Lien: Definition, Types of Lien

Lien means the right of the creditor to retain the goods and securities owned by the debtor until the debt due from him s repaid. It confers upon the creditor the right to retain the security belonging to the debtor. such right can be exercised by the creditor in respect of goods and securities entrusted to him by the debtor with the intention to be retained by him as security for a debt due by the debtor. This means that the creditor must already be in possession of goods and only then can he exercise the right of lien on them.

Types of Lien

  • General Lien
  • Particular Lien

General Lien: A general lien is applicable not to a particular debt lone but to all amounts due from the debtor to the creditor. This right is conferred on banks in accordance with section 171 of the Indian Contract Act, 1872 which states that bankers may in the absence of a contract to the contray, retain as security for a general balance of account, any goods bailed to them. The words ‘in absence of a contract to the contray’ mean that if the goods are handed over to the bank for some specific purpose, then the bank cannot have a lien on them. Further, the goods and securities should have been entrusted to the banker in his capacity as a banker.

The bankers right of general lien is discussed in next article.

Particular Lien: A particular lien can be exercised by a craftsman or a person who has spent time, labor and money on goods retained. It gives the right to retain goods for a particular debt only. For example, a mobile repair shop owner has the right to retain the mobile repaired by him untill his repairing charges are paid. It should be noted that a particular lien confers upon the creditor the right to retain goods and not the right to sell the goods. In the above example, the repair shop owner cannot sll the mobile to recover his charges he can merely retain the mobile with him until the mobile owner the – debtor pays the dues.

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