whether the decree-holder is entitled to proceed against the judgment-debtor No.2 only, leaving the other judgment-debtors, who also suffered a joint and several decree.

HIGH COURT OF ANDHRA PRADESH

TUESDAY ,THE EIGHTEENTH DAY OF APRIL

TWO THOUSAND AND TWENTY THREE

PRSENT

THE HONOURABLE SRI JUSTICE B V L N CHAKRAVARTHI

CIVIL REVISION PETITION NO: 1719 OF 2015

Between:

1. MARGADARSI CHIT FUND PVT. LTD Having its branch at Tirupati, Rep.

by its Manager/Foreman, C. Kesavulu Naidu, S/o. Late C. Krishnama

Naidu.

...PETITIONER(S)

AND:

1. K. NARENDRA KUMAR & 4 OTHERS S/o. K. Ramu, Aged about 35

years, R/o. D.No.18/8/67, 2nd Floor, madhura Nagar, Tirupati, Chittoor

District.

2. R. Jayaprada W/o. K. Raghavendra, Aged about 36 years, Working

Senior Medical office, Casualty, SVIMS, Tirupathi, Chittoor District.

3. C. Yasoda, W/o. C. Reddeppa, Aged about 55 years, R/o. D.No.18-1-

46/E, Santhi Nagar, Tirupathi, Chittoor District.

4. N. Mahesh Babu S/o. N. Ramachandraiah, Aged about 34 years, R/o.

D.No.20-3-53/E, Upstairs, Erramitta, Sivajyothi Nagar, Tirupathi, Chittoor

District.

...RESPONDENTS

Counsel for the Petitioner(s): P DURGA PRASAD

Counsel for the Respondents: SRICHARAN TELAPROLU

The Court made the following: ORDER

2023:APHC:11624

HIGH COURT OF ANDHRA PRADESH AT AMARAVATI

****

CIVIL REVISION PETITION NO.1719 of 2015

Between:

M/s. Margadarsi Chit Fund Private Limited, Having its

branch at Tirupati, represented by its Manager/Foreman,

C.Kesavulu Naidu, S/o. Late C.Krishama Naidu.

… Petitioner/Decree-holder/Plaintiff

 Versus

1. K.Narendra Kumar, S/o. K.Ramu, 35 years,

R/o.D.No.18/8/67, 2nd Floor, Madhura Nagar,

Tirupati, Chittoor District.

2. R.Jayaprada, W/o. K.Raghavendra, 36 years,

W/as.Senior Medical Office, Casualty, SVIMS,

Tirupathi, Chittoor District.

3. C.Yasoda, W/o. C.Reddeppa, 55 years, R/o.D.No.18-

1-46/E, Santhi Nagar, Tirupathi, Chittoor District.

4. N.Mahesh Babu, S/o. N.Ramachandraiah, 34 years,

R/o.D.No.20-3-53/E, Upstairs, Erramitta, Sivajyothi

Nagar, Tirupathi, Chittoor District.

5. A.Rajasekhar, S/o. A.Vittal Naidu, 34 years,

R/o.D.No.16/1/213, Upstairs, Erramitta, Sivajyothi

Nagar, Tirupathi, Chittoor District.

(Respondent Nos.1, 3 to 5 are not necessary parties in this

CRP)

... Respondents/Judgment-debtors/Defendants

* * * * *

DATE OF ORDER PRONOUNCED : 18.04.2023.

SUBMITTED FOR APPROVAL:

 HONOURABLE SRI JUSTICE B.V.L.N.CHAKRAVARTHI

1. Whether Reporters of Local Newspapers

 may be allowed to see the Order? Yes/No

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2. Whether the copy of Order may be

 marked to Law Reporters/Journals? Yes/No

3. Whether His Lordship wish to see the

 fair copy of the Order? Yes/No

_____________________________

 B.V.L.N.CHAKRAVARTHI, J

2023:APHC:11624

Page 3 of 12

* HONOURABLE SRI JUSTICE B.V.L.N.CHAKRAVARTHI

+ CIVIL REVISION PETITION NO.1719 OF 2015

% 18.04.2023

# Between:

M/s. Margadarsi Chit Fund Private Limited, Having its

branch at Tirupati, represented by its Manager/Foreman,

C.Kesavulu Naidu, S/o. Late C.Krishama Naidu.

