Lien and its types

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Q-4      Describe Lien and its types in detail

ANS:   LIEN

Lien means the rights of a person having possession of goods belonging to another or retains those goods until the satisfaction of sum claimed by the person in possession of the goods. It may be noted that the possession of goods must be lawful and continuous. For example, X took Ys godown on a rent of Rs 5,000/= p.m. on an agreement that X can at any time deposit or takes out his goods form the godown. After six months, X stopped paying the rent. Y auctioned Xs goods and claimed hen. Y cannot claim lien because it was agreed that X could take out his goods whenever he wanted.

TYPES OF LIEN

A lien may be particular lien or a general lien,

(a)        PARTICULAR LIEN [SECTION 170]

A particular lien is a right to retain only those goods in respect of which some charges are due. This right is available only if the following conditions are fulfilled.

(a)        The bailee must have rendered some service involving the exercise of labour or skill in respect of the goods bailed.

(b)        The bailee must have rendered service in according with the purpose of the bailment.

(c)        The goods must be in possession of the bailee.

(d)        There must not exist any contract for payment of price in future.

(e)        The labour and skill must have been used so as to confer an additional value on the article. Note: The bailee has right to recover the charges for the services performed even if the goods are

destroyed or stolen with out any fault on his part.

 

EXAMPLE

X gives a piece of cloth to Y, a tailor, to make a coat for the services performed even the coat as soon as it is finished. Y is entitled to retain the coat till*he is paid for (if he has not allowed any credit period) but is not entitled retain the coat (if he has allowed one month’s credit for the payment).

 

(b)        GENERAL LIEN [SECTION 171]

A general lien is a right to retain ail the goods as a security for the general balance of account until the full satisfaction of the claim due whether in respect of those goods or other goods. In the absence of a contract to the contrary, general lien is available only to bankers, factors, attorneys of a High Court (only for non-payment of their professionai’fees) and policy brokers. The general lien is available to other persons only when there is an express contract to that effect.

 

EXAMPLE

X deposit 64 units and shares of Reliance Industries Ltd. As security with City BanldWd took a loan against the shares of Reliance Ltd, City Bank may retain both the security until its claims are fully satisfied.

 

DISTINCTION BETWEEN PARTICULAR LIMN AND GENERAL LIEN

Basis of distinction

Particulars lien

Granted lien

1.

Goods in respect of which lien available It is available against those goods in respect of which some charges are due. It is available against all goods whether in respect of which claim are due or not.

2.

Purpose It is available only for non¬payment of remuneration for the services. It is available for a general balance of account.

3.

To whom available in the absence of contract co contrary It is available to every bailee to whom the goods have been bailed. It is available only to specific bailee like bankers, factor, attorney of High Court and policy broker.

4.

Rendering of service It is available when some service involving the exercise of labour or skill has been

rendered.

It is available even when no such service has been rendered

5.

Purpose of delivery of goods. The purpose of delivery of

goods is 10 confer an additional

value as the goods bailee.

The purpose of delivery of goods is to deposit the goods as security.

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