CENTRAL UNIVERSITY OF SOUTH BIHAR

GAYA-823001

SCHOOL OF LAW & GOVERNANCE

PROJECT WORK
on
“Right of lien, nature and types of lien”

Under the Supervision of – Dr. Pradeep Kumar Das

Submitted By-
Anupam Prabhat Shrivastava
B.A. L.L.B (Hons)- 3rd Semester
Enrollment No. - CUSB1613125009

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 PREFACE

I have great pleasure in presenting this project before the Respected Professor who is
teaching the ‘Contract Law’ and also before the others who will be going through this
project. This project work focuses on “Right of lien, nature and types of lien’’. Parties to the
contract must enter into the contract freely and without any fear as for the balance of amount.
The right of lien is such a right to bailee which makes him free from fear for the balance of
amount
Doctrinal Research Methodology is used to prepare this project.
Although the subject topic of this project i.e ‘Contract’ is a very broad topic to deal
but the limitation in this project is set to deal only about “Right of lien, nature and
types of lien’’. Thus with the limitation every aspect of the topic is described in this
project.

With a hope that going through this project would give an immense pleasure and would help
in learning more about the given topic.

- Anupam Prabhat Shrivastava

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 CONTENTS

Sr. Number Topics Page Number

1. Introduction 05

2. Right of Lien 05

3. Particular Lien 05-07

4. General lien 07-08

5. Conclusion 08

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 ACKNOWLEDGEMENT

First of all, I want to thank God and My Parents for providing me resources and ideas which
led me to complete this Project.

Then,I want to thank My Professor, Mr. Pradeep Kumar Das Sir, for giving me such an
enlightening project as it broadened my idea for the rights of bailee. Thus this is a very
enlightening project for me and my knowledge.

And at last, I want to thank my Friends who helped me a lot in completing this project by
their views and ideas.

Without the kind supports of any of the above mentioned people, my project would not have
completed. So, thanking them by my heart.

- ANUPAM PRABHAT SHRIVASTAVA

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 Right of lien, nature and types of lien
INTRODUCTION:
RIGHT OF LIEN
It is a right of the bailee to detain a particular good until the claim for the lien is fulfilled
where the claim must be lawful. In other words, right to lien is the right of the bailee under
which the bailee can retain the goods of the bailor, and refuse to deliver them to the bailor,
until his due remuneration for services in respect of goods bailed, or the amount is paid.
The Supreme Court in Syndicate Bank vs. Vijay Kumar1 cited to the nature of the right that:
“Lien is in its primary sense a right in one man to retain that which is in his possession
belonging to another until certain demands of the person in possession are satisfied. In this
primary sense it is given by law and not by contract.”
KINDS OF LIEN
There are two kinds of lien:
(i) Particular lien
(ii) General lien
The right of ‘particular lien’ entitles the bailee to retain those very goods for the services
regarding which the remuneration is due. The ‘general lien’ entitles the bailee to retain the
goods of the bailor for a general balance of amount.
When the bailee incurs some expenses for preserving the goods from deterioration during
lien, he can recover the same from the owner of the goods. 2 When the bailee loses his
possession of the goods, his right of lien is lost thereby.
PARTICULAR LIEN (Section 170)
As a general rule a bailee is entitled only to particular lien, which means the right to retain
only that particular property in respect of which the charge is due. This right is provided for
in Section 170 of the Act.
Section 170. Bailee’s particular lien- Where the bailee has, in accordance with the purpose
of the bailment, rendered any service involving the exercise of labour or skill in respect of the
goods bailed, he has, in the absence of a contract to the contrary, a right to retain such
goods until he receives due remuneration for the services he has rendered in respect of them.
Illustrations
(a) A delivers a rough diamond to B, a jeweller, to be cut and polished, which is
accordingly done. B is entitled to retain the stone till he is paid for the services he has
rendered. (a) A delivers a rough diamond to B, a jeweller, to be cut and polished,
which is accordingly done. B is entitled to retain the stone till he is paid for the
services he has rendered."
(b)   A gives cloth to B, a tailor, to make into a coat. B promises A to deliver the coat as
soon as it is finished, and to give a three months credit for the price. B is not entitled
1
AIR 1992 SC 1066
2
Surya Investment Co. vs. S.T.C., AIR 1987 Cal. 46.

