dissolution of partnership

1. The obligation of a banker to honour his
customer’s cheque is extinguished (not accepted
or clear) on receipt of an order of the Court,
known as the Garnishee order, issued under
Order 21, Rule 46 of the Code of Civil Procedure,
1908.

2.  A court order instructing a garnishee (a bank)
that funds held on behalf of a debtor (the
judgement debtor) should not be released until
directed by the court. The order may also
instruct the bank to pay a given sum to the
judgement creditor (the person to whom a debt
is owed by the judgement debtor) from these
funds.

3.  If the debtor fails to pay the debt owned by
him to his creditor, the latter may apply to the
court for the issue of a garnshee order on the
banker of his debtor.
 The account of the customer with the banker,
thus, becomes suspended and the banker is
under an obligation not to make any payment
thereof.

4.  The creditor at whose request the order is
issued is called the judgment creditor; the
debtor whose money is frozen is called
judgment debtor and the banker who is the
debtor of the judgment debtor is called the
Garnishee.

5.  The Garnishee order is issued in two parts
The court directs
the banker to
stop payment
out of the
account of the
judgement-
debtor
ORDER NISHI
After the bank
file his
explanation, if
any, the court
may issue the
final order, called
ORDER
ABSOLUTE

6.  In case of order nisi the banker is prohibited
from paying the amount due to the customer n
the date of receipt of order nisi.
 Bank should in such a case immediately inform
the customer so that dishonour of any cheque
issued by him may be avoided.