 5th petitioner in Prajasakthi Newspaper and the other petitioners 2, 3, 4 and 6 were called absent. Subsequently, the 2nd respondent passed an ex parte award on 22.11.2014 under Section 69 of the Chit Fund Act, 1982 (for short “the Act”) and also issued recovery certificate under Section 71(a) of the Act on the same day. Pursuant to the said order, the 3rd respondent filed E.P.No.39 of 2015 before the learned Principal Senior Civil Judge, Vijayawada, Krishna District under Order 21, Rule 48 of the Civil Procedure Code, 1908 and the Court passed attachment of salary order on 19.03.2015 against all the petitioners. Aggrieved thereby, the present writ petition is filed.

3. Learned Government Pleader for Revenue filed counter- affidavit and denied the averments made by the petitioners and also stated that after issuing notices and giving opportunity of hearing to the petitioners only, the 2nd respondent passed the impugned order and requested to dismiss the writ petition.

4. Heard learned counsel for the petitioners, learned Government Pleader for Revenue appearing for respondents 1 and 2 and Sri P.Durga Prasad, learned Standing Counsel appearing for 3rd respondent-Margadarsi Chit Fund Private Limited.

5. On 07.04.2015, this Court passed the following interim order:

“….. there shall be interim stay of all further proceedings pursuant to the award dated 22.11.2014 in Arbitration Claim Petition No.97 of 2014.”

6. Learned counsel for the petitioners submitted that though the petitioners appeared before the 2nd respondent and requested time for engaging an Advocate for proper adjudication of the case, however, without giving any opportunity of hearing to the petitioners, the 2nd respondent passed award mechanically. He further submitted that Section 69 of the Act clearly postulates that after giving a reasonable opportunity of hearing to the parties, to the disputes concerned, the award should be passed. However, without giving a go-by to the said provision of law, the 2nd respondent passed the ex parte award followed by recovery certificate under Section 71(a) of the Act.

7. On careful perusal of the entire material on record and perused the counter-affidavit filed by the learned Government Pleader, the sole point coming up of consideration of this Court is whether reasonable opportunity of hearing be