Dr.

RAM MANOHAR LOHIYA NATIONAL LAW

UNIVERSITY, LUCKNOW

FINAL DRAFT: Civil Procedure Code and Limitation

Law

Garnishee order and Percept

Submitted to: Submitted by:

Mr. Vipul Vinod Sanstubh Sonkar

Subject: Civil Procedure Code Semester: IV

Roll no.: 119 Section: B

 TABLE OF CONTENT

 Introduction
 Scope and nature
 Garnishee proceedings
 Judicial trend
 Conclusion
 Bibliography
INTRODUCTION:

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.1

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.

1
C.K. Takwani, Civil procedure, Eastern Book company, Lucknow, 8th Ed., 2017, pg no. 468.
Scope and nature

Scope of Order 21 Rule 46 requires a notice to be issued to a garnishee before a garnishee order
is passed against him. If such notice is not issued and opportunity of hearing is not afforded
before passing an order, the order would be null and void. In the eyes of the law, there is no
existence of such an order and any step taken pursuant to or an in enforcement of such an order
would also be void.

The object of this rule is to render debt due by the debtor of the judgment debtor available in
execution to the decree holder and not to drive him to a suit. It applies to a debt, other than a debt
secured by a mortgage or a charge, which has been attached under R 46. Unlike the Calcutta rule,
this rule applies to a debt under a negotiable instrument by virtue of the new R 46-A. The word
‘may’ in the rule means that the rule is discretionary and the court may refuse to act under this
rule if it inequitable. If a debt attachable under R 46 has not in fact been attached under this rule
or the debt is one which cannot be attached under this rule garnishee proceedings cannot be taken
in respect thereof. Thus, the garnishee proceedings cannot be taken in respect of a debt due to a
firm in execution decree against the partners in their individual capacity.

In Syndicate Bank v. Vijay Kumar2, while furnishing bank guarantee in favor of high Court
customer furnished two fixed deposit receipts duly discharged to the bank and authorized the
bank the custody of the receipts and renewals thereof. The Hon’ble Supreme Court held that it
becomes a general lien. Bank can set off liability of the party against the receipts. If the fixed
deposits are attached to bank garnishee has to go to the court. The balance after adjustments of
bank’s claim shall be available to satisfy the decree.

The foundation of garnishee proceedings is an attachment under R 46. Further a decree holder
can proceed against a garnishee only where the judgment debtor has a present right to recover the
debt from his Judgment debtor (the garnishee). If money is payable to the judgment debtor only
on a certain contingencies, the decree holder would be subject to the same disability as his
judgment debtor & decree holder would be subject to the same disability as his judgment debtor

2
(1922) 2 SCC 330.
and has to wait till the happening of that contingency. This so because the debt that is attachable
is one which the judgment debtor can enforce payment of, if he desires to do so. There is,
however, a distinction between the case where there is existing debt, payment whereof is
deferred and the case where the debt and its payment rests in future. In the former case, the debt
is attachable and in the latter it is not . The fact that the amount of the debt due or accruing is not
ascertained does not prevent a garnishee order nisi being made. 3

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.4

3
http://www.legalserviceindia.com/article/l422-Power-of-Indian-courts-to-issue-Garnishee-
Order.html (last accessed on 22nd March, 2019)

4
http://www.lawyersclubindia.com/forum/Garnishee-Order-7985.asp (last accessed on 20th
March, 2019)
Garnishee proceedings

Garnishment is a judicial proceeding in which a creditor asks the court to order a third party who
is indebted to the debtor to turn over to the creditor any of the debtor’s property held by that third
party .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.

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.

Payment made by the garnishee on notice under R 46-A or under any such order as aforesaid
shall be valid discharge to him against the judgment debtor and any other person ordered to
appear as foresaid for the amount paid or levied, although the decree in execution of which the
application under R 46-A, was made, or the order passed in the proceeding on such application,
may be set aside or reserved.5

It is an inquisitorial proceeding, affording a harsh and extraordinary remedy. It is an anomaly, a

statutory invention sui generic, with no affinity to any action known to common law. It is a
method of seizure but it is not a levy in the usual acceptation of that term. It is proceeding by
which a diligent creditor may legally obtain preference over other creditors; and it is in the nature
of the creditor’s bill, or a sequestration of the effects of a debtor in the hands of his debtor . It is a

5
J. Rajesh Tandon, The code of civil procedure, Allahabad Law Agency, Haryana, 26th Ed.,
2005, pg no. 328.
proceeding in which plaintiff in action seeks to reach the rights & effects of defendant by calling
into court some third party, who has such effects in his possession or who is indebted to
defendant. While a garnishment proceeding accomplishes the same purposes as an attachment or
execution, it is in no sense a levy on property, but it is a judicial proceeding by which a new
judgment is to be obtained.

