(SHOW CAUSE NOTICE BEFORE ADMISSION) IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI

TUESDAY, THE NINETEENTH DAY OF APRIL TWO THOUSAND AND TWENTY TWO : PRESENT:

THE HONOURABLE SRI JUSTICE AHSANUDDIN AMANULLAH

AND

THE HONOURABLE SRI JUSTICE GANNAMANENI RAMAKRISHNA PRASAD CIVIL REVISION PETITION NO: 604 OF 2022

Between:

G. Jagan Mohan Rao, S/o G. Krishna Murthy, Aged about 46 years, Prop: Krishna Satya General Store, D.No.1 1-5, Angalla Bazar, Bethamcherla, R/o 11-6, Main bazaar, Bethamcherla, Kurnool District.

Petitioner/Respondent/Judgment Debtor No.5 AND

• 1. M/s Margadarsi Chit Fund Pvt. Ltd, Ananthapur, Rep. by its Manager/Foreman. ...Respondent/Petitioner/Decree Holder
• 2. G. Aswani Kumar, S/o G. Subramanyam, Aged about 37 years, Prop Sri Madavi Mineral Industries, Kurnool road, Bethamcherla, R/o 4-203, Gayathri nagar, Main road, Bethamcherla, Kurnool District.
• 3. K. Damodara Chowdary, S/o K. Surya Narayana, Aged about 30 years, Prop Sri Gandadhara Marbles, Bethamcherla, R/o 4-286, Gayathri Nagar, main road, Bethamcherla, Kurnool District.
• 4. V. Swarna Latha, W/o V. Ravi Kumar, Aged about 37 years, Prop Sucharitha Marbles, Bethamcherla, R/o 4-363-6, Srinagar colony, Bethamcherla, Kurnool District.
• 5. R. Kasiwiswanath,, S/o R. Krishna Murthy Setty, Aged about 39 years, Contract works, D.No.7/18.1, Asarpeta, Bethamcherla, Kurnool District.

...Respondents/Respondents/Judgment Debtors No.1 to 4 (Respondents No.2 to 5 are not necessary parties to this present petition)

WHEREAS the Petitioner above named through his Advocate SRI VARUN BYREDDY presented this 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 present this Civil Revision Petition aggrieved by the Order dt. 29.11.2021 in E.P.No.1473 of 2017 in DRA No. 88/2015(Impugned Order) on the file of Special Judge for trial of cases under SCs and STs (POA) Act-cum-VI Additional Sessions Judge, Kurnool

AND WHEREAS the High Court upon perusing the petition and memorandum of grounds filed herein and upon hearing the arguments of Sri VARUN BYREDDY Advocate for the Petitioner, directed issue of notice to the Respondents herein to show cause as to why this CIVIL REVISION PETITION should not be admitted.

You viz:

• 1. The Manager/Foreman M/s Margadarsi Chit Fund Pvt. Ltd, Ananthapur.
• 2. G. Aswani Kumar, S/o G. Subramanyam, Prop Sri Madavi Mineral Industries, Kurnool road, Bethamcherla, R/o 4-203, Gayathri nagar, Main road, Bethamcherla, Kurnool District.
• 3. K. Damodara Chowdary, S/o K. Surya Narayana, Prop Sri Gandadhara Marbles, Bethamcherla, R/o 4-286, Gayathri Nagar, main road, Bethamcherla, Kurnool District.
• 4. V. Swarna Latha, W/o V. Ravi Kumar, Prop Sucharitha Marbles, Bethamcherla, R/o 4-363-6, Srinagar colony, Bethamcherla, Kurnool District.
• 5. R. Kasiwiswanath,, S/o R. Krishna Murthy Setty, D.No.7/18.1, Asarpeta, Bethamcherla, Kurnool District.

are directed to show cause either appearing in person or through an Advocate, as to why in the circumstances set out in the petition and the affidavit filed therewith (copy enclosed) this CIVIL REVISION PETITION should not be admitted,

The Court made the following: ORDER:

"(Per Hon'ble Mr. Justice Ahsanuddin Amanullah)

Heard Mr. Varun Byreddy, learned counsel for the petitioner.

