APHC010628222025

IN THE HIGH COURT OF ANDHRA PRADESH

PRESENT:THE HONOURABLE SRI JUSTICE RAVI CHEEMALAPATI

CIVIL REVISION PETITION NO: 3456/2025

Between:

1. KAMBALA VENKATA RAMA RAO, S/O LAKSHMI

ABOUT 39 YEARS. EMPLOYEE, R/O D.NO. 10

WARD, INDIRA NAGAR, REPALLE, GUNTUR DISTRICT.

1. KAPIL CHIT KOSTA PT LTD, ARUNDELPET BRANCH, GUNTUR,

REP. BY IT'S ASSISTANT DIVISIONAL MANAGER, T. SRINIVAS.

RESPONDENT/DHR/DISPUTANT

2. VADDE VENKATESWARA RAO, S/O RAGHAVA RAO, AGED ABOUT

55 YEARS. EMPLOYEE, R/O D.NO.10

STREET, 10TH WARD, REPALLE, GUNTUR DISTRICT.

3. ARAVA SANKARA RAO, , S/O KOTESWARA RAO, AGED ABOUT 58

YEARS. EMPLOYEE, R/O D.NO. 4

PILLAVARIPALEM, GUNTUR DISTRICT.

4. BHAVIREDDY NAGESWARA RAO, S/O VENKATA RAMAIAH, AGED

ABOUT 57 YEARS. EMPLOYEE, R/O D.NO. 3

BORA MAYDIGAPALLI NAGARAM MANDAL, GUNTUR DISTRICT.

5. BOPPA VENKATESWARA RAO, S/O RADHA KRISHNA MURTHY,

AGED ABOUT 56 YEARS. EMPLOYEE, R/O D.NO. 1

WARD, CHERUKUPALLI POST AND MANDAL, GUNTUR DISTRICT.

6. VEMULAPALLI KUTUMBA RAO, , S/O NAGESWARA RAO, AGED

ABOUT 58 YEARS, FINANCE BUSINESS, R/O D.NO. 7

GANGADHAR VARI STREET, REPALLE, GUNTUR DISTRICT.

7. MOPARTHY RAMESH KUMAR, S/O CHANDRA PAUL, AGED ABOUT

49 YEARS. EMPLOYEE, R/O D.NO. 20

KOLLURU GUNTUR DISTRICT.

1

IN THE HIGH COURT OF ANDHRA PRADESH

AT AMARAVATI

(Special Original Jurisdiction)

THE HONOURABLE SRI JUSTICE RAVI CHEEMALAPATI

CIVIL REVISION PETITION NO: 3456/2025

KAMBALA VENKATA RAMA RAO, S/O LAKSHMI NARAYANA AGED

ABOUT 39 YEARS. EMPLOYEE, R/O D.NO. 10 -15

WARD, INDIRA NAGAR, REPALLE, GUNTUR DISTRICT.

...PETITIONER

AND

KAPIL CHIT KOSTA PT LTD, ARUNDELPET BRANCH, GUNTUR,

REP. BY IT'S ASSISTANT DIVISIONAL MANAGER, T. SRINIVAS.

RESPONDENT/DHR/DISPUTANT

VADDE VENKATESWARA RAO, S/O RAGHAVA RAO, AGED ABOUT

55 YEARS. EMPLOYEE, R/O D.NO.10 -15-75, GARIKAVARIPATI

STREET, 10TH WARD, REPALLE, GUNTUR DISTRICT.

ARAVA SANKARA RAO, , S/O KOTESWARA RAO, AGED ABOUT 58

YEE, R/O D.NO. 4 -17, KUNCHANAPUDI POST,

PILLAVARIPALEM, GUNTUR DISTRICT.

BHAVIREDDY NAGESWARA RAO, S/O VENKATA RAMAIAH, AGED

ABOUT 57 YEARS. EMPLOYEE, R/O D.NO. 3 -108, YELETI PALEM,

BORA MAYDIGAPALLI NAGARAM MANDAL, GUNTUR DISTRICT.

VENKATESWARA RAO, S/O RADHA KRISHNA MURTHY,

AGED ABOUT 56 YEARS. EMPLOYEE, R/O D.NO. 1

WARD, CHERUKUPALLI POST AND MANDAL, GUNTUR DISTRICT.

