Ambiguous Instruments

An instrument, which in form or terms is such that it may either be treated as a bill of exchange or as a promissory note, is an ambiguous instrument. In the following cases, the instrument is taken as ambiguous; (a) Where drawer and drawee are the same person. (b) Where drawee is a fictitious person (c) Where drawee is a person incapable of entering into a contract

Inchoate Instruments
he term inchoate instruments means an incomplete instrument. According to !ection"#$, %when one person signs and deli&ers to another a paper stamped in accordance with the law relating to negotiable instruments either wholly blank or ha&ing written thereon an incomplete negotiable instrument he thereby gi&es prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument for any amount specified therein, and not exceeding the amount co&ered by the stamp. the person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount. 'ro&ided that no person other than a holder in due course shall reco&er from the person deli&ering the instrument anything in excess the amount intended by him to be paid there"under%. 'osted by Admin at ()*+ A, Particulars Issuing Authority 0nder which Act Attachment .e&enue/ ax authority .ele&ant Act say !ec. ##1 of Income ax Act for Income ax. 4epositor called 5udgement debtor Assessee 6ank called 5udgement debtor7s debtor Assessee7s debtor !tages of order In two stages i.e. order nisi Issued as a payment and order absolute order. Issued to reco&er 'ersonal dues of creditor 4ues of the go&ernment Amount ,ay be mentioned ,ust be mentioned specifically specifically Applicable to which -lear amount with the 8or all. At the time of or account garnishes at time of receipt after or order Applicable to which All deposit accounts All deposit accounts account including 84 not due including 84 not due .ight of set off A&ailable for lawful and due A&ailable for lawful and debts due debts 5oint accounts, order single 9ot applicable Applicable pro"rata name Account of A, order in his Applicable Applicable name 2rder in 'artnership7s Applicable Applicable name and account in partner7s name 5oint account, order same Applicable Applicable :oint names 2rder in name of partner, 9ot applicable for accounts 9ot applicable for Garnishee -ompetent -ourt -i&il 'rocedure -ode !ec 1$ 2rder #* .ule 31.

trustee, executer, li;uidator, director of a company, etc 4eceased

in name of firm, trust, company i.e. accounts in fiduciary capacity etc.

Applicable. <xecution proceeding can7t be stopped after death Insol&ent 9ot applicable 9ot applicable 0ndrawn -- or 44 limit 9ot applicable 9ot applicable 2rder recei&ed 'reference to attachment 'reference to attachment simultaneously or is pending for payment. 8ailure to implement the -ontempt of court Assessee in default order Applicability on 84. as 9ot applicable 9ot applicable collateral security

accounts in name of firm, trust, company i.e. accounts in fiduciary capacity etc. Applicable

Committees on Banking
Important Committees On Banking In India

Year 1969 Gadgil

Chairman Priority Sector Lending Follow up of ank !redit &sta'lish%ent of (( s !onsortiu% Lending !usto%er Ser*ice

Issue

1975 Prakash Tandon 1975 "# $arasi%ha% 1975 Laksh%i $arayan 1979 (#)# Talwar 19+, )# # !hore 19+1 # si*ara%an -!(.F/!.(01

(e*iew of !ash !redit Syste% Setting up of $. .(0 "/!( /ntroduction ank "echanisation "oney "arket Ser*ice .rea .pproach

19+2 3# # 0a%le 19+6 (angara4an 19++ 5aghul 19+9 P#0# 64ha

19+9 S#!# )alyanasundara% /ntroduction of Factoring Ser*ices 1991 (angara4an 1991 )ushro 1991 "#$# Goiporia 1991 "# $arasi%ha% 1997 S#.# 0a*e 1997 .#!# Shah 1997 !# (ao 1992 (a4a !helliah 1992 Ghosh 1992 /#T# 5a9 1992 ;#5# Shetty 1992 P#(# $ayak 1992 Goswa%i 1992 (# ;ilani 1992 0#(# "ehta 1992 (#$# "alhotra 1995 Sodhani 1995 S# Pad%ana'han 1995 )#S# Shere ank "echanisation (e*iew of .griculture !redit Syste% !usto%er Ser*ice /%pro*e%ent Financial Sector (efor%s Functioning of "utual Funds $ F!s .griculture Policy Ta8 (efor%s Frauds and "alpractices $or%s for :orking !apital Finance 'y anks !onsortiu% Lending 'y anks /nstitutional !redit to SS/s /ndustrial Sickness and &8it Policy !redit 0eli*ery Syste% (e*iew of Progress of /(0P /nsurance Sector (efor%s $(/ /n*est%ents in /ndia anking Super*ision &lectronic Funds Transfer

