Question

Garnishee Order applies to Fixed Deposit: When it is free from charge Only to surplus margin if pledged Even if fully secured against loan

• A. 1 and 2 only
• B. 2 and 3 only
• C. 1 only D
• D. All of the above

Answer 1

Answer:

A. 1 and 2 only

When it is free from charge Correct — If a Fixed Deposit is not pledged or charged to the bank, it represents a clear debtor–creditor relationship, and a garnishee order can be applied. Only to surplus margin if pledged Correct — When an FDR is pledged as security for a loan or overdraft, the bank has a prior right of set-off. The garnishee order applies only to the surplus amount, if any, after covering the bank’s dues. Even if fully secured against loan ✖ Incorrect — If the Fixed Deposit is fully secured against a loan, there is no surplus available. Therefore, the garnishee order does not apply.