Chit Funds Act | Deputy Registrar Can Issue Recovery Certificate Executable As Civil Court Decree: AP High Court

The Andhra Pradesh High Court has held that a Deputy Registrar appointed under Section 61(1) of the Chit Funds Act is empowered to issue recovery certificates under Section 71(a) and such certificates are deemed to be decrees of a civil court executable in the same manner as civil court decrees. While interpreting the statutory framework governing the powers of the Registrar under the Act, the Court clarified the scope of authority exercisable by Deputy Registrars appointed under Section 61(1).Justice Ravi Cheemalapati delivered the judgment while dismissing a petition challenging the validity of a recovery certificate issued by the Deputy Registrar and the consequent salary attachment warrant issued in execution proceedings arising out of a chit fund dispute.In this context, the Court examined Sections 2(o), 61(1), 66 and 71(a) of the Chit Funds Act along with Rule 55(3) of the A.P. Chit Fund Rules, 2008, the Court noted that the definition of “Registrar” includes Deputy Registrars appointed under Section 61(1). The Court also distinguished a Deputy Registrar appointed to discharge statutory duties from a “nominee” appointed under Section 66(1) merely for settlement of disputes. Clarifying the statutory scheme, the Court observed:“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 under the Act, the Deputy Registrar is empowered to issue Certificate of Recovery as per Section 71(a) of the Act. 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.”The dispute arose out of chit transaction proceedings in which the petitioner had stood as a surety for the prized subscriber. Following default in repayment of the chit amount, recovery proceedings were initiated and a recovery certificate was issued by the Deputy Registrar under Section 71(a) of the Act, pursuant to which a salary attachment warrant was issued in execution proceedings. Aggrieved by the same, the petitioner approached the High Court questioning the competence of the Deputy Registrar to issue the certificate.The principal contention raised by the petitioner was that only the Registrar was competent to issue recovery certificates under Section 71(a) and that the proceedings initiated on the basis of the certificate issued by the Deputy Registrar were without authority of law.While dealing with the precedents cited by the parties, the Court followed Madamanchi Anil Kumar vs. Margadarshi Chit Fund Pvt. Limited, represented by its Managing-cum-Foreman, Robertsonpet & Ors, 2018, which had comprehensively examined the statutory provisions and upheld the competence of Deputy Registrars to issue recovery certificates under Section 71(a) of the Act.Holding that the Deputy Registrar was competent to issue the recovery certificate and finding no jurisdictional error in the execution proceedings initiated on its basis, the High Court dismissed the Civil Revision Petition as meritless.Case Title: Kambala Venkata Rama Rao v. Kapil Chit Kosta Pvt. Ltd. & Ors.Case Number: Civil Revision Petition No. 3456 of 2025Counsel for Petitioner: Kolluri Arjun ChowdaryCounsel for Respondent(s): Sireesha Rani VallabhaneniClick Here To Read/Download Order

Chit Funds Act | Deputy Registrar Can Issue Recovery Certificate Executable As Civil Court Decree: AP High Court

Ritika Verma

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Ritika Verma

Chit Funds Act | Deputy Registrar Can Issue Recovery Certificate Executable As Civil Court Decree: AP High Court

Ritika Verma

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Ritika Verma

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