Priority Sector Lending Revised Guidelines

-ommittee under the -hairmanship of Sri. M V Nair was set up by he .eser&e 6ank of India in August #$** o re"examine the existing classification and suggest re&ised guidelines with regard to 'riority !ector lending and related issues .6I has issued re&ised 'riority !ector -lassification guidelines on #$.$=.#$*# &ide their circular .6I/#$*#"*>/*>?..'-4.-2.plan.6- *>/$3.$+.$*/#$*#"*> operational with immediate effect. he priority sector loans sanctioned under the guidelines issued prior to the date of the abo&e .6I circular dated #$.$=.#$*#, will continue to be classified under priority sector till the maturity / renewal of the said loan. Categories under priorit sector (i) Agriculture (ii) ,icro and !mall <nterprises (iii) <ducation (i&) @ousing (&) <xport -redit (&i) 2thers

!argets
!otal Priorit Sector" 3$A of A96- or -redit e;ui&alent to off balance sheet exposures as on >*st ,arch of the preceding year. Agriculture" *?A of A96- or-redit e;ui&alent to off balance sheet exposures as on >*st ,arch of the preceding year. #irect agriculture *>.(A of A96- or -redit e;ui&alent to off balance sheet exposures as on >*st ,arch of the preceding year. Micro $ Small %nterprises
<, percent of total ad*ances to %icro and s%all enterprises sector should go to "icro -%anufacturing1 enterprises ha*ing in*est%ent in plant and %achinery up to 5 lakh and %icro -ser*ice1 enterprises ha*ing in*est%ent in e=uip%ent up to 7 lakh 7, percent of total ad*ances to %icro and s%all enterprises sector should

go to "icro -%anufacturing1 enterprises with in*est%ent in plant and %achinery a'o*e 5 lakh and up to 75 lakh> and %icro -ser*ice1 enterprises with in*est%ent in e=uip%ent a'o*e 7 lakh and up to 1, lakh The re%aining <,? %ay 'e lent to S%all -%anufacturing1 enterprises with in*est%ent in plant and %achinery a'o*e 75 lakh and up to 5,, lakh> and S%all -ser*ice1 enterprises with in*est%ent in e=uip%ent a'o*e 1, lakh and up to 7,, lakhs

&eaker section" *$A of A96- or -redit e;ui&alent to off balance sheet exposures as on >*st ,arch of the preceding year.

#escription o' the Categories under priorit sector"

Agriculture" (oans to indi)idual 'armers *including S+Gs or ,(Gs- i.e. groups o' indi)idual 'armerspro)ided banks maintain disaggregated data on such loans. engaged in Agriculture and Allied Acti)ities- )i/.- dair - 'isher - animal husbandr - poultr - bee0keeping and sericulture 1up to cocoon stage2. i) !hort"term loans to farmers for raising crops, i.e. for crop loans. his will include traditional/non"traditional plantations, horticulture and allied acti&ities. (ii) ,edium B long"term loans to farmers for agriculture and allied acti&ities (e.g. purchase of agricultural implements and machinery, loans for irrigation and other de&elopmental acti&ities undertaken in the farm, and de&elopment loans for allied acti&ities). (iii) Coans to farmers for pre"har&est and post"har&est acti&ities, &iD., spraying, weeding, har&esting, sorting, grading and transporting of their own farm produce. (i&) Coans to farmers up to #( lakh against pledge/hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding *# months, irrespecti&e of whether the farmers were gi&en crop loans for raising the produce or not. (&) Coans to small and marginal farmers for purchase of land for agricultural purposes. (&i) Coans to distressed farmers indebted to non"institutional lenders. (&ii) 6ank loans to 'rimary Agricultural -redit !ocieties ('A-!), 8armers7 !er&ice !ocieties (8!!) and Carge"siDed Adi&asi ,ulti 'urpose !ocieties (CA,'!) ceded to or managed/ controlled by such banks for on lending to farmers for agricultural and allied acti&ities.

