RIGHT UNDER GARNISHEE

The term garnishee is derived form the Latin Word garnire which means to warn. in case a debtor fails to pay the money due to is creditor, the latter may apply to the court to issue a garnishee order, on the debtors banker. As a result of this order the debtors account with the bank is frozen and bank cannot make any payments out of the account. The creditor, on whose request such an order is issued is called judgement creditor; the debtor, whose account is frozen is called the judgement debtor and the banker who has the customer account is called the Garnishee.

ORDER

Garnishee order types

1.order nisi: by this order the court asks the banker to freeze the debtors account. asks the banker to explain why the funds in the account, so frezeed should not be used for the payment creditor.

Order absolute
This order directs the banker to pay either the whole or a part of the funds lying in the account against which order nisi has been issued to the judgement creditor.

The role of banker

Banker occupies two positions 1. As garnishee holding the funds of judgement debtor. He must issue notice to his customer regarding the garnishee order received against his accout Banker should also inform whether entire amount is attached or only a part of it is subjected to garnishee order.

 He should advice the customer to open a new account for future operation. banker can ask the customer to riase any objection against the garnishee order in the court

As judgement creditor, filing his own case in the court. if the judgement debtor has funds with any government or private agency, such funds can be attached by the banker to satisfy his calim through G.O

Funds of customer to which G.O cannot be attached

The funds held by the customer as a trustee Joint accounts of customers. Deposit held as security for advances Deposit in any form received under the garnishee order. The account of a partnership cannot be attached under garnishee order for the debts due by a partner in his individual capacity.

OBLIGATIONS OF A BANKER
1.OBLIGATION TO HONOUR CHEQUES HE HAS SUFFICIENT FUNDS OF THE CUSTOMERS. THE FUNDS ARE PROPERLY APPLICABLE TO THE PAYMENT OF SUCH CHEQUE, BANKER HAS BEEN DULY REQUIRED TO PAY. THE CHEQUE HAS BEEN PRESENTED WITHIN A REASONABLE TIME AFTER THE APPARENT DATE OF ISSUE. NO GARNISHEE OR ATTACHMENT ORDER.

2.OBLIGATION TO MAINTAIN SECRECY OF CUSTOMERS ACCOUNT It is obligatory for the banker not to disclose the state of the customers account with it since such disclosure may adversely affect the customers credit and business.

In the following circumstances the banker may dispense with the rule.
Where such disclosure is a legal necessity. Where such disclosure is permissible on account of banking practices Where such disclosure is in public interest.

3. Receive cheques and other instruments for collections. 4. Honour the cheques of customers across the counter.

5. Give reasonable notice before closing the customers account.

Rights of customer under consumer protection act,1986

a customer has a right to approach with his complaints to the consumer dispute redressal forum known as district forum

Complaint may relate to the following Any fault, imperfection in quality and nature of performance. Any unfair practices adopted by the banker.

District forum may instruct the bank

To return to the customer the charge paid by the customer. To pay such amount as may e awarded by its compensation to the customer for any loss suffered by the customer. To remove the defects in the service To discontinue the unfair trade practice or not to repeat it, To provide for adequate costs to the parties to the dispoutes.

Module -2 PAYING BANKER

Nature of banking business according to section 5(b) banks have to do 1. collect deposit form the public 2. lend or invest the deposit collected from the public. 3.demand deposit can be withdrawn any time by the depositor by cheque or withdrawal slip. 4. bank lends in the form of overdrafts. Loans purchase of bills. 5. bank make both secured and unsecured advances.

NEGOTIABLE INSTRUMENTS
It means a written document which creates a right in favour of some person and which is freely transferable. according to sec 13 of the negotiable instrument act, a negotiable instruments means a promissory note, bill of exchange or cheque, payable either to order or to bearer whether the words order or bearer appears on the instruments or not.

MANDATORY FUNCTIONS OF PAYING BANKER

PROPER FORM PHYSICAL CONDITION. CROSSSING OFFICE OF DRAWING. DATE OF THE CHEQUE TIME OF PRESENTATION AMOUNT MATERIAL ALTERATION SIGNATURE OF THE DRAWER. LEGAL RESTRICTIONS 1.COUNTERMANDING 2. death 3. insolvency 4. Lunancy 5. Garnishee order SUFFICIENT BALANCE