Garnishee proceedings are the proceedings are in rem as well as in personam. It operates on the
person of the garnishee as on the debt. Therefore, it is classified as a proceeding quasi in rem.

Prohibitory order on garnishee - A Notice was issued to call upon the defendant to show cause
against the prayer of the plaintiff in his application. However, notice was not issued in form No
5. The Kerala High Court, In Greater Cochin development Authority, Kadavanthara v.
Harrisons Malayam Ltd.6, held that since the purpose of form 5 was achieved in substance, the
order will not be liable to be set aside on that ground. A comparison of form No 5 was made with
the prohibitory order which actually served on the garnishee. It revealed certain differences such
as in the prescribed form the direction was “to the above named garnishee and to affix at the
court house” the mention of the direction to the defendant to furnish security was not available in
the impugned order and direction in the impugned order was to the garnishee prohibiting or
restraining him from making the payment of specified debt or any part thereof to any person
whomsoever or otherwise than the court and form no 5 envisages direction to the Amin to call
upon the defendant to furnish security. However, in the absence of any particular form prescribed
by the law, whereby the amin, to whom the warrant in form No 5 is addressed, should call upon
the defendant to furnish security, the court resorted to issuance of separate notice calling upon
the defendant to show cause against the prayer in the application which mentions of security as
well, there was no illegality. By issuance of separate notice the court achieved the purpose of the
former portion of the form No 5 in substance.

6
AIR 2002 KER 199.
Execution of money decree- The executing court has been given power to recover any of the
amounts of the judgment debtor, which is in the hands of other. However, the court has no power
to issue an order or direction to anybody, may it be usual financier of the judgment-debtor to pay
to satisfy the debt or decrials amount for the judgment debtor, may it under assumption that the
guarantee is able and can recover the amount from judgment debtor or the judgment debtor will
pay to garnishee. In the just out case, the executing court has not held that any of the amounts of
the judgment debtor who is not holding any money of the judgment debtor is lying with the
petitioner bank. The executing court did not held that the petitioner under any provisions of law
can be directed to create liability upon himself to pay the amount to decree holder even under the
assumption that petitioner may recover the amount either from the judgment debtor or from state.

The order of the executing court, which is virtually a direction to create a liability for the bank,
rather than to pay any debt amount or deposit amount of the judgment debtor to decree holder is
therefore, in violation of the Rule 46 B of order 21 of CPC and is liable to be set aside.
Judicial trend

In Kazim Jawaz Jung v. Mir Mohamad Ali Jaferi and Anr,7 the Appellant is the debtor of
judgment debtor. He was directed to deposit in Court amount payable to judgment debtor as
required by decree holder. The appellant disputed his liability with regard to amount due to
judgment debtor. He contended that the final decree with regard to liability amount has not been
passed yet and therefore the impugned amount becomes payable only when judgment debtor
allots land to appellant. Thus, the appellant is not liable to pay any amount before allotment of
land by judgment debtor. The Hon’ble Andhra Pradesh High Court held that where the judgment
debtor himself is not entitled to recover amount from appellant then decree holder has no right to
recover amount from appellant.

In Executive Engineer, KSE Board v. J H Sharma 8 , the garnishee appeared in court in

response to the letter and filed a counter-affidavit, raising certain objections. It was held that
since he had raised his contentions in counter-affidavit, the same could be treated as objections
contemplated under O 21 R 46 C even in the absence of formal notice under O 21 R 46 C to
order that the disputed question be tried as an issue and to decide the issue. In the impugned
orders, the court below did not consider the merits of the dispute raised by the appellant.

In Uttar Gujarat S.R.V. Sangh Ltd. V. Mehsana District Central Co-op. Bank Ltd. and
Ors9, Ex-parte garnishee orders were issued against the appellant by the Ahmedabad Board of
Nominees. Pursuant to the order of restraint passed by the Board of Nominees, Ahmedabad
Division, the present appellant was restrained from giving or making payment to defendant No.
1. Though appellant was a party in the Special Civil Application, the matter was disposed of
without hearing the appellant. In the Review Application the learned Single Judge of the High
Court proceeded on entirely erroneous premises. The ultimate result is that the appellant, without
getting an opportunity of being heard and/or presenting its case has been saddled with the

7
AIR 1972 AP 70.
8
AIR 1988 KER 288.
9
(2008) 11 SCC 492.
liability. Therefore, the Hon’ble Supreme Court set aside the impugned order and remits the
matter to the High Court for fresh disposal in accordance with law.