VEMULAPALLI KUTUMBA RAO, , S/O NAGESWARA RAO, AGED

ABOUT 58 YEARS, FINANCE BUSINESS, R/O D.NO. 7

GANGADHAR VARI STREET, REPALLE, GUNTUR DISTRICT.

MOPARTHY RAMESH KUMAR, S/O CHANDRA PAUL, AGED ABOUT

49 YEARS. EMPLOYEE, R/O D.NO. 20 -651, DONEPUDI ROAD,

KOLLURU GUNTUR DISTRICT.

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CRP No.3456 of 2025

IN THE HIGH COURT OF ANDHRA PRADESH

[3332]

THE HONOURABLE SRI JUSTICE RAVI CHEEMALAPATI

NARAYANA AGED

15-65/A, 10 TH

WARD, INDIRA NAGAR, REPALLE, GUNTUR DISTRICT.

...PETITIONER

KAPIL CHIT KOSTA PT LTD, ARUNDELPET BRANCH, GUNTUR,

REP. BY IT'S ASSISTANT DIVISIONAL MANAGER, T. SRINIVAS.

VADDE VENKATESWARA RAO, S/O RAGHAVA RAO, AGED ABOUT

75, GARIKAVARIPATI

STREET, 10TH WARD, REPALLE, GUNTUR DISTRICT.

ARAVA SANKARA RAO, , S/O KOTESWARA RAO, AGED ABOUT 58

17, KUNCHANAPUDI POST,

BHAVIREDDY NAGESWARA RAO, S/O VENKATA RAMAIAH, AGED

108, YELETI PALEM,

BORA MAYDIGAPALLI NAGARAM MANDAL, GUNTUR DISTRICT.

VENKATESWARA RAO, S/O RADHA KRISHNA MURTHY,

AGED ABOUT 56 YEARS. EMPLOYEE, R/O D.NO. 1 -17/6, LST

WARD, CHERUKUPALLI POST AND MANDAL, GUNTUR DISTRICT.

VEMULAPALLI KUTUMBA RAO, , S/O NAGESWARA RAO, AGED

ABOUT 58 YEARS, FINANCE BUSINESS, R/O D.NO. 7 -12-11/A,

GANGADHAR VARI STREET, REPALLE, GUNTUR DISTRICT.

MOPARTHY RAMESH KUMAR, S/O CHANDRA PAUL, AGED ABOUT

651, DONEPUDI ROAD,

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8. THE ASSISTANT ACCOUNTS OFFICER, ELECTRICITY REVENUE

OFFICER VENGALA REDDY NAGAR, SATTENPALLI (PO,MD)

PALANADU DISTRICT

...RESPONDENT(S):

Petition under Article 227 of the Constitution of India,praying that in the

circumstances stated in the grounds filed herein,the High Court may be

pleased to aggrieved by the issuance of warrant of attachment of salaries

dated 29.10.2025 passed in E.P No. 216 of 2025 in Dispute No. 41 of 2018

on the file of the Court of Learned I Additional Junior Civil Judge (Junior

Division), Guntur,

IA NO: 1 OF 2025

Petition under Section 151 CPC praying that in the circumstances stated

in the affidavit filed in support of the petition, the High Court may be pleased

to dispense with the filing of the Certified Copy of the salary attachment

warrant Dt. 29.10.2025 passed in E.P No. 216 of 2025 in Dispute No. 41 of

2018 on the file of the Court of Learned I Additional Junior Civil Judge /Junior

Division), Guntur, and pass

IA NO: 2 OF 2025

Petition under Section 151 CPC praying that in the circumstances stated

in the affidavit filed in support of the petition, the High Court may be pleased

to grant stay of operation of salary attachment warrant Dt. 29.10.2025 passed

in E.P No. 216 of 2025 in Dispute No. 41 of 2018 on the file of the Court of

Learned I Additional Junior Civil Judge /Junior Division), Guntur, pending

disposal of the main CRP and to pass

Counsel for the Petitioner:

1. KOLLURI ARJUN CHOWDARY

Counsel for the Respondent(S):

1. SIREESHA RANI VALLABHANENI

RESERVED ON 23.03.2026

PRONOUNCED ON 28.04.2026

UPLOADED ON 28.04.2026

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CRP No.3456 of 2025

3

ORDER

This Civil Revision Petition is filed questioning the legality and

correctness of the warrant of attachment of the salary dated 29.10.2025

issued in E.P.No.216 of 2025 in Dispute No.41 of 2018 by learned I Additional

Civil Judge (Junior Division), Guntur.

