The court emphasized the procedure for a garnishee order and clarified that if the garnishee has a right over the property of the judgment debtor, no valid attachment can be issued. The court also highlighted that courts cannot force parties to revoke or modify a contract already entered into.

VALMIKI J. MEHTA, J.

1. This Execution First Appeal is filed by the appellant/objector against the order of the executing court dated 9.5.2016 by which the executing court has directed the appellant/bank to seek discharge of the bank guarantee issued by it in the favor of the Union of India so that the executing court thereafter in execution would be able to seek encashing of the fixed deposit amount lying with the appellant/bank as lien for the bank guarantee issued in favour of the Union of India and in order to satisfy the money decree in favor of the respondent no.1/decree holder. Putting it in other words, in execution of the decree of the respondent no.1/decree holder herein the fixed deposit of the respondent no.2/judgment debtor was lying with the appellant/bank, but the appellant/bank had taken this fixed deposit as 100% cash margin for issuing of a bank guarantee in favour of the Union of India/Government, and consequently the appellant/bank had a first charge/lien/entitlement to encash the fixed deposit in case any liability arose of the appellant/bank towards the Union of India on account of Union of India encashing bank guarantee (and under which bank gurantee the appellant/bank would have had to pay the amounts to the Union of India), and therefore once the bank guarantee is discharged then the fixed deposit will no longer have a lien of the appellant/bank and accordingly the fixed deposit will be available for satisfaction of the money decree in favor of the respondent no.1/decree holder.

2. The facts of the case are that the respondent no.1/decree holder was successful in getting a money decree of Rs.6,72,000/- along with costs and interest at 8% per annum against the respondent no.2/judgment debtor/M/s Swaraj Overseas Limited. Execution petition was filed by the respondent no.1/decree holder for seeking an amount of Rs.7,47,513/-. On 14.2.2011, the executing court issued warrants of attachment with respect to the Fixed Deposit No.0005F108070036 lying with the appellant/bank at its Barakhamba Road Branch at New Delhi. This attachment order dated 14.2.2011 was served upon the appellant/bank on 23.2.2011. Admittedly, as on this date the fixed deposit was lying with the appellant/bank with the charge/lien of the appellant/bank on the said fixed deposit on account of bank guarantee which was issued by the appellant/bank in favour of the Union of India valid for claim upto 21.7.2016. In the meanwhile, certain compromise took place between the respondent no.1/decree holder and the respondent no.2/judgment debtor as a result of which the respondent no.2/judgment debtor agreed to pay a total sum of Rs.7,70,000/- in three instalments in satisfaction of the decree, but the respondent no.2/judgment debtor after paying the first instalment of Rs.2,00,000/- defaulted on the payment of the agreed amount, and consequently a fresh attachment order dated 6.9.2011 was issued by the executing court against the fixed deposit. On 18.11.2011, the appellant/bank appeared in the Court and informed that the fixed deposit mentioned in the attachment order is for securing the bank guarantee given by the appellant/bank in favour of the Union of India. Effectively, therefore, the appellant/bank pleaded that it was a garnishee and consequently the appellant/bank as a garnishee having a lien on the fixed deposit filed objections to the attachment order.

3. By the impugned order the trial court has held that the appellant/bank has wrongly extended the bank guarantee validity period during the period of attachment, and since the bank guarantee has been illegally extended by the appellant/bank till 26.5.2021, therefore the bank guarantee should be got discharged from the Union of India and the respondent no.1/decree holder should be paid the amount of the fixed deposit. The operative portion of the order of the trial court is contained in para 13 of the impugned order, and this para 13 reads as under:-

“13. In view of the judgments cited