Summary: The Bombay High Court ruled in favor of M/s. Otarmal Kantilal & Co., changing an earlier decision that limited how much could be collected from a garnishee notice. The court decided that money added to the account after the notice should also be used to pay off the debt.
M/s. Otarmal Kantilal & Co. challenged a decision from the City Civil Court. The original issue was about getting money back from Ullhas Shankar Naik and another person involved. The City Civil Court had decided that only the amount available at the time of the notice could be collected, which was just Rs.362.
The notice to freeze assets was issued on July 22, 2009. It stopped any payments to Ullhas Shankar Naik by their employer, Respondent No.3, until the court said otherwise. The notice was supposed to be returned by July 22, 2010, with details on how it was carried out.
"The total amount owed was Rs.52,205/- with additional interest of 14% per year."
The High Court found that Respondent No.3 let Ullhas Shankar Naik take out Rs.47,053 on June 25, 2010, even though the notice was still in effect. This withdrawal went against the terms of the notice.
"Allowing such a withdrawal while the notice is active goes against the notice's rules."
Even though Respondent No.3 said only the initial Rs.362 was payable, they deposited Rs.22,000 and agreed to pay another Rs.15,709 later. This showed that money added after the notice should be used to pay off the debt.
Justice Jitendra Jain canceled the City Civil Court's order and approved the appeal, instructing the trial court to enforce the decision according to the rules.
"The conclusions in the contested order are incorrect, and therefore, the contested order needs to be canceled."
In this case, the court emphasized the importance of following court orders and the problems that can arise from not handling attachment notices properly.
