The obligation of a banker to honour his customer’s cheque is extinguished on receipts of an order of the court known as garnishee order issued under order 21 Rule 46 of civil procedure code. Such an order attaches the debts not secured by a negotiable instrument by prohibiting from recovering the debt and the debtor from making payment thereof. The creditor at whose request the order is issued is called the judgement creditor the debtor whose money is frozen is called the judgement debtor. And the banker who is the debtor of the judgement debtor is called the garnishee.

This order is issued in two parts. First the court directs the banker to stop payment out of the account of the called as ORDER NISI. On receipt of the confirmation of the banker court issued another order known as order absolute whereby the entire balance in the account or a specified amount is attached.

GARNISHI ORDER IS APPLICABLE
a. Where there is a credit balance
b. Attaches the amount drawn by a cheque but payment not yet effected.
c. All bank branches of a bank are treated as one entity.
d. Attaches future maturing term deposits also.
e. attaches joint account if issued so
f. Attaches personal account of partners if an order is served on a partnership account.

WHERE THE ORDER IS NOT APPLICABLE
a. Where a cheque has been marked for good payment.
b. Attaches the amount specified only
c. Not applicable to sanctioned limit.
d. Where any assignment of balance has been made and acknowledged
e. Not applicable to deceased and insolvents
f. Salary is not attached.
g. Bank can exercise the right of set off before complying with Garnishee Order.