GENERAL LIEN AND PARTICULAR LIEN
A lien is the legal right to keep possession of another person’s property until that person satisfies the person in possession’s demands. Any requirement could be made, including fulfilling a task or making a required payment. As trade and commerce expanded, the common law viewed liens as “Self Help” practices. It was referred to as “self-help” because no court intervention was necessary. When trade and commerce made further advancements, the Court saw that allowing such primitive remedies to exist freely could cause everyone to carelessly hang on to whatever they had. Finally, it may hinder business and trade.
Lien was acknowledged as a right since it was inherent in the remedy. 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.
One of the rights available to the Bailee is the right of lien. The Particular Lien and General Lien are the two categories into which the Right of Lien is divided under the Indian Contract Act, 1872. The precise definition of a Particular Lien is provided in Section 170 of the aforementioned Act, which specifies that the Bailee is free to retain control of a specific property in relation to the charge that is owed. For instance, A gives a piece of fabric to B, a tailor, who will sew it into a pair of pants as soon as it is finished and grant a three-month price credit. In light of this situation, B is not allowed to return the pants until he has been compensated.
THE SIGNIFICANCE OF LIEN
A lien is the legal right to keep possession of another person’s property until that person satisfies the person in possession’s demands. The cure belonged to Lien, and it was acknowledged as a right. The contract of lien was based on the idea that it wasn’t between the parties and that each had legal rights as a result of the law being imposed by common law courts. Here are some reasons why lien is important.
DIFFERENT FORMS OF LIEN
The common law courts recognize the following two forms of liens:
- Particular lien
- General lien
Until the fees owed in relation to the property are paid, the person in Particular Lien reserves the right to retain possession of the goods.
A general lien is the right to keep possession pending payment of the debt, even though that debt has nothing to do with the possession-related property. The Indian Contract Act, 1872 deals with particular liens in Section 170 and general liens in Section 171.
According to the bailee’s specific lien, which is outlined in Section 170, if the bailee has, in accordance with the purpose of bailment, performed any service involving activity such as the exercise of labor skill in respect of the goods which are bailed, he has the right, absent a contract to the contrary, to retain such type of goods until he receives fair compensation for the services he has performed in respect of them.
Examples (a) A brings a watch to B, a shopkeeper, who is to repair the watch as instructed. B is allowed to keep the watch until he receives payment for the services he has provided.
In the case of Hatton v. Car Maintenance Company Limited, the car’s owner and the business entered into a contract under which the company was required to maintain the vehicle, make necessary repairs, and provide enough gas. The firm was not paid the Rs. 8000 that the owner was obliged to give to the company’s owner. The corporation then used the vehicle’s lien.
Thus, it can be inferred that a lien is not possible in every situation where the services have been performed; rather, it is only available when the commodities are improved by actual expertise and labor, or manpower, applied to them. According to the aforementioned case law, it was just for the maintenance of the good but not for the improvement of the condition of the goods.
SECTION 171 OF THE GENERAL LIEN ACT
According to Section 171 of the Indian Contract Act of 1872, a general lien is defined. According to Section 171, bankers, factors, wharfinger, attorneys, and policy brokers maintain their general liens on the general balance of the account and any items that are to be bailed to them unless there is a specific written agreement to the contrary.
Service providers typically receive the broad lien privilege. These identification service providers reserve the right to keep the items that are given to them as bail in order to collect the overall balance of money that is owed by their client.
This specific Section is very eager to restrict the use of general liens by stating that no one has the right to assert a general lien unless the parties have expressly provided for it in their contract. Lien is regarded as a “primitive remedy” and common law does not support it; rather, it simply takes note of it. Because everyone can hold onto products of one kind or another, a broad lien could notably restrict trade and commerce.
In a particular case of Rushforth v. Hadfield, particular carrier goods made an attempt to claim a general lien on the ground for its usage of practice for trade and commerce. He carefully noted that there is a disadvantage in the case of general lien when there is a case of insolvency. In this particular case, it was also noted that general lien causes a great deal of inconvenience when it comes to the generality of the traders because they give plenty of advantages to certain individuals, a special privilege who claim to have the special privilege against the body of the creditors instead of coming with them for the sake of insolvent of the state.
WHAT DISTINGUISHES A GENERAL LIEN FROM A PARTICULAR LIEN?
The following are the main distinctions between general liens and specific liens:
- A general lien is the authorization given to someone to keep ownership of items that belong to another person in exchange for payment of the account’s overall balance. Instead, the specific lien can be seen as a person’s right to hold a specific item on bail until the debt associated with it is paid off.
- Any goods that are subject to unresolved claims are subject to a general lien. On the other hand, the specific lien is only applicable to products for which the bailee has incurred labor and skill costs.
- General Lien is not automatic but is recognized through an agreement, whereas particular lien is automatic.
- In the case of a general lien, the holder does not have the right to sell the items in order to pay off the debt. However, under some circumstances, the privilege is granted. On the other hand, in the case of a particular lien, the bailee is not permitted to sell the items in order to pay his or her debts.
- Bankers, wharfingers, factors, insurance brokers, lawyers, etc. are the ones who use general liens the most frequently. In contrast to this, a bailee, unpaid seller, finder of goods, pledgee, partner, agent, etc. uses the particular lien.
One of the options accessible to a person is a lien, which allows them to keep possession of property that belongs to someone else up until the claim of the person in charge is met. The Bailee is free to use or exercise the Right of Lien in a Contract of Bailment in accordance with the Indian Contract Act, 1872.
By declaring that “Lien in its elementary sense is a right of a person to retain the possession of things until the claims of the possessor are satisfied,” the Honorable Supreme Court clarifies the fundamental essence of the Right of Lien. Lien is a valuable individual who deserves to be respected.
Author: Anshika Jain,
Amity University, Madhya Pradesh, B.A. LL.B (Hons.), 3rd year