2. The petitioner is award-debtor No.7; respondent no.1 is the Award-

Holder, respondent nos. 2 to 7 are award-debtor Nos.1 to 6 in E.P.No.216 of

2015 whereas respondent no.8 is the garnishee.

3. The facts that led to filing of this Civil Revision Petition, in brief, are

that respondent no.1 filed Dispute Case No.41 of 2018 before the Registrar of

Chits, Guntur, under Section 64 of the Chit Fund Act, 1982 for recovery of

Rs.6,09,555/- and the Deputy Registrar of Chits, Guntur passed award

21.03.2025. On the ground that the award amount was not paid, the

respondent no.1/award-holder filed E.P.No.216 of 2015 for attachment of the

salary of the petitioner. The executing court issued warrant of attachment of

the salary of the petitioner and the said order has been assailed before this

Court.

4. Heard Sri Kolluri Arjun Chowdary, learned counsel for the petitioner,

Sri N.Krishna Sai, learned counsel, representing Ms. Sireesha Rani

Vallabhaneni, learned counsel for respondent no.1.

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5. Sri Kolluri Arjun Chowdary, learned counsel for the petitioner, while

reiterating the grounds of the Civil Revision Petition would contend that

though the principal debtor is solvent and available, the decree holder without

making any effort to recover the decretal due and without exhausting the

remedies available against him, had straightaway proceeded against the

surety, and hence the warrant of attachment of salary is premature and

therefore is liable to be set aside. He would further contend that as per

Sections 128 to 145 of the Indian Contract Act, 1872, the liability of the surety

is co-extensive but not primary and hence without proceeding against the

principal debtor initiation of execution proceedings against the surety,

bypassing the principal debtor, is abuse of process. He would further contend

that Section 71 of the Chit Fund Act, read with Rule-55 of the A.P.Chit Fund

Rules, 2008, clearly states that it is only the Registrar who has to issue the

certificate referred to in the above provisions, even though the dispute has

been decided by Deputy Registrar, however, in the instant case, the Deputy

Registrar issued the certificate instead of Registrar and on the ground also

issuance of warrant of attachment of salary based on the certificate issued by

the Deputy Registrar is untenable and the same has to be set aside. He would

further contend that the petitioner being a surety only but not the prized

subscriber and as the provisions of the Chit Fund Act, 1982 and the Andhra

Pradesh Chit Fund Rules, do not provide any safeguards to the surety at the

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time of contesting the award as well as execution proceedings and as the Act

nowhere envisages as to securing of the chit fund amount from the collateral

other than the prized subscriber, and permitting the chit fund company to

proceed against the surety without making efforts to recover the amount from

the prized subscriber would lead to collusion between the Chit Fund Company

and prized subscriber to the detriment of the surety.Accordingly, prayed to

allow the Civil Revision Petition.

In support of his contentions, the learned counsel for the petitioner relied

on the decision in Punyamurthula Venkata Viswa Sundara Rao v.

Margadarsi Chit Fund Pvt. Ltd., and others

1

and the docket proceedings

dated 19.04.2022 of a Division Bench of this Court in Civil Revision Petition

No.604 of 2022.

