Lakshmy Amma Devaki Amma vs Umayamma Karthiyayani

K.G. Balakrishnan, J.—The decree-holder in O. S. No. 31 of 1980 on the file of the Sub-Court, Kottarakara, is the revision petitioner. The revision petitioner was a subscriber to a kuri conducted by the respondent. She paid 37 instalments and bid the kuri and demanded the chitty amount from the foreman. The respondent foreman did not pay the amount. The revision petitioner filed a suit for the realisation of the amount and the suit was decreed and E. P. No. 7 of 1981 was filed for realisation of the amount. The revision petitioner filed E. A. No. 146 of 1981 for attachment of the security amount in the hands of the Registrar of Chitties. Notice was served on the garnishee, the Registrar of Chitties. The Registrar of Chitties filed objection stating that in view of Section 15(3) of the Kerala Chitties Act, 1975, the security amount is not liable to be attached by a civil court in execution of a decree. The court below accepted the objection and dismissed the execution application. Revision is directed against that order.

Learned counsel for the revision-petitioner contended that the revision petitioner is only a subscriber to whom amounts are payable by the foreman and by virtue of Section 39 of the Chitties Act, there shall be a first charge on the security amount for the payment of the chitty debts due to subscribers and, therefore, the amount lying as security in the hands of the Registrar is liable to be attached in pursuance of the decree passed against the foreman and the prohibition contained in Section 15(3) is applicable only in respect of decrees obtained by strangers.

Section 15(3) of the Chitties Act reads as follows:

" 15(3). The security given by the foreman under Sub-section (1) or any security substituted under Sub-section (6) shall not be liable to be attached in execution of a decree or otherwise until the chitty is terminated and the claims of all the subscribers are fully satisfied."

On a close scrutiny of the section, it is clear that the prohibition in respect of attachment is applicable only in respect of decrees obtained by strangers, otherwise the words " until the chitty is terminated and the claims of all subscribers are fully satisfied " may not have any significance. From the above section, it is clear that Section 15(3) has been enacted to protect the interests of the subscribers of the chitty. If amounts are due from the foreman, the subscribers who have obtained a decree can very well proceed against the security amount. That is evident from the scheme of the Chitties Act. If there are too many claimants, the subscribers would be entitled to get a rateable distribution.

Section 39 of the Chitties Act says that where there are debts due from the foreman of a chitty in relation thereto and also other debts due from such foreman, the chitty assets shall be a first charge for payment of the chitty debts due to the subscribers. Rules 65 to 67 of the Chitties Rules, 1975, deal with the manner in which the security amount has to be disbursed after the termination of the chitty. Rule 65 says that the Registrar of Chitties shall, after the termination of the chitty and after satisfying himself that the claims of all subscribers who have demanded payment have been fully satisfied and in respect of non-prized defaulted subscribers, the amount due to them has been deposited in separate accounts in the approved bank, by the foreman and pledged with the Registrar of Chitties, order the release of the security furnished under Sub-section (6) of Section 15. Rule 65(1) says that the foreman shall make a declaration to the effect that no amount is due to any of the subscribers and to the Government and then only he can file an application for release of the security and the Registrar can release the security only if he is satisfied that no amount is due to the subscribers. The foreman of the chitty also shall furnish a detailed statement regarding the outstanding claims of all the subscribers. From a reading of Sections 15 and 39 of the Kerala Chitties Act and Rules 65 to 67 of the Kerala Chitties Rules, 1975, it is clear that the subscribers have got the right to enforce a charge on the security amount.

In this case, the revision petitioner has obtained a decree against the foreman and execution petition has been filed against him. The decree-holder is definitely entitled to proceed against the security amount. The dismissal of the application for attachment is illegal. The Registrar of Chitties shall furnish a statement to the court below and inform the court as to whether any amount is available for payment towards the amount due to the decree-holder. Incase there are other claimants, the revision petitioner, decree-holder, would be entitled only to rateable distribution. The garnishee shill furnish details to the court below and the revision petitioner is directed to proceed against the security amount.

The civil revision petition is allowed. No costs.