Execution proceedings must comply with statutory procedures; joint liability allows collection from one surety, mitigating claims among them later.

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 Cour