6. On the other hand, Sri N.Krishna Sai, learned counsel, representing

Ms.Sireesha Rani Vallabhaneni, learned counsel for respondent no.1 while

reiterating the contents of the affidavit filed in support of the Execution

Petition before the executing Court would contend that it is fairly settled that

the liability of the guarantor/surety is coextensive with that of the debtor and

that the liability of a surety is immediate and is not deferred until the credit

exhausts his remedies against the principal debtor, the contentions raised by

1

. 2017(3) ALD 387

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CRP No.3456 of 2025

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the learned counsel for the petitioner that the award-holder cannot proceed

against the surety until he exhausts all the remedies available against the

prized subscriber is untenable and is liable to be rejected. She would further

contend that the State Government vide G.O.Ms.No.1472, Revenue (Reg.II)

dated 10.12.2008 by exercising powers conferred by Section 61(1) of the Chit

Fund Act, 1982 appointing Deputy Registrars for the purpose of discharging

the duties imposed upon the Registrar by or under the said Act, therefore,

since section 2(o) of the Act which defines ‘Registrar’ also includes Deputy

Registrar appointed under Section 61, the Deputy Registrar is empowered to

issue certificate as envisaged under clause (a) of Section 71 of the Act. She

would further contend that a harmonious reading of section 2(o) and clause

(a) of Section 71 of the Act would make the things clear that since the

Government by exercise of powers conferred under Section 61(1) of the Act

appointed Deputy Registrars for the purpose of discharging all the duties of

the Registrar imposed under the Act, such Deputy Registrar is empowered to

issue certificate and such a certificate be deemed to be a decree of civil Court.

She would further contend that the word ‘Registrar’ appearing in Rule 55(3) of

the Rules, 2008 has to be interpreted in the same manner as defined in

Section 2(o) of the Act, which include Deputy Registrar also and therefore,

deputy Registrar to whom a delegation has been made under section 61(1) of

the Act will be entitled under Rule 55(3) to issue a certificate of recovery. She

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would further contend in view of issuance of G.O.Ms.No.1472, dated

10.12.2008 by the Government appointing Deputy Registrars of the chit; a

combined reading of Sections 2(o), 61(1), 71(a) of the Act and Rule 55(3) of

the Rules make it evident that the Deputy Registrar to whom a delegation has

been made under Section 61(1) of the Act can issue recovery certificate,

which is deemed to be a decree of a civil Court, as specified in Section 71(a)

of the Act and Rule 55(3) of the Rules. She would further contend that there

is neither infirmity nor jurisdictional error as sought to be projected by the

learned counsel for the petitioner in issuing warrant for attachment of salary

of the award-debtor and the Civil Revision Petition being lack of merit

deserves dismissal. Accordingly, prayed to dismiss the Civil Revision Petition.

In support of her contentions, the learned counsel relied upon the

decision of Division Bench of unified state of Andhra Pradesh in Madamanchi

Anil Kumar vs. Margadarshi Chit fund Pvt. Limited, represented by

its Managing-cum-Foreman, Robertsonpet and others

2

.

7. In reply, learned counsel for the petitioner would contend that in the

decision relied on by the respondent, the division bench refused to follow the

earlier division bench decision relied on by the petitioner of equal strength

and in such a situation this Court should follow the earlier decision and

2

.2018 SCC OnLine Hyd 2210

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CRP No.3456 of 2025

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therefore, the view expressed in the decision relied on by the petitioner that

Deputy Registrar is incompetent to issue Certificate and consequently the

execution petition filed based on such invalid certificate has to be set aside.

In support of his contentions, the learned counsel for the petitioner

relief on the decisions in National Insurance Company Limited vs.

Pranay Sethi and others

3

and Union Territory of Ladakh and others

vs. Jammu and Kashmir National Conference, through its General

Secretary and another

4

.

8. Perused the material available on record and considered the

submissions made by learned counsel for the parties.

9. In the instant case, the Deputy Registrar of Chits, Guntur decided the

dispute and has also issued recovery certificate. The competence of the

Deputy Registrar to issue recovery certificate is under severe challenge in the

instant case.

10. The provisions of the Chit Funds Act, 1982 and the Andhra Pradesh

Chit Fund Rules, 2008 that germane for consideration are extracted

hereunder:

3

. (2017) 16 SCC 680

4

(2024) 18 SCC 643

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66. Settlement of disputes.—(1) If the Registrar is satisfied that any

matter referred to him or brought to his notice is a dispute within the

meaning of section 64, he shall, subject to such rules as maybe

prescribed, settle the dispute himself, or refer it for disposal to a person

appointed by him (hereafter in this Chapter referred to as the nominee).