(&iii) Coans to farmers under Eisan -redit -ard !cheme. (ix) <xport credit to farmers for exporting their own farm produce. Indirect agriculture (oans to corporates- partnership 'irms and institutions engaged in Agriculture and Allied Acti)ities *dair - 'isher - animal husbandr - poultr - bee0keeping and sericulture 1up to cocoon stage2. abo)e 3s.4 crore. 1 upto 3s. 4 crore to corporates and 'irms are treated as #irect Agriculture2

&8port credit to corporate> partnership fir%s and institutions for e8porting their own far% produce# Loans upto 5 crore to Producer !o%panies set up e8clusi*ely 'y only s%all and %arginal far%ers under Part /@. of !o%panies .ct> 1956 for agricultural and allied acti*ities# ank loans to Pri%ary .gricultural !redit Societies -P.!S1> Far%ersA Ser*ice Societies -FSS1 and LargeBsi9ed .di*asi "ulti Purpose Societies -L."PS1 other than those co*ered under paragraph /// -1#11 -*ii1 of this circular#

Other indirect agriculture loans (i) Coans up to * crore per borrower to dealers /sellers of fertiliDers, pesticides, seeds, cattle feed, poultry feed, agricultural implements and other inputs. (ii) Coans for setting up of Agriclinics and Agribusiness -entres. (iii) Coans up to ( crore to cooperati&e societies of farmers for disposing of the produce of members. (i&) Coans to -ustom !er&ice 0nits managed by indi&iduals, institutions or organisations who maintain a fleet of tractors, bulldoDers, well"boring e;uipment, threshers, combines, etc., and undertake farm work for farmers on contract basis. (&) Coans for construction and running of storage facilities (warehouse, market yards, godowns and silos), including cold storage units designed to store agriculture produce/products, irrespecti&e of their location. If the storage unit is a micro or small enterprise, such loans will be classified under loans to ,icro and !mall <nterprises sector. (&i) Coans to ,8Is for on"lending to farmers for agricultural and allied acti&ities as per the conditions specified. (&ii) Coans sanctioned to 9F2s, which are !@F 'romoting Institutions, for on"lending to members of !@Fs under !@F"6ank Cinkage 'rogramme for agricultural and allied acti&ities.

he all inclusi&e interest charged by the 9F2/!@F promoting entity should not exceed the 6ase .ate of the lending bank plus eight percent per annum. (&iii) Coans sanctioned to ..6s for on"lending to agriculture and allied acti&ities. 4. Micro and small enterprises
The li%its for in*est%ent in plant and %achineryCe=uip%ent for %anufacturing C ser*ice enterprise> as notified 'y "inistry of "icro S%all and "ediu% &nterprises> *ide> S#6#16<7-&1 dated Septe%'er 79> 7,,6 are as underDB Manufacturing sectorEnterprises Investment in plant and machinery "icro &nterprises 0o not e8ceed twenty fi*e lakh rupees "ore than twenty fi*e lakh rupees 'ut does not e8ceed fi*e crore rupees

S%all &nterprises

Service Sector Enterprises "icro &nterprises S%all &nterprises Investment in equipment 0oes not e8ceed ten lakh rupees "ore than ten lakh rupees 'ut does not e8ceed two crore rupees

Ser)ice %nterprises 6ank loans up to # crore per unit to ,icro and !mall <nterprises engaged in pro&iding or rendering of ser&ices and defined in terms of in&estment in e;uipment under ,!,<4 Act, #$$1. <xport credit to ,!< units (both manufacturing and ser&ices) for exporting of goods/ser&ices produced by them. 5hadi and Village Industries Sector 15VI2 All loans sanctioned to units in the EGI sector, irrespecti&e of their siDe of operations, location and amount of original in&estment in plant and machinery. !uch loans will be eligible for classification under the sub"target of 1$ percent prescribed for micro enterprises within the micro and small enterprises segment under priority sector.

