Garnishee order and Attachment Order- Concept

Garnishee order and Attachment Order

vGarnishee Order:  Order issued by court on the account of Judgement debtor who is the depositor of the bank.

-        Bank is called Garnishee.

vAttachment Order : This order is issued by government authority under section-226 of income tax Act or any other relevant Act.

-        A order is issued for recovery of government dues.

Ø Action of Bank :

-         Stop payment if balance is less than amount of order

-         All cheque issued by customer shall be return.

-         Bank will exercise right of set-off for recovery irregular loan if any.

·       Order is Applicable for account :

1.    Current Account

2.    Saving bank account

3.    Term Deposit (Mature & Un matured both)

4.    Credit balance in cash Credit or over draft

5.    Surplus Amount of FD where loan is give on security of FD.

6.    Account in the name of Deceased Person.

·       Order not Applicable on:

1.    Loan account or Loan remained

2.    Un availed balance in the loan account

3.    FD as collateral security

4.    Account in the name of insolvent person.

·       Amount on Which Order in applicable :

-         Garnishing order applicable on existing amount and not on Future credit.

-         Attachment order is applicable on existing amount as well as future credit.

·       Transaction wise  application of order:

-         Cheque debited but cash payment is not made – Order is applicable (Cheque reverse)

-         Cheque send in clearing, debited but clearing returning time still available – Order is applicable

-         Cheque send for collection or clearing and amount credited in account – Garnishee order is not applicable and Attachment order applicable only after realisation.

-         Cheque processed and deposited to credit account but customer did not withdraw – Order is applicable.

Ø  Condition for application of Order:

1.    Relationship : Bank – Debtor

                          Customer- Creditor

2.    Deposit Account and order in same name same capacity :

Order	Deposit	AO	GO
A	A	ü	ü
A	A(Trustee)	X	X
A	ABC Firm	X	X
ABC Firm	A	ü	ü
A & B	A	ü	ü
A	A & B	ü	X

ü  Priority in payment is given 1^st Attachment order and if Surplus then Garnishee Order