Garnishee Order

Defination of Garnishee Order

To put it simply, a garnishee order is a legal notice that allows a creditor or third party to recoup or retrieve funds from a debtor by means of a deduction from their salary or other sources of income. This means that your employer will pay your credit providers before your salary is paid to you. This also means that the creditors can retrieve their money from those who owe their debtors, as legally those finances are due to them. In this case it is a court order to the debtor directly, with no specified source, which is different to the emolument attachment order.

This order is issued in two parts. First the court directs the banker to stop payment out of the account of the called as ORDER NISI. On receipt of the confirmation of the banker court issued another order known as order absolute whereby the entire balance in the account or a specified amount is attached.

Full Course Videos in Hindi English
Check Here
————————————————————-
jaiib ppb short notes part 1
Check Here
————————————————————-
jaiib exam free study material
Check here
————————————————————-
jaiib study material pdf notes 2022
Get Tests Here
————————————————————-
how to prepare for ppb
Check Here

GARNISHI ORDER IS APPLICABLE
a. Where there is a credit balance
b. Attaches the amount drawn by a cheque but payment not yet effected.
c. All bank branches of a bank are treated as one entity.
d. Attaches future maturing term deposits also.
e. attaches joint account if issued so
f. Attaches personal account of partners if an order is served on a partnership account.

WHERE THE ORDER IS NOT APPLICABLE
a. Where a cheque has been marked for good payment.
b. Attaches the amount specified only
c. Not applicable to sanctioned limit.
d. Where any assignment of balance has been made and acknowledged
e. Not applicable to deceased and insolvents
f. Salary is not attached.
g. Bank can exercise the right of set off before complying with Garnishee Order.

The new law on garnishee order

In 2016, the Constitutional Court declared that the management of the garnishee order and that decisions of whether a salary should be attached by a garnishee order cannot be made by a clerk of the court, instead that decision is now put to the magistrate who should firstly look at whether it would be just and equitable to grant the EAO and whether the debtor would be able to afford it.

Basic questions based on Garnishee order

1) What are the legal implications of a garnishee order?

As a court judgment, the garnishee order may be enforced accordingly as a warrant of execution – this warrant means a bailiff of the court or in simple terms, a legal officer has the power to go to the debtor’s address and recoup goods to the value of the needed amount. The debtor can dispute the liability, however, this would require them to appear in court and show cause as to why the debt should not be paid.

2) Can the order be halted?

The court has the power to not only rescind (or cancel) the order, but also to amend and suspend the judgment of the order. However, the court is forced to cancel or amend the order if the debtor does not have the means to support themselves and their dependents and pay their debt as well.

Whether creditor or debtor, there are implications for both sides which allows the debt to be resolved as soon as possible.

3) How to cancel a garnishee order

A garnishee order can be rescinded (or cancelled) based on these grounds:
Lack of jurisdiction;
The judgement debtor did not consent to the issuing of the EAO or garnishee order and the court did not authorize the order;
The judgement debtor was not duly notified.

4)How long is a garnishee order valid for?

Before an emolument attachment order can be granted, a judgement would have been issued, which is valid for 30 years

5)Can a garnishee order be stopped?

A garnishee order can only be stopped by an application at the court to have the order stopped. It can also be stopped if the judgement creditor informs the employer or garnishee that they no longer need the money to be deducted from your salary.

 

 

 

Accounting & Finance for Banking

Principles & Practices of Banking Module E Pdf

Free
Module E PPB ePDFs available in our android app. Get them all at https://iibf.info/app

Accounting and Finance for Banking Module A Pdf

Free
Accounting and finance for bankers all ePDFs are available in our an app. Get them all at https://iibf.info/app

Accounting and Finance for Banking Module A Pdf

Free
Accounting and finance for bankers all ePDFs are available in our an app. Get them all at https://iibf.info/app

Leave a reply

Please enter your comment!
Please enter your name here

Learning Sessionshttps://iibf.info
Btech, JAIIB CAIIB and a tutor. Have taken more than 900+ hours online classes with more than 1,25,000 students

Popular

Free Live Classes

spot_img

More from author

What next after CAIIB? IIBF Certifications at a Glance

What next after CAIIB? 15 Certificate Exams in Finance and Banking useful for Bankers:: Introduction As per the IBA settlement, bankers who have passed JAIIB and CAIIB...

JAIIB Mega Mock Test for Free | Principles and Practices of Banking

ppb mock test:- Jaiib Exam 2020 dates will be announced soon for May 2020 by iibf. It is high time for preparing for all...

JAIIB Study Material Principles and Practices of Banking Live Class Previous Year Questions

https://www.youtube.com/watch?v=BG2s7lPiX9A Jaiib Study Material PDF Notes Papers Mock Tests - In this post you can get JAIIB Study Material PDF files as shared by other...

Principles and Practices of Banking – PPB Most important Questions

Hello friends, today in this article by the learning sessions we will share important questions and memory called topics of PPB that is principles...