(2) Where any dispute is referred under sub-section (1) for settlement to

the nominee, the Registrar may, at any time for reasons to be recorded

in writing, withdraw such dispute from the nominee and may settle the

dispute himself, or refer it again for settlement to any other nominee

appointed by him.

71. Money how recovered .—Every order passed by the Registrar or

the nominee under section 68 or section 69 and every order passed by

the State Government in appeal under section 70 for payment of any

money shall, if not carried out,—

(a) on a certificate issued by the Registrar, be deemed to be a decree of

a Civil Court, and shall be executed in the same manner as a decree of

such Court, or

(b) be executed in accordance with the provisions of any law for the time

being in force for the recovery of amounts as arrears of land revenue:

Provided that no application for execution under clause (b) shall be made

after the expiry of three years from the date fixed in the order, and if no

such date is fixed, from the date of the order.

11. As per section 66 of the Act, the Registrar can settle the dispute

himself, or refer it for disposal to a person appointed by him. As per Section

71(a) of the Act, every order passed by the Registrar or the nominee shall, if

not carried out, on a certificate issued by the Registrar, be deemed to be a

decree of a Civil Court, and shall be executed in the same manner as a decree

of such Court.

12. Section 2(o) which defines Registrar reads thus:

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“(o) “Registrar” means the Registrar of Chits appointed under section

61, and includes an Additional, a Joint, Deputy or an Assistant Registrar

appointed under that section.”

13. Therefore, Additional, Joint, Deputy or an Assistant Registrar

appointed under Section 61 come within the sweep of the word ‘Registrar’ for

the purpose of this Act.

14. Reading of Sections 66 and 71 of the Act in light of the definition of

Registrar given in section 2(o) of the Act would indicate that Additional, Joint,

Deputy or an Assistant Registrar appointed under Section 61 of the Act are

empowered to issue certificate as envisaged under Section 71(a) of the Act.

Further there is a difference between the expanded term of Registrar by

inclusion of Joint, Assistant and Deputy Registrar and a nominee appointed by

a Registrar for settlement of dispute as per section 66 of the Act. A nominee

appointed by Registrar for settlement of dispute not being a Registrar, the

award passed by him is inexecutable unless upon the certificate issued by the

Registrar as required under section 71(a) of the Act.

15. In Punyamurthula Venkata Viswa Sundara Rao (supra 1)

relied on by the learned counsel for the petitioner, a division bench of this

Court held thus:

“17. There is another aspect which needs to be clarified. Though no

argument was advanced in that regard, it would be better for us to

clarify the said aspect, so as not to leave scope of another round of

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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 71 and

also Rule 55 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 71 says that the registrar or his nominee

can pass the award, clause (a) of Section 71 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.”

16. In view of the above observations, though the Deputy Registrar

decides the dispute, the Executing Court shall not accept the certificate

issued by the Deputy Registrar, but for the certificate issued by Registrar.

17. In the decision relied on by the learned counsel for the respondent

in Madamanchi Anil Kumar (supra 4), a Division Bench of this Court while

dealing with the contention regarding maintainability of the execution petition

on the certificate issued by the Deputy Registrar raised placing reliance on

Punyamurthula Venkata Viswa Sundara Rao (supra 1) held thus:

“13. We have two difficulties in accepting the contention of the learned

counsel for the petitioner. The first is that the ratio decidendi of any judgment

is to be found from what it lays down and not from what follows out of it. We

have seen the two points that arose for consideration in

PunyamurthulaVenkataViswaSundara Rao. Those two points formulated in

paragraph 9 of the decision, do not cover and do not even extend to the

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conclusion that the Division Bench reached in paragraph 18. In fact, it was

made clear in paragraph 18 that no argument was advanced in that regard.

Therefore, what was laid down in paragraph 18 of the judgment of the Division

Bench, cannot be taken as ratio decidendi of the said decision.