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 to retain the coat until he is paid. (b) A gives cloth to B, a tailor, to make into a coat.
B promises A to deliver the coat as soon as it is finished, and to give a three months
credit for the price. B is not entitled to retain the coat until he is paid."
Particular Lien is one such right of the bailee against those goods in respect of which he has
rendered some services involving the exercise of labour and skills. And if the bailee does not
complete the work within agreed time, then he will loose his right to retain the property. For
example, A delivers some jewellery to B to get those polished. It is done by B. Now B is
entitled to retain the polished jewellery till he is paid for his services.
Exercise of labour or skill
Thus this right is available subject to certain important conditions. The foremost among them
is that the bailee must have rendered some service involving the exercise of labour or skill in
respect of the goods bailed. As also in the example mentioned above the jewellery was given
to polish and B completed his service. So here his labour and skill was involved which gives
him the right to retain the property for which he is providing his services unless and until he
is paid for it.
In accordance with contract
Secondly, the labour and skill must have been exercised in accordance with the purpose of
the bailment and the terms of the contract. It means that the exercise of labour or skill must
be done only in accordance with the purpose for which the goods has been bailed to the
bailee.
Goods on which labour or skill bestowed
Thirdly, only such goods can be retained on which the bailee has bestowed trouble and
expenses. He cannot retain any other goods belonging to the bailor which are in his custody
as said in the case of Chase vs. Westmore3 It is this element of ‘particular lien’ which
distinguishes it from ‘general lien’.
Possessory Right
Lastly, the right depends on possession and is lost as soon as possession of the goods is lost.
In the case of Eduljee vs. Café John Bros4, the plaintiff purchased an old refrigerator, the
vendor agreeing to repair it for a fixed charge. When the repair was over and the condition of
the machine was found satisfactory, it was delivered to the plaintiff but a part of the repair
money was still unpaid. The machine broke down again and the vendor carried its engine and
another part for further repairs and claimed lien on these parts until the outstanding charges
of repair was paid.
The court held that delivery of possession after repairs are effected puts an end to the lien
which the repairer has for the charges of repairs and cannot be revived because the repairer
undertakes further repairs merely out of grace and not as a matter of fresh contract. The court
cited “… the defendant, after the repairs were completed, relinquished his possession, and
could not afterwards detain for the amount of the repairs.”

3
105 ER 1016.
4
ILR 1944 Nag 37.

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Therefore, “lien is a possessory right which continues only so long as the possessor hold the
goods.”5
The right of particular lien has been recognised not only in favour of a bailee (u/s 170) but in
some other cases also which are under:
(i) Lien of finder of goods. (Section 168).
(ii) Pawnee’s or pledgee’s lien. (Section 173-174).
(iii) Agent’s lien. (Section 221).
(iv) Unpaid seller’s lien. (Section 47, Sales of Goods Act, 1930).
(v) Partner’s lien. (Section 52, Indian Partnership Act, 1932).

General Lien (Section 171)

