LIEN*

*this PPT is for revision purposes only. Kindly refer to textbooks and bare act for detailed information.
INTRODUCTION
Lien in its elementary sense is a right of a person to retain the possession of goods
until the demands of the possessor are satisfied. Therefore, the Right of Lien is a
right granted by law and is merely not granted by a contract.
PARTICULAR LIEN
Section 170 of the Act is about Particular Lien, which basically expresses a very common
principle that, if a person has a good being delivered to him or her, then that person can
retain the goods unless and until he or she receives the remuneration for services
rendered. It is impossible to exercise this right if the person claiming the right is not in
possession of the goods. This right to retain the possession is in respect to only those
goods against which the dues have arisen, and not against any other good. For instance, A
gives a rough diamond to B, a jeweler, and asks him to polish and cut the same.
So here, B has the right to particular lien to retain the diamond till he is entitled to
the payment for the services rendered. Moreover, this right can only be claimed in
respect of the goods upon which labour or skill has been exercised by the bailee.
But, it is a well settled principle that right to lien may be excluded if there exists a
contract to its contrary. Also, the right to lien seizes to exist if the bailee keeps the
good bailed for more than the agreed time, or the reasonable time, for the completion
of the work and eventually failed to do so
Though Section 170 of the Act affirms that the bailee has the right to retain the goods
until the remuneration is received for the services rendered, but it nowhere states that this
right even enables him to sell the goods to recover the dues.

The most important condition among the other conditions is the exercise of skill or
labour which is regarding the goods bailed.

it has been noted that in common law, lien has been limited to cases where the scope of
improvement is necessary where there is the exercise of labour and skill. However, there
are no substantial case laws available in Indian Courts.

The second most important element is that the skill and labour, both, must be exercised
in accordance with the terms of the contract as well as the purpose of the bailment.
The third element is that only such goods can be considered for the retention on which
the bailee had actually faced trouble and expense. And, he reserves no right to retain
the goods which belong to the Bailor and are in his custody.

Lastly, this particular right also depends upon the possession and also is lost as soon as
possession of the goods is lost. Pertinently, after repairs, the delivery of possession
which is affected puts an end to the lien which the repairer has for the charges of
repairs and it cannot be revived because the repairer had undertaken further repairs
which are merely out of grace and they are not a matter of a fresh Contract
GENERAL LIEN
Section 171 of the Act gives an idea about General Lien. General lien is the right of an
individual to retain the movable property as a security, which belongs to the other person. It
is against a general balance which is due, until the liability of the holder is discharged.

Generally, the service providers are given the privilege of general lien. These service
providers reserve a right to retain the goods which are bailed to them for the sake of a
general balance of sum which is due to their customer. This particular Section is quite
anxious to limit the use of general liens by telling that no person reserves a right to claim a
general lien unless the parties have provided for it in their contract in express terms
According to this provision of the Indian Contract Act, this right is very commonly
available to bankers, factors, wharfingers, high-court attorneys and policy-brokers.
No other person shall have a right to retain the goods bailed, as a security for such a
balance unless and until there is an express contract to its effect. For instance, the
banker's lien is a general lien and it can retain the goods in order to satisfy any debt.
General lien includes many types of liens but banker's lien is its most common kind.
A general lien only confers the right to retain the goods and do not confer on the
person entitled to the lien, the right to sell the goods.

The main difference between a pledge and a lien is the right to sell. Pledge confers
an implied authority to sell, whereas a lien confers just a mere right of retention. It is
implied pledge because in the event of default by the customer, the bank possesses
the power to sell the property without resort to the courts.
Lien is a right while the pledge is a contract between the parties. But, it is implicit
that the contracting parties are free to create a lien by contract and waive the right of
lien. An important aspect of the pledge is that the person has been given voluntary
possession of goods while the lien is the performance of duty for paying a due sum
of money.
BANKER'S LIEN
When goods are bailed to the bank, it is said to be banker's lien. It is rigidly confined to the securities and
properties which are in the custody of the banker and it is only applicable in cases where the bailed goods
belong to the customer, but is held by the bank as security. If the goods are in possession of the bank but is
not owned by the customer, then the bank does not have the right to lien over it.

Further, this right is available for security for general balance on account of any goods bailed to them.
Section 171 of the Act states that the general principles which cover the banker's lien specifically authorizes
the bank to retain the pledged goods such as ornaments by claiming the lien over those, till the money of the
bank is not cleared in connection with the account.
Also, where valuables and securities are deposited for any specific purpose, for e.g., for safe custody,

in that case the banker has no general lien over them because the acceptance of the goods for any

special purpose implies that the general lien is excluded.

In Indian Law, under bailment, especially pledge, the pledgee is vested with the right to sell the

goods to receive the amount due against it at the default of the pledger, under Section 176 of the Act.
FACTOR'S LIEN
A factor is an agent who is entrusted with the possession of the goods for the purpose of
selling. The factor has the right to buy or sell the goods, so he or she sells the goods under
his or her own name without disclosing that of the principal.

The lien of a factor arises with goods coming into his actual or constructive possession. He
is given the possession in the ordinary course of his business. lien shall arise when the
goods have been delivered to the factor in course of the business and in his capacity as a
factor.
WHARFINGERS LIEN

The word Wharf means a place that is contiguous with water and it is used for the
purpose of loading and unloading of the goods. It as a general lien means that goods
are bailed to him until the Wharfingers that is the charge due for the Wharf is paid.

A wharfinger is the owner of a wharf who receives merchandise on his wharf for
hire, either for the purposes of forwarding or for delivery to the consignee on such
wharf. The wharfinger, along with dealing with the loading and unloading of the
cargo, even performs the function of storing and delivering the same.
ATTORNEY'S LIEN

An attorney or a solicitor of any High Court has a general lien on all the papers and
documents which is owned by his client(s), which are currently in his possession in
the professional capacity. So, he is entitled to the lien until the fee for his
professional service is paid. But, if the attorney or the solicitor refuses to act any
more for the client, he loses his Right to Lien for the same.
There has been a Supreme Court decision in R.D. Saxena vs Balram Prasad AIR 2000, where the
court held that the papers or the documents which are given to an advocate for one particular case is
not considered to be goods, and that an advocate after the enactment of the Advocates Act, 1961
cannot exercise the lien under Section 171 of the Act. Also, the keeping of files does not amount to
bailment of goods in case of advocates.

It was also highlighted by the court in this case that the word goods as mentioned in Section 171 of the
Act have to be understood according to what is stated in Sales of Goods Act, and that the Bar Council
of India Rules does not provide for any lien to the litigants on the litigation files. But rather, the rules
prohibit an advocate doing an adjustment in the fees which is payable to him or her against the liability
to the client.