2. The petition has been filed against the order dated 29.11.2011 passed by the Special Judge for trial of cases under SCs & STs (PoA) Act-cum-VI Additional Sessions Judge, Kurnool in E.P.No.1473 of 2017 arising out of D.R.A No.88 of $2015.$

3. The petitioner was one of the sureties in a chit fund organized by the respondent no.1, in which the prized subscriber was respondent no.2. The respondent no.2 was obliged to pay Rs.16,41,860/- (Rupees sixteen lakhs forty one thousand eight hundred and sixty) with interest at the rate of 18% p.a on the principal amount of Rs.15,00,000/- (Rupees fifteen lakhs) as per the order of the Deputy Registrar of Chits, Ananthapur, dated 20.12.2016. Due to non compliance of the same by the respondent no.2, respondent no.1 filed E.P.No.1473 of 2017, in which by the impugned order, the property belonging to the petitioner has been attached for satisfying the amount which was basically due against the respondent no.2.

4. Learned counsel for the petitioner submitted that the petitioner did not take any money and the same was taken by the respondent no.2 and without making any effort to recover the money from the person who actually received the money, moving against the petitioner for recovery of the amount, is arbitrary and iniquitous.

5. Having gone through the provisions of the Chit Fund Act, 1982 and Andhra Pradesh Chit Fund Rules, 2008, in the tentative view of the Court there appears to be lack of safeguards available to the surety at the time of contesting the award, as also in execution proceedings coupled with fact that the principle statute itself does not provide for securing of the chit fund amount in question by any collateral from the person, who actually receives the money, i.e., the prized subscriber and the rules being silent with regard to the procedural safeguards available to the surety at the time of the proceedings, and, further the issue of mala fide in the organizer selectively moving against the surety for recovery of the dues, which was availed by the prized subscriber, the same requires detailed hearing.

6. Issue notice to the respondents. In addition personal notice also be issued and proof of service filed within three (3) weeks.

7. In view of the larger question the Court proposes to go into, learned counsel for the petitioner is permitted to file an application for impleading the Union of India through the Secretary, Ministry of Finance, New Delhi, the Reserve Bank of India through its Governor and also the State of Andhra Pradesh through the Secretary, Department of Finance, as respondents during the same period.

Sd/- U. SRI DEVI ASSISTANT REGISTRAR

//TRUE COPY//

SECTION OFFICER

• 1. Special Judge for trial of cases under SCs and STs (POA) Act-cum-VI Additional Sessions Judge, Kurnool
• 2. The Manager/Foreman M/s Margadarsi Chit Fund Pvt. Ltd, Ananthapur.
• 3. G. Aswani Kumar, S/o G. Subramanyam, Prop Sri Madavi Mineral Industries, Kurnool road, Bethamcherla, R/o 4-203, Gayathri nagar, Main road, Bethamcherla, Kurnool District.
• 4. K. Damodara Chowdary, S/o K. Surya Narayana, Prop Sri Gandadhara Marbles, Bethamcherla, R/o 4-286, Gayathri Nagar, main road, Bethamcherla, Kurnool District.
• 5. V. Swarna Latha, W/o V. Ravi Kumar, Prop Sucharitha Marbles, Bethamcherla, R/o 4-363-6, Srinagar colony, Bethamcherla, Kurnool District.
• 6. R. Kasiwiswanath,, S/o R. Krishna Murthy Setty, D.No.7/18.1, Asarpeta, Bethamcherla, Kurnool District. (Addressee Nos.2 to 6 by RPAD- along with a copy of petition and affidavit)
• 7. The Secretary Union of India, Ministry of Finance, New Delhi.
• 8. The Governer, Reserve Bank of India
• 9. The Secretary, Department of Finance, State of AP.
• 10. Two spare copies

To,

HIGH COURT

AAJ $&$ GRKPJ

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DATED:19/04/2022

NOTICE BEFORE ADMISSION

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CRP.No.604 of 2022

INTERIM STAY