Indirect 6inance (i) Coans to persons in&ol&ed in assisting the decentralised sector in the supply of inputs to and marketing of outputs of artisans, &illage and cottage industries. (ii) Coans to cooperati&es of producers in the decentralised sector &iD. artisans &illage and cottage industries. (iii) Coans sanctioned by banks to ,8Is for on"lending to ,!< sector as per the conditions specified in paragraph GIII of this circular. %ducation Coans to indi&iduals for educational purposes including &ocational courses upto *$ lakh for studies in India and #$ lakh for studies abroad. +ousing Coans to indi&iduals for

up to 75 lakh in %etropolitan centres with population a'o*e ten lakh and 15 lakh in other centres for purchaseCconstruction of a dwelling unit per fa%ily

HH excluding loans sanctioned to bank7s own employees. Coans for repairs to the damaged dwelling units of families

up to 7 lakh in rural and se%iB ur'an areas and up to 5 lakh in ur'an and %etropolitan areas#

6ank loans to any go&ernmental agency for construction of dwelling units or for slum clearance and rehabilitation of slum dwellers sub:ect to a ceiling of *$ lakh per dwelling unit. he loans sanctioned by banks for housing pro:ects exclusi&ely for the purpose of construction of houses only to economically weaker sections and low income groups, the total cost of which do not exceed *$ lakh per dwelling unit. 8or the purpose of identifying the economically weaker sections and low income groups, the family income limit of *,#$,$$$ per annum, irrespecti&e of the location, is prescribed. Others a. Coans, upto ($,$$$ per borrower or 2&erdraft upto .s.($,$$$/" (against 9o 8rills or 6asic !6) pro&ided directly by banks to indi&iduals and their !@F/5CF, pro&ided the borrower7s household annual income in rural areas does not exceed 1$,$$$/" and for non"rural areas it should not exceed *,#$,$$$/".

b. Coans to distressed persons Iother than farmersJ not exceeding ($,$$$ per borrower to prepay their debt to non"institutional lenders. c. Coans outstanding under loans for general purposes under Feneral -redit -ards (F--). Coans sanctioned to !tate !ponsored 2rganisations for !cheduled -astes/ !cheduled ribes for the specific purpose of purchase and supply of inputs to and/or the marketing of the outputs of the beneficiaries of these organisations. Coans sanctioned by banks directly to indi&iduals for setting up off"grid solar and other off"grid renewable energy solutions for households. &eaker Sections" 'riority sector loans to the following borrowers will be considered under Weaker !ections category)" (a) !mall and marginal farmers; (b) Artisans, &illage and cottage industries where indi&idual credit limits do not exceed ($,$$$; (c) 6eneficiaries of !warn:ayanti Fram !waroDgar Ko:ana (!F!K), now 9ational .ural Ci&elihood ,ission (9.C,); (d) !cheduled -astes and !cheduled ribes; (e) 6eneficiaries of 4ifferential .ate of Interest (4.I) scheme; (f) 6eneficiaries under !warna 5ayanti !hahari .oDgar Ko:ana (!5!.K); (g) 6eneficiaries under !cheme for .ehabilitation of ,anual !ca&engers (!.,!); (h) Coans to !elf @elp Froups; (i) Coans to distressed farmers indebted to non"institutional lenders; (:) Coans to distressed persons other than farmers not exceeding ($,$$$ per borrower to prepay their debt to non"institutional lenders; (k) Coans to indi&idual women beneficiaries upto ($,$$$ per borrower; (l) Coans sanctioned under (a) to (k) abo&e to persons from minority communities. In !tates, where one of the minority communities notified is, in fact, in ma:ority, item (l) will co&er only the other notified minorities. hese !tates/0nion erritories are 5ammu B Eashmir, 'un:ab, ,eghalaya, ,iDoram, 9agaland and Cakshadweep.

Small and Marginal 6armers) 8armers with landholding of up to * hectare is considered as ,arginal 8armers. 8armers with a landholding of more than * hectare but less than # hectares are considered as !mall 8armers. 8or the purpose of priority sector loans Lsmall and marginal farmers7 include landless agricultural labourers, tenant farmers, oral lessees and share"croppers, whose share of landholding is within abo&e limits prescribed for M!mall and ,arginal 8armerN.

Capital Gains
What is Capital Gain?

