Lien
Lien is the right to retain the possession of the property of another till the other person meets the demands of the person in possession. Lien was in possession of the remedy and it was recognized as a right. The basis of the contract of lien was that it was not between the parties, and the party had its rights because it was imposed law by the common law courts. Therefore, here are the importance of lien. Section 170 and 171 of The Indian Contract Act 1872 deals with two types of lien, i) General Lien and ii) Particular Lien.
The following are the cases where the rights of Lien have been recognized:
• An unpaid seller had a Lien over the goods in possession.
• The agent had a lien on the property of the principal for unpaid remuneration.
• A bailee had a lien on the property in his possession.
The Indian Contract Act, 1872 specifies that the Right of particular Lien is available to the Bailee, subject to certain conditions. The most important condition among the other conditions is the exercise of skill or labour which is regarding the goods bailed. Further, it has been very often highlighted that the skill or labour exercised by the Bailee must be of such a nature that the mayor will improve the quality of the goods.
For instance, A delivers a watch to B, a shopkeeper, to repair his watch and which is to be done accordingly. B is entitled to retain the watch till he is paid for the services that he has rendered. In the case of, Hatton vs Car maintenance company Ltd, the owner of the car and the company entered into an agreement where the condition was supposed to maintain the car, repair it and supply adequate petrol. The owner was supposed to pay Rs. 8000 to the owner of the company, but the company was not paid the above-stated amount. Then, the company exercised the lien over the car.
* Different types of liens :
There are two types of lien,
• Particular Lien
• General Lien
1)Bailee’s particular lien:
According to section 170 of the Indian Contract Act 1872, 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.
For instance, 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.
For instance, 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.
In accordance with the purpose of bailment if the bailee by his skill or labour improves the goods bailed, he is entitled for remuneration for such services. Towards such remuneration, the bailee can retain the goods bailed if the bailor refuses to pay the remuneration. Such a right to retain the goods bailed is the right of particular lien. He however does not have the right to sue. Where the bailee delivers the goods without receiving his remuneration, he has a right to sue the bailor. In such a case the particular lien may be waived.
• The particular lien is also lost if the bailee does not complete the work within the time agreed.
2) General lien of bankers, factors, attorneys and policy brokers:
According to section 171 bankers, factors, 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 the effect.
• Bankers, factors, policy brokers and attorneys of law have a general lien in respect of goods which come into their possession during the course of their profession.
For instance, a banker enjoys the right of a general lien on cash, cheques, bills of exchange and securities deposited with him for any amounts due to him. For instance, ‘A’ borrows ` 500/- from the bank without security and subsequently again borrows another `1000/- but with security of say certain jewellery. In this illustration, even where ‘A’ has returned `1000/-being the second loan, the banker can retain the jewellery given as security to the second loan towards the first loan which is yet to be repaid.
Under the right of general lien the goods cannot be sold but can only be retained for dues. The right of lien can be waived through a contract.