The right of “general lien”, as provided for in section 171, means the right to hold the goods
bailed as security for a general balance of amount. The right of particular lien entitles a bailee
to detain only that particular property in respect of which charges are due. But general lien
entitled the bailee to detain any goods bailed to him for any amount due to him whether in
respect of those goods or any other goods. If, for example, two securities are given to a
banker but a loan has been taken only against one of them, the banker may detain both
securities until his dues are paid.
Section 171. General lien of bankers, factors, wharfingers, attorneys and policy brokers-
“Bankers, wharfingers, attorneys of a High Court and policy-brokers may, in the absence of
a contract to the contrary, retain, as a security for a general balance of account any goods
bailed to them; but no other persons have a right to retain, as a security for such balance,
goods bailed to them, unless there is an express contract to that effect.”
The right of general lien has been conferred on the following kinds of bailees:
(i) Bankers
(ii) Factors
(iii) Wharfingers
(iv) Attorneys of a High Court; and
(v) Policy-brokers
The right is available to the above categories of bailees only and none else, “unless there is an
express contract to that effect”. It means that the parties may, by an express contract between
themselves, confer the right of general lien on a bailee, who has otherwise got only a right of
particular lien. In the cases of Syndicate Bank vs Vijay Kumar6 and Nakulan vs. Dy. G.M.,
Canara Bank7 (Kerala High Court), the court held that “the bank could retain gold
ornaments offered as security on premise that the petitioner had not discharged liability in
respect of another personal loan availed by him, especially when the said personal loan was
without any security.”
General Lien of Bankers

5
Legg vs. Evans, (1840) 151 ER 311.
6
AIR 1992 SC 1066.
7
AIR 2014 Ker. 64.

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As according to Section 171, bankers can exercise general lien, i.e., they can retain as a
security, goods bailed to them, for a general balance of account. This right is available in
absence of a contract to the contrary.
“When a banker has advanced money to another, he has a lien on all securities which come
into the hands for the amount of his general balance, unless there is an express contract or
circumstances to the contrary.”8 Therefore, if cheques or other securities have been deposited
with a bank, he can exercise lien over them. A banker can exercise lien over lien over bills,
cheques, and moneys entrusted or paid to him in his character as a banker, and this right is
“not prejudiced by any defect in the titles of the customer of equities of third parties,
provided the banker acts honestly and without notice of any defect in title.” 9 Also in the case
of State Bank of India vs. Deepak Malviya10, the court stated that “the banker’s lien is a
general lien and he can retain the goods for the satisfaction of a debt other than the one for
which the goods are pledged.”
So for the general lien of bankers, the bankers have the right to retain goods other than the
goods pledged or to retain the securities for all the debt until cleared.
Factors
The word “factor” in India, as in England, means an agent entrusted with possession of goods
for the purpose of selling them for his principal. He is given the possession of goods in the
ordinary course of his business for the purpose of sale. He has a general lien on the goods of
his principal for his balance of account against principal.
Wharfingers
‘Wharf’ means a place contiguous to water, used for the purpose of loading and unloading
goods, and over which the goods pass in loading and unloading. It is essential to a wharf that
goods should be in transit over it. A wharfinger has general lien on the goods bailed to him
until his wharfage, which means, charges due for the use of his wharf, are paid.
Attorneys of a High Court
An attorney or a solicitor who is engaged by a client is entitled to general lien until the fee for
his profession service and other costs incurred by him are paid. The right extends to the
proceeds of the action that come to the hands of the attorney. He has a right of lien over the
funds which are deposited with the court. The Bombay High Court held in a case that a
solicitor who is discharged by his client, has the right to hold the papers entrusted to him
subject to his lien for costs.
Policy brokers
A policy-broker means a person who acts as an insurance agent to effect marine insurance.
He is one of the persons mentioned in Section 171, having a right of general lien. He can
exercise such a right until the balance of amount due to him from a client has been paid.
CONCLUSION

8
Punjab National Bank vs. Satyapal, AIR 1956 Punjab 118, at 120.
9
Jai Kishan Dass vs. Central Bank of India, AIR 1955 Pb. 250, at 251.
10
AIR 1996 All. 165.

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Thus the right of lien is an integral part of the contract where it confers right to the bailee to
work without fear of loosing the certain balance of amount which he has invested through his
labour or skills. We came across the meaning and scope of Right to lien, its nature and its two
types, which are particular lien and general lien. The stakeholders for these two lien are
different person exercising these rights. These right are very much necessary in a sense to
make bailee fear free for his certain balance of amount and also to create fear in the person
who is making use of the labour or skills or the bailee. This right is very much appropriate in
nature and does not need any changes in it.

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