1. Rights under Garnishee Order: Generally a banker has the obligation to honour the cheques of
his customer. But in case a garnishee order is issued by the court, the banker cannot make any
payment from the account of the customer. The obligation of the banker to honour the cheques
stand suspended in that case.
Let us see how a garnishee order can affect the relationship between the banker and the
customer. Suppose Mr. A is the customer of SBI. He has taken a loan from his friend Mr. B. But
Mr. A fails to repay the loan to Mr. B and as a result Mr. B files a case against Mr. A. Now Mr.
B requests the court to issue an order on the bank of Mr. A directing the banker (SBI) not to
make any payment from the available balance in the account of Mr. A. If the court issues such an
order, it is known as ‘Garnishee Order’. Here, Mr. A (debtor) is known as ‘judgement debtor’,
Mr. B (creditor) is known as ‘judgement creditor’ and the SBI is known as ‘garnishee’.
The garnishee order is issued in two phases. First, ‘order nisi’ is issued directing the garnishee
(banker) not to make any payment from the account of the garnishee debtor. The garnishee is
asked to give his reply in the court whether the funds in the account of the garnishee debtor can
be appropriated towards the payment of the particular debt in question. If the garnishee has no
objection then in the second phase the court issues the ‘order absolute’ i.e. the garnishee order, to
make the payment to garnishee creditor to satisfy the debt from the account of the judgement
debtor. Then the banker’s obligation to the customer (garnishee debtor) is discharged to that
extent.