A -apital Fain is an income made by selling a capital in&estment like residential house, flat, shares family businesses, farm houses, agriculture land etc. Capital gain can be o' t7o t pes" a) Short term gains O In case of shares/bonds like securities, if the sale is made within one year, the gains so made is treated as short term and is taxed at *$A. 8or other capital assets holding period is less than >1 months and the profits are added to the income b) (ong term gains O here is no long term capital gain tax for shares/bonds like securities when they are sold after *# months. 8or other capital assets with holding period is more than >1 months, profits made out of the transactions are taxed at *$A (if -apital Fain Indexation is not done) or #$A (if -apital Fain Indexation is done). he Lgain7 here, refers essentially to the difference between the price originally paid for the in&estment and money recei&ed upon selling it with or without indexation.
Can you explain the Capital Gains Scheme?

he long term capital gains arising out of sale of the capital assets can be utiliDed immediately for buying capital asset without attracting any tax. @owe&er, in case the gains are not utiliDed before the due date for filing income tax returns for that particular year, it can be deposited into the special account called -apital Fains Account . 8or e.g., if the property is sold on 5une #$*$, the tax payer can buy or construct the property by 5uly >*, #$**, which happens to be the last date of filing the income tax return. If they are not in a position to purchase/construct within the stipulated time, they can open -apital Fains account with us O by doing so, he gets three years time for in&esting the funds in residential property.
Who can open capital gains account in a bank?

Any indi&idual, minor by guardian, a firm, @08, an association of persons or body of indi&iduals can open -apital Fains account. 6ut, the account can not be opened in :oint names. In short, all

those tax payers who would like to ac;uire a capital asset at a future date, out of the capital gains, can take the ad&antage of -apital Fains Accounts !cheme *+??.
What is meant by Type A and Type B under Capital Gain Accounts Scheme 19 ?

here are two types of accounts under -apital Fains !cheme *+??. he first account is known as #eposit Account A, wherein the deposit shall be in the form of sa&ing deposit, while the deposit in #eposit Account B will be in the form of term deposit with either cumulati&e or non" cumulati&e option. he customer also can transfer from one account type to another, if they are opened under the same section of Income ax Act *+1*.
Can the Customer opt !or a Current Account under Capital Gain Accounts Scheme?

Kes" In special cases, 4eposit Account A can be opened as -urrent Account on the re;uest of the -ustomer. @owe&er, che;ue book should not be issued. !here are se)eral 'ormats to be used in Capital Gains. Can it be clari'iedP he following formats are specified under the M-apital Fains !cheme"*+??N which are self explanatory.
For% $o For% . For% For% ! For% 0 Esed for .pplication for opening account - oth . F 1 .pplication for transferring accounts under the sche%e .pplication for withdrawal of a%ount fro% .ccount . For furnishing the details regarding the %anner and e8tent of utili9ation of the a%ount withdrawn For $o%ination C !ancellation or changing $o%ination .pplication for closing the account 'y the depositor .pplication for closing the account 'y the no%ineeClegal heir of the deceased depositor

For% & F F For% G For% G

Can "e not issue Che#ue books to capital gains SB account? Then $o" to operate the account?

As per the scheme , che;ue book should not be issued for !6"-apital Fains Account A. Whene&er the customer wants to withdraw funds, he has to submit L8orm -7 wherein the

reason/purpose should be mentioned. he purpose should be related to purchase / construction of residential property. After recei&ing the application, we may permit the withdrawal. If the withdrawal exceeds .s. #(,$$$, payment should be made by way of crossed demand draft drawn in fa&or of the person to whom the depositor intends to make the payment. When the withdrawals are made by the tax payers, they should furnish in 8orm 9o 4, in duplicate, the details regarding the manner and the extent of utiliDation of the the pre&ious withdrawal , of which one copy will be returned to the customer. @owe&er, the amount withdrawn from the account should be utiliDed within 1$ days by the customer" else the un utiliDed amount should be remitted back.
%lease clari!y "hether Bank has to &eri!y the end use o! !unds mentioned in the declaration?

No. We need not &erify the end use of funds but only ha&e to rely on the declaration . hese declarations ha&e to be held in safe custody and may ha&e to be submitted to the ax Authorities as and when re;uired
What is the minimum and maximum period !or "hich 'capital gains account (Type B) can be opened?

