Banking · Garnishee Order
Mr. Anand maintains a sole proprietorship current account for his business, 'Anand Electronics,' and a joint savings account with his wife, Mrs. Priya (payable to either or survivor), at the same branch of a bank. His personal loan at the bank has become an NPA. The bank receives a court garnishee order in the name of 'Anand Electronics' for five lakh rupees. At that time, the current account has three lakh rupees, and the joint savings account has four lakh rupees. Which of the following is legally correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The joint savings account can be fully attached because Mr. Anand has the right to operate and withdraw the entire amount as an 'either or survivor' holder.
- 2The bank must first set off its own two lakh rupee NPA debt from the current account balance before attaching any funds for the court.
- 3The bank can only attach the three lakh rupees in the current account because a garnishee order specifying a sole proprietorship firm name does not attach a joint account.✓
- 4The bank must freeze three lakh rupees from the current account and two lakh rupees from the joint savings account.
Correct answer
The bank can only attach the three lakh rupees in the current account because a garnishee order specifying a sole proprietorship firm name does not attach a joint account.
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