company law

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siladitya chatterjee

siladitya chatterjee (Querist)
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03 April 2010 what is GARNISHEE ABSOLUTE used in relation with a creditor under registration of charges?

Rasesh

Rasesh (Expert)
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04 April 2010 A garnishee is a debtor''s debtor. In a garnishee proceeding, three parties are involved: a judgement debtor, a judgement creditor, and a garnishee.

A judgement creditor is one who has obtained a decree against another. Judgment debtor is the person against whom the decree is granted and a garnishee is a person who is presumed to be indebted to the judgment debtor.

Illustration

A owes B Rs 2,000/. A refuses to repay the amount. B sues A and obtains a decree in his favour. Here B judgement creditor and A is the judgement debtor. B comes to know that A has some money in a bank account and would like to have his decree satisfied by attaching the funds in the hands of A's bank. For this purpose he approaches a court and obtains a Garnishee order attaching funds at the bank standing to the credit of A. The bank being a debtor of its customer, in this eg, A, is the garnishee

Garnishee order is received in two stages i.e. Order Nisi and Order Absolute

In garnishee nisi, the garnishee is enabled to show cause why the amount in his hands (really belonging to the judgement debtor) should not be attached. It may be noted that a notice is sufficient to freeze the amount in the hands of the garnishee. However it can be vacated in a court of law.

When the garnishee order is confirmed it is called garnishee absolute

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