,inimum period for the 8ixed 4eposit under -apital Fains is *( days. he customer can open the capital gains account for any number of years. 6ut as per !ec (3, (36, (3<-, or (3F of Income ax Act, if the amount is not utiliDed within the stipulated period (# years for outright purchase or > years for construction), the tax has to be paid by the customer.
A bank customer has sold a property* "hich "as +ointly held by him along "ith his "i!e, They "ant to open a capital gains account also +ointly, But Capital Gains rule speci!ies that no +oint account is permitted, What should be done?

As per the -apital Fains Account !cheme *+??, there can not be a :oint account. he parties, according to their share in the property sold, can calculate the capital gains and in&est their portion indi&idually under this scheme.
"hether the earnings on capital assets can be in&ested in bonds? -s there any time limit !or that?

As per !ection (3 <- of I Act, party has to in&est the capital gain in eligible bonds within 1 months from the sale. !ince more than 1 months ha&e lapsed ,he can not in&est in 6onds.
Whether any loan can be extended against the !unds in&ested in capital gains account?

As per the scheme, the funds a&ailable under the -apital Fains !cheme *+?? can not be taken as security for any loan.

Mortgage of Security
What is mortgage
As per !ection (? a of ransfer of 'roperty Act *??# M A mortgage is the transfer of an interest in specific immo&able property for the purpose of securing the payment of money ad&anced or to be ad&anced by way of loan, an existing or future debt, or the performance of an engagement which amy gi&e rise to a pecuniary liability. In the transaction of mortgage, the person who is transferring the property (transferor/borrower or the person pro&iding the security on behalf of the borrower) is called mortgagor and the person or entity in whose fa&our the mortgage is created is the mortgagee ( the lender or the bank) he principal and the interest in&ol&ed in the transaction is called mortgage money and the instrument by which the transaction is taking place is called mortgage deed.

What are the important parts of the mortgage

1# "ortgagor who pro*ides the security 7# "ortgagee in whose fa*our %ortgage is done 2# There should 'e a de't> which %ay 'e e8isting or future <# The i%%o*a'le property offered as security

What are the types of mortgage

Simple Mortgage !imple mortgage is also called registered mortgage. In !imple ,ortgage, without deli&ering the possession of the mortgaged property the mortgagor binds himself personally to pay the mortgage money. In case if the mortgagor fails to make payment as per the agreed terms and conditions, the mortgagee will ha&e a right to get the property sold and to ad:ust for the mortgaged money. he simple mortgage is to be created before the sub"registrar after duly stamping the same and registering under Indian .egistration Act *+$?. his method of mortgaging is &ery much necessary if the mortgagor has the ownership of the property and could not produce all the rele&ant documents. Mortgage b conditional sale In a mortgage by conditional sale, the mortgagor ostensi&ely sells the mortgaged property, on a condition that, the sale will become absolute on a certain agreed date if the mortgagor fails to repay the mortgage money. And the sale will become &oid if the money is repaid as per the terms

and conditions. !ometimes, the condition would such that in case of payment of mortgaged money as per the agreement, the buyer (Cender) will resale the property to the seller (6orrower). 8su'ructuar Mortgage In this type of mortgage the creditor (,ortgagee) is placed in possession of the property and he is entitled to en:oy the income generated by the property (e.g., rent) and appropriate the same towards the interest and principal of the mortgage money. In this mortgage the physical possession is gi&en to the mortgagee and the mortgagee can retail the possession until the payment of mortgage money. %nglish Mortgage <nglish ,ortgage is a registered mortgage by which the entire property gets transferred in the name of the mortgagee and upon repayment of the debt on certain date appointed date, the property will be re"con&eyed to the ,ortgagor. Mortgage b deposit o' title deeds ,ost popular method in India is L,ortgage by 4eposit of itles7 which is commonly known as <;uitable ,ortgage. As per ransfer of 'roperty Act L<;uitable ,ortgage7 is a mortgage by 4eposit of itle 4eeds of Immo&able 'roperty with the mortgagee or his agents with an intention to create a security thereon. here is no necessity to register the <;uitable ,ortgage. 6ut, as the housing loan frauds are mounting, many states ha&e made it compulsory to register the mortgage. !he three basic re9uirements 'or creating %9uitable Mortgage are as 'ollo7s"