In Food Corporation of India v. Sukh Deo Prasad10, the Hon’ble Supreme Court held that the
Garnishee proceedings are governed by Rules 46 and 46A to 46F of order 21 of the Code. Sub-
para (1) of Rule 46 A provides that in the case of a debt (other than a debt secured by a mortgage
or a charge) which has been attached under Rule 46, upon the application of the attaching
creditor, the court may issue notice to the garnishee liable to pay such debt, calling upon him
either to pay into court the debt due from debtor or to appear and show cause why he should not
do so.

Rule 46B provides that where the garnishee does not forthwith pay into court the amount due
from him to the debtor and does not appear and show cause in answer to the notice, the court
may order garnishee to comply with the terms of such notice, and on such order, execution may
issue as though such order were a decree against him. Rule 46C provides that where the
garnishee disputes liability, the court may order that any issue or question necessary for the
determination of liability shall be tried as if it were an issue in a suit and upon the determination
of such issue shall make such order or orders as it deems fit. It would thus be seen that the
amount due by a garnishee, if disputed has to be determined as if it was an issue in the suit and
the court can appropriate order determine the extent of liability of the garnishee. In this case,
there was no adjudication of the amount payable by FCI. Whatever amount that was due in
pursuance of the order dated 27.5.1996 in regard to one go down taken on lease in June 1994,
was deposited by FCI and the plaintiff bank at whose instance the order was made has no
complaint or grievance.

10
AIR 2009 SC 2330.
 Conclusion

The concept of 'Garnishment' has been introduced in civil procedure code by the amendment Act,
1976 and is a remarkable piece of legislation. 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 the court to attach money or Goods
belonging to the judgment debtor in the hands of a third person. The third party is known as
'Garnishee' and the court's order is known as Garnishee Order. It is a remedy available to the
Decree holder. This Order may be made by the Order of the court to holders of funds, i.e. a third
party that no payments have to be made until the court authorizes them. The purpose of the Order
is to protect the interest of the Decree holder. This is 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
defendant.

The power of the court enshrined under Rule 46A to issue court notice, is discretionary and the
court may refuse to pass such Order if it is Inequitable and the court apprehends that it can cause
prejudice to the garnishee, or that the grounds of the application seeking that remedy is not
sufficient or if the affidavit is filed by decree holder is frivolous or ambiguous, etc. The
discretion, however, must be exercised judicially. Where the court finds that there is bonafide
dispute against the claim and the dispute is not false or frivolous, it should not take action under
this rule.

The executing Court has been given power to recover any of the amounts of the judgment debtor,
which is in the hands of other. The rule of 46 A requires a notice to be issued to a garnishee
before a garnishee order is passed against him. If such notice is not issued and an opportunity of
hearing is not provided by the court, the order would be null and void. In the eyes of law, there is
no existence of such an order and any step taken pursuant to or an in enforcement of such an order
would also be void. The object of this rule is to render debt due by the debtor of the judgment
debtor available in execution to the decree holder and not to drive him to a suit. It applies to a
debt, other than a debt secured by a mortgage or a Charge, which has been attached under rule 46.
Prior to this amendment in 1976, there was no provision relating to garnishee order in the code of
civil procedure, 1908. After insertion of this amendment, a direct provision was added to the code
of civil Procedure, which empowers the court to issue such an order on the application duly filed.

It is the discretionary power of the court to issue a garnishee order and not a mandatory
provision. Garnishee proceedings are the proceedings in rem as well as in personam. It operates
on the personam of the garnishee as on the debt. Therefore it is classified, as a proceeding quasi in
rem. Cheques cannot be attached under Order XXI Rule 46. It is attached under O21 R46. It is
attached under OXXI R51 relating to Negotiable Instrument Act. Similarly contingent Debts can
also not be attached. The court has to use this power with caution thinking properly and after
being ensured that the case is prima facie and that no innocent is harassed, otherwise the very
purpose of the legislation of providing the concerned remedy as discussed above shall come to be
at a stake.
Bibliography:

 http://www.mondaq.com/india/x/369332/Financial+Services/A+Glance+On+Provision+
Of+Garnishee+Order (last accessed on 22nd March, 2019)
 Mulla, Code of civil procedure( ABRIGRED), LexisNexis, New Delhi,120th Ed.,2008.
 http://www.legalserviceindia.com/article/l422-Power-of-Indian-courts-to-issue-
Garnishee-Order.html (last accessed on 22nd March, 2019)
 http://www.lawctopus.com/academike/concept-execution/ (last accessed on 20th March,
2019)
 Takwani C.K. , Civil procedure, Eastern Book company, Lucknow, 5th Ed., 2006.

 http://www.lawyersclubindia.com/forum/Garnishee-Order-7985.asp (last accessed on

20th March, 2019)
 J. Tandon Rajesh, The code of civil procedure, Allahabad Law Agency, Haryana, 26th
Ed., 2005.