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