14. The second difficulty that we have is that certain statutory provisions and

certain Government Orders were not placed before the Division Bench in

PunyamurthulaVenkataViswaSundara Rao. Section 2(o) of the Chit Funds Act,

1982 defines the word “Registrar to mean the Registrar of Chits appointed

under Section 61. Section 2(o) goes further to say that the word “Registrar

would also include an Additional, a Joint, a Deputy or an Assistant Registrar

appointed under Section 61. This definition was not noted by the Division

Bench in PunyamurthulaVenkataViswaSundara Rao. Section 61 of the Act

speaks about the appointment of the Registrar and other officers. Sub-section

(1) of Section 61 reads as follows:

“The State Government may, by notification in the Official Gazette, appoint a

Registrar of Chits and as many Additional, Joint, Deputy and Assistant

Registrars as may be necessary for the purpose of discharging the duties

imposed upon the Registrar by or under this Act.”

15. Section 61(1) has two limbs. Under the first limb, the State Government is

empowered to appoint a Registrar of Chits by a notification in the Official

Gazette. By the second limb, the State Government is empowered to appoint

as many Additional, Joint, Deputy and Assistant Registrars, for the purpose of

discharging the duties imposed upon the Registrar by or under the Act.

Therefore, it is clear that there was power of delegation available for the State

Government to appoint Additional, Joint, Deputy and Assistant Registrars for

the purpose of discharging the duties imposed upon the Registrar by or under

the Act.

16. Section 66 of the Act speaks about the settlement of disputes. Under sub-

section (1) of Section 66, the Registrar is entitled to settle any dispute either

by himself or refer the dispute for disposal to a person appointed by him. The

person to whom the Registrar refers the dispute for disposal is called as “the

nominee”. Sub-section (1) of Section 66 reads as follows:

“If the Registrar is satisfied that any matter referred to him or brought to his

notice is a dispute within the meaning of section 64, he shall, subject to such

rules as may be prescribed, settle the dispute himself, or refer it for disposal to

a person appointed by him (hereinafter in this Chapter referred to as the

nominee.)”

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17. Where the petitioner has actually fallen into a trap is to mix up the power

of delegation available under Section 61(1) with the power of nomination

available under Section 66(1). The power of delegation under Section 61(1) is

available only with the Government, whereas the power of nomination merely

to decide a dispute, is with the Registrar under Section 66(1). Secondly, the

delegation under Section 61(1) is only upon Additional, Joint, Deputy or

Assistant Registrars. But a nomination under Section 66(1) could be upon any

person. Thirdly, the delegation under Section 61(1) is of all the duties imposed

upon the Registrar. On the contrary, the nomination under Section 66(1) is

only for settling a dispute. Fourthly, the delegation under Section 61(1) can be

ordered only by a notification issued in the Official Gazette. But the nomination

under Section 66(1) cannot be and need not be by publication in the Official

Gazette.

18. Unfortunately, the Division Bench in paragraph 18 of the report in

PunyamurthulaVenkataViswaSundara Rao has mistaken the power of

nomination available to the Registrar under Section 66(1) to be a power of

delegation. The meaning to be assigned to the word “Registrar appearing in

Rule 55(3), was not considered by the Division Bench in

PunyamurthulaVenkataViswaSundara Rao.

19. Rule 55(3) of the Rules reads as follows:

“(3) On receipt of such application for execution, the Registrar shall forward

the same to the proper authority for execution along with a certificate issued

by him under section 71 of the said Act and a proclamation issued under rule

54 in the manner prescribed therein.”

20. The Chit Fund Rules, 2008 do not define the word “Registrar. The

definition part of the Rules contains only five words and expressions. After

defining five words and expressions in Rule 2, it is stated in Rule 2 itself that

the words and expressions not defined in the Rules shall have the same

meaning as assigned to them in the Act. Therefore, the word “Registrar

appearing in Rule 55(3) has to be interpreted in the same manner as is defined

in Section 2(o) of the Chit Funds Act, 1982. If this is done, it will be clear that

any Additional, Joint, Deputy or Assistant Registrar to whom a delegation has

been made under Section 61(1) will be entitled under Rule 55(3) to issue a

certificate of recovery. If the Government, by a notification in the official

Gazette, issued under section 61(1), can appoint a Deputy Registrar or

Assistant Registrar to perform all the duties of the post of Registrar, he

becomes empowered automatically to issue a certificate of recovery under rule

55 also. The expression used in section 61(1) is “all the duties”.

