Banking · Garnishee Order and Right of Set-off
Upon receiving a Garnishee Order, what is the maximum amount that ABC Bank, acting as the Garnishee, is legally obliged to attach from Current Account X (credit balance) and Term Deposit Z collectively, if the bank exercises its inherent Right of Set-off against an irregular Overdraft Account Y?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Rs. 25,00,000/- (TD Z only, as the Current Account X is immediately subject to set-off against OD Y)
- 2Nil, as the bank's Right of Set-off on Account X and the General Lien on TD Z effectively extinguish the credit balance as debt due to the Judgment Debtor✓
- 3Rs. 75,00,000/- (Account X + TD Z, with no set-off against OD Y)
- 4Rs. 50,00,000/- (Account X only, as GO cannot attach joint accounts)
Correct answer
Nil, as the bank's Right of Set-off on Account X and the General Lien on TD Z effectively extinguish the credit balance as debt due to the Judgment Debtor
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