MEANING, DEFINITION & EXPLANATION
A Garnishee Order is a judicial directive enabling a decree-holder (creditor) to recover debts from a third party who owes money to the judgment debtor. This third party, termed the garnishee, is instructed to pay the debt directly to the decree-holder, bypassing the judgment debtor. In India, the legal framework for garnishee orders is encapsulated under Order XXI, Rule 46 of the Code of Civil Procedure, 1908 (CPC). The term “garnishee” is derived from the French word ‘garnir,’ meaning to warn or prepare.
LEGAL PROVISIONS / PROCEDURE / SPECIFICATIONS / CRITERIA
The procedure for issuing a garnishee order under the CPC involves several steps:
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Attachment of Debt: Under Order XXI, Rule 46, the court may attach debts (excluding those secured by a mortgage or charge) owed to the judgment debtor by issuing an order prohibiting the payment of such debts to the judgment debtor.
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Notice to Garnishee: As per Rule 46A, upon the decree-holder’s application, the court issues a notice to the garnishee, directing them to either pay the debt into court or show cause why they should not do so. This ensures the garnishee is informed and given an opportunity to respond.
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Order Against Garnishee: If the garnishee fails to comply with the notice or disputes liability, the court may, under Rule 46B, order the garnishee to pay the debt. Such an order is treated as a decree against the garnishee, enabling the decree-holder to execute it as if it were a regular decree.
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Disputed Liability: According to Rule 46C, if the garnishee disputes their liability, the court will adjudicate the matter, determining the existence and extent of the debt. This provision ensures that the garnishee’s rights are protected, and any genuine disputes are resolved judicially.
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Third-Party Claims: Rule 46D allows any third party claiming an interest in the attached debt to appear and prove their claim. The court will then adjudicate upon such claims, ensuring that the rights of third parties are not unjustly affected by the garnishee proceedings.
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Payment as Discharge: Under Rule 46F, payment made by the garnishee in compliance with the court’s order serves as a valid discharge of their liability to the judgment debtor. This provision protects the garnishee from any future claims by the judgment debtor regarding the same debt.
CASE LAWS / PRECEDENTS / OVERRULING JUDGMENTS
Several landmark judgments have elucidated the application of garnishee orders in India:
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Syndicate Bank v. Vijay Kumar and Others (1992): In this case, the Supreme Court held that a bank, upon receiving a garnishee order, is entitled to set off the amount owed by the customer against any debts due from the customer to the bank before making payment to the decree-holder. This judgment underscores the bank’s right to claim a set-off in garnishee proceedings.
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Food Corporation of India v. Sukh Deo Prasad (2009): The Supreme Court emphasized that before issuing a garnishee order, the court must ensure that the debt owed by the garnishee to the judgment debtor is clear and undisputed. This case highlights the necessity of proper adjudication to prevent unjust enrichment.
ESSENTIALS / ELEMENTS / PRE-REQUISITES
For a garnishee order to be validly issued, certain essential conditions must be satisfied:
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Existence of a Debt: There must be a clear, existing debt owed by the garnishee to the judgment debtor. Contingent or future debts are generally not subject to garnishee orders.
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Absence of Dispute: The debt should be undisputed. If the garnishee contests the debt, the court must first adjudicate the dispute before issuing a garnishee order.
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No Existing Charge or Mortgage: Debts secured by a mortgage or charge are typically excluded from garnishee proceedings, as specified under Order XXI, Rule 46.
DEFENCES / EXCEPTIONS / EXCEPTIONS TO DEFENCES
A garnishee may raise certain defences to contest a garnishee order:
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Non-existence of Debt: The garnishee can assert that no debt is owed to the judgment debtor, thereby nullifying the basis for the garnishee order.
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Debt is Secured: If the debt is secured by a mortgage or charge, it falls outside the purview of garnishee proceedings under Order XXI, Rule 46.
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Prior Set-off: The garnishee may claim a right to set off any amount owed to them by the judgment debtor against the debt in question, as recognized in the Syndicate Bank v. Vijay Kumar case.
GUIDELINES / RULES / REGULATIONS / NOTIFICATIONS / CIRCULARS
The procedural aspects of garnishee orders are governed by the Code of Civil Procedure, 1908, specifically under Order XXI, Rules 46 to 46F. These provisions ensure that the rights of all parties (decree-holder, judgment debtor, garnishee, and third parties) are protected and the execution process is carried out effectively.0