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18. Upon the above analysis of various provisions of the Act, the Division

Bench further held thus:

“21.Unfortunately,-

(i) the distinction between delegation under Section 61(1) and nomination

under Section 66(1);

(ii) the definition of the expression “Registrar under Section 2(o);

(iii) the interpretation to be given to the word “Registrar in Rule 55(3) read

with the definition clause in Rule 2 of the Rules; and

(iv) the availability of the Gazette notifications containing delegation of

powers, were all not placed before the Division Bench, which decided

PunyamurthulaVenkataViswaSundara Rao. Hence, the decision in

PunyamurthulaVenkataViswaSundara Rao cannot be taken to be an

authoritative pronouncement on the question as to who is competent to issue

a certificate of recovery.

19. It is further held in later part of the order after extracting section

71 of the Act in the following terms:

“23. Clause (a) of Section 71 speaks about a certificate issued by the

Registrar. The word “Registrar appearing in Section 71(a) has also to be given

the same meaning as found in Section 2(o). Therefore, we hold that if any

Additional, Joint, Deputy or Assistant Registrar has been appointed by the

State Government, by a notification in the official gazette, to perform all the

duties dischargeable by the Registrar under the Act, then such a delegate will

be competent to issue a certificate of recovery. It is not correct to say that

the Registrar of Chits alone is competent to issue a certificate of recovery.

20. The above decision further states that G.O.Ms. No. 1472, Revenue

(Regn.II), dated 10-12-2008 issued by the State of Andhra Pradesh in

exercise of the powers conferred by Section 61(1) of the Chit Funds Act,

1982. reads as follows:

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“In exercise of the powers conferred by sub-section (1) of Section 61 of

the Chit Funds Act, 1982 (Central Act 40 of 1982) the Governor of

Andhra Pradesh hereby appoints the Commissioner and Inspector

General of Registration and Stamps, A.P., Hyderabad as Registrar of

Chits, the Additional Inspector General-I, Office of the Commissioner and

Inspector General of Registration and Stamps, A.P., Hyderabad as

Additional Registrar of Chits, the Joint Inspector General-I, Office of the

Commissioner and Inspector General of Registration and Stamps, and

the Deputy Inspector General of their respective zones as Joint

Registrars of Chits, the Assistant Inspector General (Chits) Office of the

Commissioner and Inspector General of Registration and Stamps and the

District Registrars of Registration Districts in the State of Andhra Pradesh

as Deputy Registrars of Chits and the Chit Registrars as Assistant

Registrars of Chits within the limits of their respective jurisdiction for the

purpose of discharging the duties imposed upon the Registrar by or

under the said Act as the case may be.”

21. It is further held thus:

“26. It must be noted that Section 61(1) carefully uses the phrase “the duties

imposed upon the Registrar by or under the said Act ”. The duties

enumerated in the Act are those imposed by the Act. The duties

enumerated in the Rules are those imposed under the Act . Therefore,

Rule 55(3) has to be read only in this manner and not in any other manner.

27. Thus, it is clear that the only contention raised by the petitioner based

upon the judgment of this Court in PunyamurthulaVenkataViswaSundara Rao is

bound to fail. Accordingly, it fails, and the Civil Revision Petition is

dismissed……..”

22. In the above decision the Division Bench held that there is a

distinction between delegation under section 61(1) and nomination under

Section 66(1) of the Act; that the definition Registrar under section 2(o)

includes Assistant, Joint and Deputy Registrars appointed under Section 61(1)

of the Act for discharging the duties imposed under the Act, since issuance of

certificate under section 71(a) of the Act is also one of the duties imposed

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under the Act, the Deputy Registrar is empowered to issue Certificate of

Recovery as per Section 71(a) of the Act.

23. In view of the observations made in the aforementioned decision,

the Deputy Registrar having been delegated to discharge the duties of the

Registrar by the Government under Section 61(1) of the Act and not being a

nominee as referred to under section 66 of the Act is empowered to issue

certificate for recovery, which is deemed to be a decree of a civil Court.