The place of deposit of 0ocu%ent of Title to the Property with the creditor or his agent %ust 'e one a%ong the notified areas under Section 5+ -f 1 of Transfer of Property .ct# -$otified area1 The deposit of title is necessarily %ade to secure a de't 0eposits of Title 0eeds %ust 'e %ade with an intention to create a security on the property intended to 'e %ortgaged#

Noti'ied Area Eolkatta, -hennai, ,umbai and any other town which the !tate Fo&ernment concerned may by notification in the 2fficial FaDatte, under the pro&isions of !ec (? f of ransfer of 'roperty Act. Anomalous Mortgage An Anomalous ,ortgage is the one which is not falling under any of the categories discussed abo&e. his type of mortgage is almost non"existent.

Garnishee Order is issued b the Court is t7o parts"

:;. 3ule<Order Nishi. (a) Asks the banker to freeDe the debtorQs account. (b) Asks the banker to explain why the funds in the account, so freeDed should not be used for payment of :udgement creditor. 2n receipt of such an order the bank should immediately inform the customer so that he may make the necessary arrangements for payments of the debts due by him. :4. Absolute" his order directs the banker to pay either the whole or a part of the funds lying in the account against which %2rder 9ishi% has been issued to the :udgement creditor. 1i2 !he amount attached" he Farnishee 2rder may pro&ide for the attachment of the whole or a part of the funds of the :udgement debtorQs account with the bank. he bank should not make payment out of the account so freeDed in contra&ention of the courtQs order otherwise it will be liable for defying the order of the court. Illustration) A fails to pay his creditor 6 a sum of R1$$$ usd, 6 brings a Farnishee 2rder against the bank where A has an account ha&ing a balance of R *$$$$ usd prohibiting any payment out of this account. Inspite of this the banker subse;uently honours AQs che;ue for R($$$ usd. he banker is liable for defying courtQs order and will ha&e to compensate 6 for any loss that he may suffer on account of non"reco&ery of the full amount due to him. In case only a part of the sum standing to the credit of the :udgement debtorQs account has been attached on account of Farnishee 2rder, the banker may transfer that much of amount to a suspense account and the customerQs account may be permitted to be operated with the balance. In case certain che;ues drawn by the :udgment debtor were certified as %good for payment% by banker before the receipt of Farnishee 2rder by the bank, they can be paid in spite of subse;uent Farnishee 2rder. 1ii2 Order applicable onl against the debt due or accruing due" he banker is restrained by the Farnishee 2rder only to make payment of such debts which ha&e already become to the customer or which are not at which at present payable but for the payment of which an obligation exists. An amount which is not a debt due by the banker cannot be attached by such an order. 8or example, a banker has agreed to allow an o&erdraft of R($$$ usd to a customer, he has

o&erdrawn only R>$$$ usd so far, remaining R#$$$ usd cannot be attached by the Farnishee 2rder. 1iii2 Banker=s claim to Set O''" In case a banker has a definite claim against the debtor, it can claim the set off of such claim against the customerQs balance with it in spite of the Farnishee 2rder. 1i)2 Amounts not co)ered b the Garnishee Order" he Farnishee 2rder attaches only that balance which is lying in the :udgement debtorQs account at the time when the order is ser&ed on the banker. It, therefore, does not apply to ) (a) che;ues, bill of exchange etc. deposited with the banker for collection but not yet collected. (b) sale proceeds of securities etc. of the customer not yet collected. (c) deposits made subse;uent to the ser&ing of the Farnishee 2rder. (d) payments made by the banker before ser&ing of the Farnishee 2rder. (e) money held abroad by the :udgement debtor. (f) securities lying in safe custody with the banker. 1)2 Ser)ing o' Garnishee Order" Farnishee 2rder may be ser&ed on the @ead 2ffice of the 6ank and it will ser&e as a notice to all branches where the :udgement debtor may ha&e his accounts. @owe&er, the @ead 2ffice will ha&e to be gi&en a reasonable time so as to enable it to inform the branches. Any payment made by the branches before receipt of information regarding Farnishee 2rder, will be taken as a &alid payment.