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2025 DIGILAW 184 (TS)

Chuttubaka Vasantha Rao v. Shriram Chits Private Limited

2025-03-25

LAXMI NARAYANA ALISHETTY

body2025
ORDER : Laxmi Narayana Alishetty, J. The order dated 13.12.2023 passed by the Principal Junior Civil Judge, Kothagudem in EP.No.21 of 2020 in Arbitration Case No.449 of 2015 is under challenge in this Civil Revision Petition. 2. Heard Sri Krishna Kishore Kovvuri, learned counsel for petitioners and Sri N.Srikanth Goud, learned counsel for respondent No.1. Perused the material available on record. 3. Petitioner Nos.1 to 3 are judgment-debtor Nos.2 to 4 respectively, respondent No.1 is decree-holder, respondent Nos.2, 3 and 4 are garnishees and respondent No.5 is judgment-debtor No.1 before the Executing Court. 4. The facts of the case shorn off unnecessary details are that respondent No.5 is the subscriber of chit of respondent No.1- company for a chit value of Rs.5 lakhs payable in 50 months; that he participated in the chit auction on 16.08.2014 and has become successful bidder for a sum of Rs.3,12,000/-; that the petitioners herein stood as guarantors to respondent No.5; that he paid only 14 EMIs in full and part of 15 th EMI and became defaulter; that claim petition was filed before the Deputy Registrar of Chits, Khammam, vide ARB.No.449 of 2015 for recovery of sum of Rs.3,81,943/-; that the said authority vide order 06.08.2019, issued Recovery Certificate; that the said Certificate was transferred to the Court of Principal Junior Civil Judge, Kothagudem and Execution Petition in EP.No.21 of 2020 was filed for enforcement of Award passed in the said ARB Case, by attaching the salaries of the petitioners; that the Executing Court vide impugned order dated 13.12.2023 issued warrants for attachment of respective salaries of the petitioners. Challenging the same, the present Revision Petition is filed. 5. Respondent No.1 filed counter inter alia denying the allegations and averments made in the Revision Petition and prayed to dismiss the Revision Petition. 6. Learned counsel for the petitioners would submit that the Executing Court has no jurisdiction to entertain the EP in view of Rule 35 of AGENCY RULES , 1994, which contemplates that a decree passed outside the jurisdiction of agency tracts shall be forwarded to Agent to Government concerned. Learned counsel would further submit that as per Section 71 of the CHIT FUNDS ACT , 1982, Registrar alone is competent to issue Certificate and in the instant case, the Deputy Registrar of Chits had issued Certificate dated 06.08.2019, therefore the EP is not executable. Learned counsel would further submit that as per Section 71 of the CHIT FUNDS ACT , 1982, Registrar alone is competent to issue Certificate and in the instant case, the Deputy Registrar of Chits had issued Certificate dated 06.08.2019, therefore the EP is not executable. He would further submit that as per Section 55 of the CHIT FUNDS ACT , decree-holder cannot file Execution Petition straightaway before the Court concerned and in fact, it has to be forwarded by the Registrar to the competent Court. He would further submit that as per Section 29 of the Arbitration and Conciliation Act, the dispute shall be resolved by the Arbitrator within a period of one year, whereas in the present case, the dispute was referred on 29.09.2015 and the Certificate was issued on 06.09.2019, which is clearly beyond the period of one year and as such, the EP is not maintainable. 7. Learned counsel for the petitioners to substantiate his contentions has relied upon the following judgments:- (1) Puligujju Vasantha Rao Vs. M/s Shriram City Union Finance Ltd., Bhadrachalam, reptd by its authorised signatory and another , 2013(2) ALT 283 (DB) (2) P.Ramakrishna and another Vs. M/s Shriram City Union Finance Ltd., Bhadrachalam, reptd by its authorised signatory and another , 2013(3) ALT 143 (SB) (3) Order dated 14.03.2023 passed in W.P.No.907 of 2023 8. Learned counsel for respondent No.1-decree-holder inter alia contended that Section 2 9A of the Arbitration and Conciliation Act is not applicable to the instant case since the Award has been passed by the Deputy Registrar of Chits, as per the CHIT FUNDS ACT , therefore, the objection raised by the learned counsel for the petitioners is untenable. Learned counsel would further submit that the State Government issued GOMs.No.260, Revenue (Registration-1) Department, dated 11.10.2016, appointing several officers, viz., Additional, Joint, Deputy and Assistant Registrars as officers empowered to discharge the duties imposed on the Registrar under the CHIT FUNDS ACT . He would further submit the word ‘Registrar’ is defined under Rule 2 of the CHIT FUNDS ACT , 1982, as per which, an Additional, a Joint, Deputy or an Assistant Registrar to whom a delegation has been made under Section 61(1) thereof will be entitled to issue a Certificate of Recovery under Rule 55(3) thereof. Therefore, in view of the above G.O., Deputy Registrar of Chits is competent to issue Certificate of Recovery. 9. Therefore, in view of the above G.O., Deputy Registrar of Chits is competent to issue Certificate of Recovery. 