… Petitioner/Decree-holder/Plaintiff

 Versus

1. K.Narendra Kumar, S/o. K.Ramu, 35 years,

R/o.D.No.18/8/67, 2nd Floor, Madhura Nagar,

Tirupati, Chittoor District.

2. R.Jayaprada, W/o. K.Raghavendra, 36 years,

W/as.Senior Medical Office, Casualty, SVIMS,

Tirupathi, Chittoor District.

3. C.Yasoda, W/o. C.Reddeppa, 55 years, R/o.D.No.18-

1-46/E, Santhi Nagar, Tirupathi, Chittoor District.

4. N.Mahesh Babu, S/o. N.Ramachandraiah, 34 years,

R/o.D.No.20-3-53/E, Upstairs, Erramitta, Sivajyothi

Nagar, Tirupathi, Chittoor District.

5. A.Rajasekhar, S/o. A.Vittal Naidu, 34 years,

R/o.D.No.16/1/213, Upstairs, Erramitta, Sivajyothi

Nagar, Tirupathi, Chittoor District.

(Respondent Nos.1, 3 to 5 are not necessary parties in this

CRP)

... Respondents/Judgment-debtors/Defendants

! Counsel for the Revision

 -petitioner : Sri P.Durga Prasad

^ Counsel for the

 Respondent No.2 : Sri T.Sri Charan

^ Counsel for the

 Respondent Nos.1, 3 to 5 : Proforma Parties

< Gist:

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> Head Note:

? Cases referred:

1. 2013 (6) ALT 798.

2. 2017 (3) ALT (DB) 81 = 2017 (3) ALD 387 = 2017 (2)

 HLT 106.

 3. Shriram Chits Private Limited vs. Manuri Ravi and

others in CRP No.6499 of 2016, dated. 30.08.2016

on the file of High Court of Judicature, for the State

of Telangana and for the State of Andhra Pradesh at

Hyderabad.

4. 2014 (6) ALT (DB) 69 = 2015 (2) ALD 166.

5. 2012 (11)SCC 511.

6. 1969 AIR (SC) 297.

7. 1982 AIR (SC) 1497.

8. 1987 AIR (SC) 1078.

9. 1992 AIR (SC) 1740.

10. 1986 AIR (SC) 868.

11. 2009 9 SCC 478.

12. 2010 AIR (SC) 3413.

This Court made the following:

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THE HONOURABLE SRI JUSTICE B.V.L.N.CHAKRAVARTI

CIVIL REVISION PETITION NO.1719 of 2015

O R D E R:

Heard Sri P.Durga Prasad, learned counsel for revisionpetitioner/decree-holder and Sri T.Sri Charan, learned counsel

for respondent No.2/judgment-debtor No.2.

2. The contention of revision-petitioner/decree-holder is that

as per the decree passed against the judgment-debtors, all of

them are jointly and severally liable for the decree amount but

none of them discharged the decree amount, and therefore,

execution petition was filed against the respondent No.2/

judgment-debtor No.2 who is working as Senior Medical Officer,

SVIMS, Tirupati, for realization of the decree debt, as her liability

towards the decree amount is coextensive with that of the other

judgment-debtors.

3. The contention of respondent No.2/judgment-debtor No.2

is that the revision-petitioner/decree-holder filed execution

petition against respondent No.2/judgment-debtor No.2 alone, by

leaving the other judgment-debtors, and therefore it is not just

and proper.

