Question 1

A Garnishee Order Nisi creates a charge on the customer's account, but:

The bank must stop payment from the account but need not pay the court until the order is made Absolute.The bank must pay the amount to the court immediately.It applies only to future deposits.The customer can still withdraw funds.

View Explanation

Order Nisi is a preliminary order asking the bank to freeze the funds and explain why they shouldn't be paid. Only after the Order is made "Absolute" does the bank pay the court.

Question 2

If a bank receives a Garnishee Order attaching a customer's account, but the bank already has a prior right of set-off against a due loan from the same customer:

The Garnishee Order takes precedence over the bank's right.Both share the amount equally.The account is frozen and decision is left to the court.The Bank's right of Set-off takes precedence over the Garnishee Order.

View Explanation

The bank has the right to combine accounts and set off dues BEFORE complying with the Garnishee order, provided the bank's debt was due and recoverable at the time the order was served.

Question 3

Can a Garnishee Order issued in the name of Mr. A attach the funds in a Joint Account held by "Mr. A and Mr. B"?

Yes, but only 50%.No, a joint account cannot be attached for an individual debt of one holder.Yes, the entire amount.Yes, if Mr. A is the first holder.

View Explanation

A Garnishee Order can only attach funds that solely belong to the judgment debtor. A joint account (A & B) cannot be attached for A's individual debt because the debt is not due to A alone. However, the reverse is true (A's account can be attached for a joint debt of A & B).

Question 4

An Attachment Order from the Income Tax Department typically attaches:

Only the clear balance available at the time of receipt.Only funds in excess of ?10,000.Only Fixed Deposits, not Savings accounts.The balance at the time of receipt AND any future credits deposited until the order is revoked.

View Explanation

Unlike a court Garnishee Order (which usually attaches only present balances), Income Tax Attachment Orders (under Sec 226(3) of IT Act) are generally "continuing" in nature. They bind the bank to remit any funds held *at that time* OR *subsequently held* for the assessee until the tax demand is met or the order is revoked.

JAIIB Quiz

Quiz Finished!