24. In the decision relied on by the learned counsel for the petitioner in

Union Territory of Ladakh and others (supra 4), the Hon’ble Supreme

Court held thus:

“35. We are seeing before us judgments and orders by the High Courts not

deciding cases on the ground that the leading judgment of this Court on this

subject is either referred to a larger bench or a review petition relating

thereto is pending. We have also come across examples of High Court

refusing deference to the judgments of this Court on the score that a later

coordinate Bench has doubted its correctness. In this regard, we lay down the

position in law. We make it absolutely clear that the High Courts will proceed

to decide matters on the basis of the law as it stands. It is not open, unless

specifically directed by this Court, to await an outcome of a reference or a

review petition, as the case may be. It is also not open to a High Court to

refuse to follow a judgment by stating that it has been doubted by a larger

coordinate Bench. In any case, when faced with conflicting judgments of

Benches of equal strength of this Court, it is the earlier one which is to be

followed by the High Courts, as held by a 5-Judge Bench in National

Insurance Co.Ltd. v. PranaySethi. The High Courts, of course, will do so with

careful regard to the facts and circumstances of the case before it.”

25. The ratio decidendi (reason for deciding) of a judgment is the

binding legal principle applied to the material facts, not the final order, obiter

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dicta, or logical deductions following from it. It is the essential legal rationale

directly deciding the dispute, distinguished from mere observations or

extended consequences.

26. In Para 17 of the decision relied on by the learned counsel for the

petitioner, clearly states that the Division Bench itself had taken up the issue

and reached to the conclusion that Deputy Registrar cannot issue Certificate,

even though no argument was advanced in that regard. Therefore, the same

cannot be taken as ratio decidendi of the said decision.

27. The proposition that an issue must be clearly argued and brought to

the notice of the court for the resulting decision to constitute ratio decidendi

is a fundamental principle of the law of precedents. A decision that is not

based on a reasoned argument on a contested legal issue is generally

considered obiter dicta or made per incuriam (through lack of care), and thus

lacks binding authority.

28. Further, the ratio decidendi is the binding legal principle established

only when a specific issue is actively argued, analyzed, and necessary for the

court’s ruling. Without focused arguments and hearing, a court lacks the

insight to establish binding precedent, leaving observations as non-binding

obiter dicta. As already stated that since the decision was reached without

there being any argument in that regard, the Division Bench in the decision

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CRP No.3456 of 2025

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relied on by the learned counsel for the petitioner did not have the

opportunity of knowing all the insights of the scheme of the Act and the

Government Order issued by the State Government appointing Deputy

Registrar by exercising the power conferred upon it by Section 61(1) of the

Act for the purpose of discharging the duties imposed upon the Registrar by

or under the Act. Therefore, the observations made by the Division Bench in

the earlier decision cannot be taken as ratio decidendi. Therefore, the

observations made in the decisions relied on by the learned counsel for the

petitioner on this aspect cannot be made applicable to the facts of the case on

hand.

29. The next argument of the learned counsel for the petitioner that the

award-holder ought not to have proceeded against surety without first

exhausting remedies against the prized subscriber, does not merit for

consideration in view of the catena of judgments of the Hon’ble Supreme

Court including in State Bank of India v. Saksaria Sugar Mills Limited and

others

5

that the liability of the surety is immediate and is not deferred until

the creditor exhausts his remedies against the principal debtor.

30. The further contention that the Chit Funds Act, 1982 and the

A.P.Chit Fund Rules, 2008 did not provide enough safeguards to the sureties

5

. AIR 1986 SC 868

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and further the Act does not envisage securing of money from the sureties

but for against the prized subscriber, also do not merit consideration, since

the prized subscriber was permitted to withdraw the amount only on the

guarantee given by the sureties. The tentative view expressed by a division

bench of this Court in CRP No.604 of 2022 regarding lack of safeguards to

sureties in the original as well as execution proceedings and that the Act does

not provide for securing the chit fund amount by any collateral from the

person i.e. prized subscriber, cannot be taken into consideration till it was

decided on merits.

31. In view of the observations made in the decisions referred to above

and the discussion made supra, the Civil Revision Petition being meritless

deserves dismissal.

32. Accordingly, the Civil Revision Petition is dismissed. There shall be

no order as to costs.

Pending miscellaneous petitions, if any, shall stand closed.

_________________________

JUSTICE RAVI CHEEMALAPATI

28

th

April, 2026. RR