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4. The learned Trial Court „Dismissed‟ the execution petition

filed by the revision-petitioner/decree-holder on 21.11.2014 by

considering the judgement in Jaichand T.Gangwal vs. Shriram

Chits Private Limited and others1 relied by the respondent

No.2/judgment-debtor No.2, observing that if other judgmentdebtors are omitted from the array of the parties in the execution

petition, the one who is singled out would face hardship and

thereby gave a finding that filing of execution petition against

judgment-debtor No.2 by leaving out judgment-debtor Nos.1, 3 to

5 will cause hardship to judgment-debtor No.2.

5. In the light of above rival contentions, the point that would

arise in the revision-petition is as under: -

“Whether the Trial Court committed any material

irregularity in the Order, dated 21.11.2014 passed

in E.P.No.71 of 2013 in O.S.No.449 of 2008?”

6. P O I N T: -

There is no dispute about the joint and several liability of

all the judgment-debtors in discharging the debt due under the

decree as ordered by the Trial Court in O.S.No.449 of 2008.

Accordingly, the decree-holder proceeded against the judgmentdebtor No.2, who is respondent No.2 herein, seeking to attach her

1 2013 (6) ALT 798.

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salary, as she is being one of the guarantors towards the debt

due by the principal debtor.

7. Now, it must be seen whether the decree-holder is entitled

to proceed against the judgment-debtor No.2 only, leaving the

other judgment-debtors, who also suffered a joint and several

decree.

8. The learned counsel for revision-petitioner/decree-holder

placed reliance on the decision rendered by this Court in

Punyamuthula Venkata Viswa Sundara Rao and another vs.

M/s. Margadarsi Chit Fund Private Limited and others2,

wherein it was held as under:

“The law is well settled otherwise i.e., that the decree-holder

has an option to proceed against either the principal debtor

or any of the guarantors or against all of them. There need

to be no interpretative pains, to arrive at the conclusion

that the liability of a surety is co-extensive with that of the

principal debtor, as Section 128 of the Indian Contract Act

is clearly worded. It says that the liability of the surety is

co-extensive with that of the principal debtor unless it is

otherwise provided by the contract.”

2 2017 (3) ALT (DB) 81 = 2017 (3) ALD 387 = 2017 (2) HLT 106.

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9. Further, in Shriram Chits Private Limited vs. Manuri

Ravi and others3 which is rendered by this Court, at para-No.3

referred the Judgment of this Court‟s Division Bench in

Chalapathi Chit Fund Private Limited, Guntur vs. Adusumalli

Malleswara Rao and three others (CRP No.2980 of 2009) held as

under:

“In the above Division Bench Judgment of this Court, after

a review of the entire case law, their Lordships held that

where judgment-debtors suffered a joint and several decree,

the decree-holder is at liberty to recover the money against

any one of the judgment-debtors and further held that the

decree-holder has the liberty to file an execution petition

against one or the other judgment-debtors.”

10. The learned counsel for revision-petitioner also placed

reliance on the proposition of law laid down in M.Rama Rao vs.

M/s. Shriram City Union Finance Limited4 wherein this Court

held at para No.7 as under:

“In view of the law laid by this Court coupled with Section

128 of the Indian Contract Act, it is clear that it is for the

decree-holder to proceed against the principal borrower or

surety/guarantor. The decree-holder can proceed to recover

3 CRP No.6499 of 2016, dated 30.08.2016 on the file of High Court of

Judicature, For the State of Telangana and For the State of Andhra Pradesh

at Hyderabad.

4 2014 (6) ALT (DB) 69 = 2015 (2) ALD 166.

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the amount in accordance with law against principal

borrower or guarantor or both simultaneously.”

11. In Jaichand T.Gangwal case (supra) the judgement debtor

specifically pleaded that substantial amount has been recovered

from the 2nd respondent and unless the relief is claimed against

all, the Court would not be able to determine the dispute,

effectively. In that context it was held that if the E.P. is not filed

against all the judgment debtors, the one, who is sought to be

proceeded against, does not have the facility or opportunity to

elicit the information as to whether any amount covered by the

decree has been paid or there is any collusion between the decree

holder on the one hand and the other judgment debtors on the

other.

