VEERESH H S/O HANUMANTHAPPA vs M/S KAPIL CHITS (K) PRIVATE LIMITED

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IN THE HIGH COURT OF KARNATAKA AT DHARWAD


TH
DATED THIS THE 6 DAY OF OCTOBER, 2026

BEFORE

THE HON'BLE MR. JUSTICE M.G.S. KAMAL

WRIT PETITION NO. 108016 OF 2026 (GM-CFA)

BETWEEN:

VEERESH H S/O HANUMANTHAPPA
AGE. 55 YEARS, OCC. GOVERNMENT EMPLOYEE,
R/O WARD NO.22, AMBEDKAR NAGAR, TALUR ROAD,
NEAR KANNADA NAGAR, BALLARI 583101.
…PETITIONER



(BY SRI. AL HUSSAIN SHALIBAN, ADVOCATE)

AND:

1. M/S KAPIL CHITS (K) PRIVATE LIMITED,
RD
NO.1336, 3 FLOOR,
NEAR BNADEMARAMMA BUS STAND,
TH ND TH
9 MAIN, 2 STAGE, 9 BLOCK, NAGARBHAVI,
BANGALORE 560075, BRANCH BELLARY.
R/BY ITS FOREMAN SRI. M. RANGANNA GOWDA.

2. D. HUSSAIN BASHA S/O D. ABDUL MAJEED
AGE. MAJOR,
R/O HOUSE NO.156/1, SHETTI COMPOUND,
OPP. TO D.A.R POLICE LINE,
SATYANARAYANA PETH, BELLARY.

3. K. GURUPRASAD S/O SHIVAMURTHY K
AGE. MAJOR,
R/O. MAHANANDHI KATTER, NEAR RAMA TEMPLE,
TH
18 MAIN, BELLARY.






K M
SOMASHEKAR
Digitally signed by K M
SOMASHEKAR
Location: HIGH COURT
OF KARNATAKA
DHARWAD BENCH

4. ABDUL MAMMED S/O. ADBUL MUKITH
AGE. MAJOR,
R/O. HOUSE NO.9, WARD NO.23,
COWL BAZAAR, BELLARY.
…RESPONDENTS
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF
CERTIORARI BY SET-A SIDING THE IMPUGNED COMMON ORDER

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VIDE-ANNEXURE-F1, PASSED BY PRL. CIVIL JUDGE AND JMFC
COURT, BALLARI IN EX.C NO.138/2023 DATED 06/02/2026 IN SO
FAR PETITIONER/JDR NO.3 IS CONCERNED IN THE EXERCISE OF
SUPERVISORY JURISDICTION AND ETC.

THIS WP COMING ON FOR PRELIMINARY HEARING, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE M.G.S. KAMAL

ORAL ORDER

1. The petitioner, who stood as a co-surety in a chit fund
transaction entered into between respondent No.1-decree
holder and respondent No.2-judgment debtor, is before
this Court being aggrieved by the order dated
06.02.2026, in terms of which the applications filed by
the petitioner herein under Section 151 of the Code of
Civil Procedure (for short ‘the CPC’), namely, I.A.Nos.1
and 2, have been rejected.

2. Learned counsel for the petitioner submits that the
Executing Court, while rejecting the applications, has not
adverted to the meaning and purport of the provisions of
Section 146 of the Indian Contract Act and has wrongly
applied the said provision, thereby making the petitioner
alone liable for payment of the entire due amount, while

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there is another co-surety who should also have been
made equally liable to make the payment.

3. Heard. Perused the records.

4. Pursuant to the proceedings initiated by respondent No.1
herein in Dispute No.37/2018-19, the Deputy Registrar of
Chits and Co-operative Societies, Ballari, passed an
award for a sum of ₹26,910/-, along with interest at 24%
per annum on the principal amount from 11.05.2018 till
the date of realisation, with costs of ₹.3,000/-.
A recovery certificate has also been issued as per
Annexure-B in the said proceedings. In the said
proceedings, the petitioner herein was arraigned as
respondent No.3, while respondent Nos.1 and 2 herein
were arraigned as respondent Nos.1 and 2, respectively.

5. The order passed by the Deputy Registrar is produced at
Annexure-A, which reads as under:
aÃn ¤¢üUÀ¼À G¥À ¤§AzsÀPÀgÀÄ ºÁUÀÆ ¸ÀºÀPÁgÀ ¸ÀAWÀUÀ¼À G¥À¤§AzsÀPÀgÀÄ, §¼Áîj f¯Éè, §¼Áîj
EªÀgÀ £ÁåAiÀiÁ®AiÀÄzÀ°è
ªÁådå ¸ÀASÉå: 37/2018.19

¥sÉÇÃgïªÀÄ£ï
PÀ¦¯ï amïì (PÀ£ÁðlPÀ) ¥ÉÊæ. °«ÄmÉqï,
2£Éà ªÀĺÀr, zÀÄUÀðªÀÄä UÀÄr ºÀwÛgÀ,
UÁA¢ü£ÀUÀgÀ, ªÀÄÄRå gÀ¸ÉÛ,
§¼Áîj.

