Lien is a right of a person to retain goods belonging to another; until the demands of the person in possession are satisfied. For instance, the banker cannot setoff the credit balance on a partner's account against a debt due on the partnership firm's account and vice versa.
The precise effect of a banker's lien varies according to the laws of a particular jurisdiction. Where account is opened in the name of minor child in the capacity of a guardian, the account with the bank. One of the most important rights enjoyed by a bank is the right of general lien. A banker cannot also exercise a lien on securities or valuables lying in a locker rented to the customer in the bank’s safe deposit vault. Viewers are also introduced to a concept called NEGATIVE LIEN. Regarding bank’s general lien on securities deposited for safe custody, there are two views.

Hence, bank cannot exercise right of set-off on such accounts. No lien arises in case the credit and liability do not exist in the same right. There are two kinds of lien; namely, particular and general. Another point to be noted in this connection is that the banker cannot exercise his right of set-off if the accounts are not in the same right. Section 171 of the Indian Contract Act confers the right of general lien on the bankers. Theses cannot be used by the bank for set-off. Features of a Banker’s Right of General Lien. Banker’s Lien . 3. 2. The banker possesses the right of general lien on all the goods and securities entrusted to his capacity as a banker and in the absence of a contract inconsistent with the right of lien. The right of lien generally arises by operation of law, but in some cases it is created by express contract. Thus, the banker cannot exercise his right of lien over the securities or funds of …

Lien gives a person only a right to retain the possession of the goods and not the power to sell unless such a right is expressly conferred by statute or by custom or by usage, A banker’s lien is a general lien which is tantamount to an implied pledge. 1. The effect of banker’s lien and the circumstances under which bank cannot exercise lien are …
TRUST The funds held by a person in a trust account are to be treated in a different right from his own liability as an individual. 6. Registered agents will usually not have a right of general lien. When a person claims a right to retain property, in respect of money or labor expended on such particular property, this is a particular lien. (b) General lien A general lien is the right of a particular class of persons (for example, solicitors, bankers or stockbrokers) to retain possession of property until the owner of the property has settled all their outstanding obligations to that class of persons. Right of General Lien. In general lien, the property on which lien is exercised can only be retained, but cannot be sold for any payment lawfully due to him.

To create general lien, no special contract is required. 5. Scope. A banker's lien is a legal right arise in many common law jurisdictions of a bank to exercise a lien over any property in the custody of the bank as security for the indebtedness of the customer to the bank. Sir, Kindly inform whether the Banker's lien and right of ste off can be exercised by a NBFC.For example,Mr.X works for a NBFC which is a public limited company.X's wife P has invested in debentures of this company say Rs.100000.Due to Mr.X.company suffers some loss.Whether NBFC can attach this debentures in the name of P to recover its due from Mr.X. No lien arises until the due date in respect of an advance of a specific amount made for a definite period. Banker has right of general lien To exercise the right of lien the bank must lawfully take over its possession A banker should sell the securities only after a giving a notice to the debtor Features of general lien – Banker’s Implied pledge and right of sale.


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