12. Section 128 of the Indian Contract Act, 1872, on Surety‟s

liability says that the liability of the surety is co-extensive with

that of the principal debtor, unless it is otherwise provided by the

contract. Therefore, a surety cannot stop execution of the decree

against him until the creditor has exhausted his remedy against

the principal debtor. The surety does not have a right to dictate

terms to the creditor as how he should pursue his remedies

against the principal debtor.

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13. The Hon‟ble Apex Court in Ram Kishun and Ors. vs.

State of Uttar Pradesh and Ors.,

5 on the question whether a

guarantor can restrain execution of the decree against him until

creditor exhausted his remedy against principal debtor, held as

under

„‟[5] We have considered the rival submissions made by

Learned Counsel for the parties and perused the record.

There cart be no dispute to the settled legal proposition of

law that in view of the provisions of Section 128 of the Indian

Contract Act, 1872 (hereinafter called the 'Contract Act'), the

liability of the guarantor/surety is co-extensive with that of

the debtor. Therefore, the creditor has a right to obtain a

decree against the surety and the principal debtor. The

surety has no right to restrain execution of the decree against

him until the creditor has exhausted his remedy against the

principal debtor for the reason that it is the business of the

surety/guarantor to see whether the principal debtor has

paid or not. The surety does not have a right to dictate terms

to the creditor as how he should make the recovery and

pursue his remedies against the principal debtor at his

instance. (Vide: The Bank of Bihar Ltd. v. Dr. Damodar

Prasad and Anr.,6 Maharashtra State Electricity

Board, Bombay v. The Official Liquidator, High Court,

Ernakulam and Anr.,7 Union Bank of India v. Manku

5 2012 (11) SCC 511.

6 1969 AIR (SC) 297.

7 1982 AIR (SC) 1497.

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Narayana8 and State Bank of India v. Messrs.

Indexport Registered and Ors.9

[6] In State Bank of India v. Saksaria Sugar Mills Ltd.

and Ors.,10 this Court while considering the provisions of

Section 128 of the Contract Act held that liability of a surety

is immediate and is not deferred until the creditor exhausts

his remedies against the principal debtor. (See also:

Industrial Investment Bank of India Ltd. v. Biswasnath

Jhunjhunwala11; and United Bank of India v. Satyawati

Tondon and Ors.,

12. „‟

14. Admittedly, no evidence was placed by the JDr No.2 before

the Trial Court that despite amount had already been paid by the

principal debtor, the revision petitioner/decree holder filed the

execution petition for wrongful gain or any of the other judgmentdebtors paid the decree amount in full or part. Therefore, the

contention of the JDr No.2 that decree holder must implead the

other judgment-debtors is not tenable in law.

15. Hence, respondent/judgment-debtor No.2, who suffered a

joint and several decree, cannot stop execution of the decree

against her until the creditor has exhausted his remedy against

the principal debtor or other JDr‟s. Hence, she does not have a

8 1987 AIR (SC) 1078.

9 1992 AIR (SC) 1740.

10 1986 AIR (SC) 868.

11 2009 9 SCC 478.

12 2010 AIR (SC) 3413.

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right to dictate terms to the decree holder as how he should

pursue his remedies.

16. Therefore, the Trial Court failed to appreciate the facts and

law in a proper perspective. The trail Court had mis-directed

itself on facts and law. Hence, committed material irregularity.

17. In that view of the matter, the order of the trail Court is

labile to be set-aside.

18. In the result, the Civil Revision Petition is „Allowed‟ and the

Order, dated 21.11.2014 passed in E.P.No.71 of 2013 in

O.S.No.449 of 2008 by the Principal Senior Civil Judge, Tirupati

is „set-aside‟. The learned Principal Senior Civil Judge, Tirupati is

directed to proceed with E.P.No.71 of 2013 in O.S.No.449 of 2008

and dispose of the same in accordance with law. There shall be

no order as to costs.

As a sequel, miscellaneous applications pending, if any,

shall stand closed.

B.V.L.N.CHAKRAVARTHI, J

18th April 2023.

DNB

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