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6. The recovery certificate is produced at Annexure-B, which
reads as under:
IN THE COURT OF DEPUTY REGISTRAR OF CHITS &
CO-OPERATIVE SOCIETIES, AT BELLARY

DISPUTE NO.37/2018-19

M/s Kapil Chits (K) Pvt Ltd.
ND
2 FLOOR, NEAR DURGAMMA TEMPLE,
GANDHINAGAR, MAIN ROAD,
Bellary-104.
Represented by its FOREMAN DISPUTANT

AND
OPPONENTS

1. D HUSSAIN BASHA. S/O. ABDUL MAZEED.
#D NO;156/1, SHETTY COMPOUND, OPP.DAR
POLICE LINE, S.N. PET, BELLARY (T&D).

2. K.GURU PRASAD S/O SHIVA MURTHY
# MAHANANDHI KATTER, NEAR RAMA
TH
TEMPLE, 18 MAIN, BELLARY (T&D).

3. H.VEERAIAH S/O HANUMATHAPPA,
# MAHANANDI, KOTTER TOLOR ROAD,
NEAR KONAL, BELLARY (T&D).

4. ABDUL MAMEED S/O ABDUL MUKITH,
# 9.W.P-23,C.B. BELLARY (T&D).

RECOVERY CERTIFICATE
(U/S 71(a) of the Chit Fund Act, 1982.)

This is to Certify that on 09/03/2021, an
award passed in the above dispute, thereby, it is
ordered that the opponents do pay jointly and
severally to the disputant, the total claim amount
Rs.26,910/-(Rupees Twenty Six Thousand Nine
Hundred and Ten Only) along with interest at 24%
per annum on the principal amount of Rs:11,073/-

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From 11/05/2018 to the date of its realization and
dispute cost Rs:3,000/-. In default of payments as
aforesaid, the said amount is ordered to be
recovered by sale of movable of Immovable
properties or by attachment of salaries or by any
other mode as per law.

Given under my hand and seal of the office on
17/08/2022

Sd/-
DEPUTY REGISTRAR OF CHITS.,
aÃn ¤¢üUÀ¼À ºÁUÀÆ ¸ÀºÀPÁgÀ ¸ÀAWÀUÀ¼À

G¥À ¤§AzsÀPÀgÀÄ, §¼Áîj.
BELLARY.


7. Thus, the respondents, including the petitioner herein,
have been made “jointly and severally” liable to pay and
discharge the said claim amount. There is no challenge
either to the award or to the recovery certificate till date,
and the same have attained finality.

8. Execution Petition in EP No.138/2023 has been filed by
respondent No.1 seeking execution of the said award and
recovery certificate. In the said execution proceedings,
the petitioner herein filed the applications as per
Annexure-F, seeking a direction to the employer of the
petitioner, namely, the Commissioner, City Municipal
Corporation, Ballari, to stop deducting the amount from

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his salary and for an order to release a sum of ₹24,271/-
in favour of the petitioner.

9. In the affidavit accompanying the said applications, it is
₹
contended that a total outstanding amount of 45,537/-
is due against all the three judgment-debtors, each being
equally liable to contribute and pay the outstanding
amount as contemplated in Section 146 of the Indian
Contract Act, 1872. Therefore, the liability of the
rd
petitioner was only to the extent of 1/3 of the
₹
outstanding in a sum of 15,179 /- only. As against the
₹
same, a sum of 39,450 /- has been deducted from the
salaries of the petitioner. Hence, the aforesaid two
application.

10. The Executing Court rejected the said applications holding
that the petitioner, being one of the judgment-debtors,
cannot evade his obligation to pay the decretal amount to
the decree-holder by pleading proportionate liability. It
also referred to the provision of Section 146 of the
Contract Act insisted by the petitioner and has found the
same inapplicable to the facts of the case. It has further

- 9 -
HC-KAR
NC: 2026:KHC-D:16540
WP No. 108016 of 2026


CNR: KAHC020168312026


taken into consideration provision of Section 140 of the
Contract Act, which entitles a surety to recover from the
principal debtor any payment made by him.

11. In view of the contents of the recovery certificate and the
provisions of law, and the petitioner being jointly and
severally liable to repay the amount, this Court do not
find any illegality in the order passed by the Executing
Court warranting interference.
dismissed
12. Accordingly, the petition is .

Sd/-
(M.G.S. KAMAL)
JUDGE


RHR/-CT:VP
LIST NO.: 1 SL NO.: 17