Module: | Pledge, Lien, Agency, and Discharge
Q16: Which of the following statements, regarding the banker's general lien, are correct?
1. Under Section 171 of the Indian Contract Act, a bank has a general lien, which is the right to retain a customer's securities for any general balance due.
2. The bank's general lien does not apply to items deposited by the customer for a specific purpose, such as safe custody.
3. A lien is primarily a right to retain possession, and does not automatically grant the bank the right to sell the securities.
4. A bank's general lien extends to the contents of a customer's safe deposit locker.
2. The bank's general lien does not apply to items deposited by the customer for a specific purpose, such as safe custody.
3. A lien is primarily a right to retain possession, and does not automatically grant the bank the right to sell the securities.
4. A bank's general lien extends to the contents of a customer's safe deposit locker.
✅ Correct Answer: A
A banker's general lien (Section 171, Indian Contract Act) is an implied pledge.
It is the right to retain a customer's securities for any general balance due (Statement 1). It does not apply to items deposited for a specific purpose like safe custody (Statement 2) or the unknown contents of a safe deposit locker (Statement 4 is incorrect). A lien is a right to retain, not an automatic right to sell (Statement 3).
It is the right to retain a customer's securities for any general balance due (Statement 1). It does not apply to items deposited for a specific purpose like safe custody (Statement 2) or the unknown contents of a safe deposit locker (Statement 4 is incorrect). A lien is a right to retain, not an automatic right to sell (Statement 3).