9. To buttress his contentions, learned counsel for respondent No.1 relied upon the judgment of the erstwhile High Court of Andhra Pradesh in Pilli Rambabu Vs. Sirasani Srikanth Vinay Kumar , [2012 SCC Online AP 536] and judgment of this Court in Integrated Tribal Development Agency (ITDA) Vs. M/s Water Health India Private Limited (WHIN), [ 2021(3) ALT 469 (TS)] 10. By relying upon the above two judgments, learned counsel for respondent No.1 contended that Agency laws are applicable only to tribals, that too, only in respect of immovable properties which are part of agency tracts. In the present case, the petitioners are non-tribals and in fact, only their salary attachment has been effected, which is no way related to immovable properties situated in agency tracts, therefore, the grounds raised in this Revision Petition are not tenable and the Revision Petition is liable to be dismissed. 11. The AGENCY RULES are the Rules designed to protect the rights and interests of the tribal communities and the matters connected with the immovable properties situated within the agency tracts, to ensure the well-being of the tribals. Further, it is not the case of either of the parties that any one of the parties to the E.P. are tribals, more particularly, the petitioners, who are judgment-debtors. The Agency Laws does not attract the petitioners merely for the reason that they are residing in agency area. Further, the salaries of the petitioners, which does not come within the purview of immovable properties located in scheduled areas or agency tracts, are directed to be attached by the Executing Court, therefore, the impugned order does not in any manner relate to the agency tracts. Therefore, Rule 35 of the AGENCY RULES does not attract to the present case. 12. As regards the contention of learned counsel for the petitioners that the Award was passed by Deputy Registrar of Chits, it is to be seen that under Rule 2 of Chit Fund Rules, the word ‘Registrar’ is defined, which includes an Additional, a Joint, Deputy or an Assistant Registrar. Further, G.O.Ms.No.260, Revenue (Registration-I) dated 11.10.2016, empowers the said authorities to discharge the duties imposed on the Registrar. Further, G.O.Ms.No.260, Revenue (Registration-I) dated 11.10.2016, empowers the said authorities to discharge the duties imposed on the Registrar. A harmonious reading of the above, makes it clear that the Award passed in the instant case is passed by a competent authority. Therefore, the contention of learned counsel for the petitioners regarding incompetency of authority who passed the Award is negative/untenable. 13. Coming to the contention of the learned counsel for the petitioners that in view of Rule 55 of the CHIT FUNDS ACT , the decree-holder cannot straightaway file execution petition and it is for the Registrar concerned to forward the Award Certificate to the competent Court. Here, it is apposite to refer and extract Section 55 of the CHIT FUNDS ACT , which reads as hereunder:- “ Section 55 of the CHIT FUNDS ACT , 1982, stipulates that upon a winding-up order or appointment of a receiver, no subscriber can initiate or continue legal proceedings against the foreman for amounts due, except with the Registrar's leave, who may impose terms.” 14. In the case on hand, the proceedings are initiated by the decree-holder against the subscriber and guarantors of the subscriber of the chit for the default committed by them, unlike the steps to be taken by the subscriber against the foreman, as per Section 55 of the CHIT FUNDS ACT . Therefore, Section 55 of the CHIT FUNDS ACT is not applicable to the case on hand. 15. In Puligujju Vasantha Ra o’s case (cited supra), it is a case where the judgment-debtor is a schedule tribe, whereas, in the present case, none of the judgment-debtors are scheduled tribes, therefore, the said judgment is not applicable to the present case. 16. Furthermore, it is pertinent to note that by virtue of Section 9 of CPC., ordinary civil Courts have jurisdiction to entertain all disputes of civil nature arising in scheduled areas, unless there is a specific provision barring the jurisdiction of civil Courts, either expressly or impliedly by the AGENCY RULES . 17. The trial Court rightly held that Award passed against petitioners has become final as the same is not challenged and further, held that attachment of salary does not in any manner relate to the agency tracts and that merely because the petitioners are working in agency area, Rule 35 of the AGENCY RULES does not get attracted. 18. 17. The trial Court rightly held that Award passed against petitioners has become final as the same is not challenged and further, held that attachment of salary does not in any manner relate to the agency tracts and that merely because the petitioners are working in agency area, Rule 35 of the AGENCY RULES does not get attracted. 18. In the light of the foregoing reasons and discussion and having regard to the aforesaid facts and circumstances of the case and, this Court does not find any illegality or irregularity committed by the Executing Court in passing the impugned order and accordingly, the Revision Petition being devoid of merits is liable to be set aside. 19. In the result, the Revision Petition is dismissed. 20. Miscellaneous petitions pending, if any, shall stand closed. No costs.