Abstract

The Indian Contract Act is a classical model of contract law that covers various codes that govern general contracts as well as specific contracts. Contract of Bailment, one such type of contract under Indian laws of contract, talks about the delivery of goods from one person to another for a purpose. Under this contract, the bailee is given a right to lien. Right to lien is defined under Section 171 of the Indian Contract Act, 1872 which, talks about the general right to the lien of bankers, wharfingers, factors, attorneys of high courts and policy brokers. The general right to the lien of a Banker is provided in Section 171. It is a possessory right which allows the bank to have temporary possession of the goods until the customer’s outstanding debt is so paid. The landmark judgement of Syndicate Bank v/s Vijay Kumar and Others dealt with the issue of whether or not a banker’s right to lien and set off was a general and customary right guaranteed to them. In furtherance of Halsbury’s laws of England, this judgement recognized the banker’s right to the general lien was a right guaranteed by the law and not the contract. This paper aims to understand the extent and applicability of a banker’s lien in India in accordance with the Indian Contract Act, 1872. Further, it delves deeper to comprehend instances wherein a banker’s right to the lien is not permissible and goes on to draw a critical analysis of the current stance of law.

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