Critical Analysis On Rights Of Banker’s Lien In Respect Of Indian Contract Act, 1872

Hemant Chopra, BBA.LL.B., School of Law, NMIMS, Bengaluru

ABSTRACT

A lien is a claim to legitimately maintain ownership of another person's property until the obligation owed by that person is discharged. The term "lien" comes from the French word "ligare," which meaning "to tie." Sections 171 and 172 of the Indian Contract Act, 1872 provide the basis for a lien in the country. Provides protection by allowing a third party to seize the debtor's property or take other legal action to collect on the debt.

The British government passed the Indian Contract Act (ICA) in 1872, and it has unique rules for matters including indemnification, guarantee, bailment, pledge, and agency. Contracts of bailment, which include the delivery of commodities from one party to another for the purpose of facilitating trade, are by far the most prevalent kind of contract in use today. This idea became necessary as society developed in order to encourage commerce. In accordance with ICA, 1872, the ability to lien is a substantial feature of the bailment. Section 148 of the Indian Contract Act, 1872 defines bailment as the temporary delivery of personal property by its owner to another party for a specified purpose, with the expectation that the goods will be returned to the owner ordischarged in accordance with the owner's directions once the delivery's stated purpose has been accomplished. The owner, who is the 'bailor,' is the one who hands over the goods to the 'bailee,' who is the one who receives them. In addition to the bailee's exclusive right to lien under section 158 of the ICA, 1872, the bailor also has certain rights with respect to the delivered goods, including the right to compensation under section 164 of the ICA, 1872 and the right to reimbursement of expenses under section 158 of the ICA, 1872.

Keyword: Debtor, Bank, Retain, Bailment, Contract, Lien