Garnishee orders and its attachments
Aftab4u
(Querist) 25 June 2012
This query is : Resolved
Dear Experts,
What is called a Garnishee order, and what are the amounts attachable and not attachable under garnishee order. Civil Court issued a garnishee order not to pay any amount till disposal of the Civl Case (Private chitfunds filed a case). and based on the order of the court from past 3years they dint paid to any one that amount includes the gratutity, leave enchashement etc.,Salary etc.,
Thanks in advance
SAINATH DEVALLA
(Expert) 26 June 2012
Power of Indian courts to issue Garnishee Order:
The word ‘Garnish’ is derived from an old French word ‘garnir’ which means to warn or to prepare . It is to serve an heir with notice i.e. to warn of certain debts that must be paid before the person is entitled to receive property as an heir.
Garnishee means a judgment-debtor’s debtor . He is a person or institution that is indebted to another whose property has been subject to garnishment. He is a person who is liable to pay a debt to a judgment debtor or to deliver any movable property to him. A third person or party in whose hands money is attached by process of court; so called, because he had garnishment or warning, not to pay the money to the defendant, but to appear and answer to the plaintiff creditor’s suit .
Garnisher is a judgment-creditor (decree-holder) who initiates a garnishment action to reach the debtor’s property that is thought to be held or owed by a third party.
A garnishee order is an order passed by an executing court directing or ordering a garnishee not to pay money to judgment debtor since the latter is indebted to the Garnisher (decree-holder) . It is an order of court to attach money or goods belonging to the judgment debtor in the hands of a third person. It is a remedy available to any judgment creditor; this order may be made by the court to holders of funds (3rd party) that no payments are to make until the court authorizes them. The third party is known as garnishee and the court order is known as garnishee order. The purpose of the order is to protect the interest of the creditors. An order served upon a garnishee requiring him not to pay or deliver the money or property of the debtor (defendant) to him and / or requiring him to appear in the court and answer to the suit of the plaintiff to the extent of the liability to the defendant
Suppose A owes Rs. 1000 to B and B owes Rs. 1000 to C. by a garnishee order the court may require A not pay money owed to him to B, but instead to Pay C, since B owes the said amount to C, who has obtained the order.
Suppose A owes B Rs 2,000/. A refuses to repay the amount to B and B sues A. He obtains a decree in his favor. Here B is a judgment-creditor and A is the judgment-debtor. B comes to know that A has some money in a bank account and would like to have his decree satisfied by attaching the funds in the hands of A's bank. For this purpose he approaches a court and obtains a Garnishee order attaching funds at the bank standing to the credit of A. In this e.g., A, is the garnishee and B is the Garnisher (Person who initiates action).
Order 21 Rule 46 A to 46 I have been newly inserted in the Code of Civil Procedure by the Amendment Act, 1976. They lay down the procedure in garnishee cases. Prior to amendment, opinion expressed by various Courts was that the Court had no power to compel a garnishee to pay debt in Court and in case a garnishee on appearance denied the debt, it was duty of the Court to enquire that if debt was due and when garnishee was held liable to pay, except on certain contingencies, it was not permissible to call upon him to pay the amount into Court . The object of newly inserted Rule 46A is to render the debt due by the debtor of the judgment debtor available in execution to the decree holder and not to drive him to a suit. The primary object of a garnishee order is to make the debt due by the debtor of the judgment debtor available to the decree holder in execution without driving him to the suit. The court may, in the case of debt (other than a debt secured by a mortgage or charge) which has been attached under Rule 46, upon the application of the attaching creditor, issue a notice to garnishee liable to pay such debt, calling upon him either to pay into court the debt due from him to the judgment debtor or so much thereof as may be sufficient to satisfy the decree and costs of execution, or to appear and show cause why he should not do so.
The order contemplated by Rule 46 A is discretionary and the court may refuse to pass such order if it is inequitable. The discretion, however, must be exercised judicially. Where the court finds that there is bona fide dispute against the claim and the dispute is not false or frivolous, it should not take action under this rule.
If money is payable to the judgment debtor on certain contingencies, the garnishee cannot be asked to make payment unless those contingencies have taken place. Similarly, garnishee proceedings cannot be taken in respect of a debt which cannot be attached under the code. Where the garnishee disputes his liability, the court must raise an issue, and determine the liability of the garnishee.
The payment made by the garnishee into the court pursuant to the notice shall be treated as a valid discharge to him as against the judgment debtor. The court may direct that such amount may be paid to the decree holder towards the satisfaction of the decree and costs of the execution.
Where neither the garnishee makes the payment into the court, as ordered, nor appears and shows any cause in answer to the notice, the court may order the garnishee to comply with such notice as if such order were a decree against him. The costs of the garnishee proceedings are at the discretion of the court. Orders passed in garnishee proceedings are appealable as Decrees.
