In the law of bailment, a Lien is the right of the bailee to retain possession of the goods belonging to the bailor until the charges or dues for the services rendered are paid. Under the Indian Contract Act, 1872, this right serves as a security for the bailee.
1. Bailee’s Right of Particular Lien (Section 170)
A Particular Lien is the right to retain only those specific goods for which the bailee has rendered services involving the exercise of labor or skill.
Conditions for exercising Particular Lien:
The service must involve labor or skill (not just storage).
The service must have been performed in full.
The goods must be in the possession of the bailee.
There must be no contract to the contrary.
Decided Case: Eduljee v. Cafe John Bros (1943)
Facts: A person gave an old refrigerator to a repairer. The repairer fixed it and delivered it back but allowed the owner to pay later. When the refrigerator broke again, it was sent back for repairs. This time, the repairer refused to return it until the previous repair bill was also paid.
Decision: The court held that the repairer had lost the lien on the first bill the moment they voluntarily delivered the refrigerator back to the owner. A lien is a possessory right; once possession is lost, the lien is destroyed and does not revive if the goods return for a different purpose.
2. Bailee’s Right of General Lien (Section 171)
A General Lien is a broader right that allows a bailee to retain any goods of the bailor in their possession for a general balance of account, even if those specific goods were not the ones worked upon.
Who can exercise General Lien?
According to Section 171, only the following categories of persons have a statutory right to a general lien (unless there is a contract to the contrary):
Bankers: For a general balance of account from a customer.
Factors: Mercantile agents entrusted with goods for sale.
Wharfingers: Owners of a dock or wharf where goods are landed.
Attorneys of a High Court: For their professional fees.
Policy-brokers: For the general balance of their insurance accounts.
Decided Case: Vijay Kumar v. Jullundur Body Builders (1981)
Facts: A bank held certain fixed deposits of a customer as security for a specific bank guarantee. Even after the guarantee was discharged, the bank claimed a lien over the deposits for other outstanding debts of the customer.
Decision: The court upheld the bank’s right to a General Lien, stating that a banker is entitled to retain securities and funds belonging to a customer for all debts due from that customer in the ordinary course of banking business.
3. Difference Between Particular Lien and General Lien
| Basis | Particular Lien (Section 170) | General Lien (Section 171) |
| Scope | Attached to specific goods on which labor/skill was applied. | Attached to any goods for a general balance of account. |
| Requirement | Must involve the exercise of labor or skill. | Can be exercised even if no service was rendered on those specific goods. |
| Who can exercise | Available to every bailee (e.g., tailor, mechanic). | Available only to specific groups (Bankers, Factors, etc.). |
| Purpose | To secure payment for services related to that specific item. | To secure the entire debt owed by the bailor. |
| Contract | Implied by law for all bailees. | Usually requires a custom of trade or specific legal status. |
Termination of Lien
A bailee's lien is terminated if:
Payment is made: The bailor pays the full amount due.
Possession is lost: The bailee voluntarily returns the goods to the bailor.
Waiver: The bailee agrees to give up the right of lien.
Inconsistent Act: The bailee does something with the goods that is inconsistent with the bailment (e.g., selling them without authority).
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