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9. Let me examine the ingredients of the general lien embodied in Section 171, going by its literal meaning. The ingredients for exercising lien under Section 171 are:

i. Bailment of goods.

ii. Existence of a general balance of account. iii. Absence of a contract to the contrary.

10.When the above ingredients are satisfied, the five persons named in the Section shall have the right to exercise the statutory lien. The lien is to be exercised by retaining possession of the goods. The persons other than the five persons may have the right of lien only if there is a contract to that effect. In such a case, it is a contractual lien, and it is governed by the terms of the contract between the parties and not by Section 171 of the Contract Act. WP© Nos. 26253, 36140 & 37946 of 2025 2026:KER:5512 Bearing these principles in mind, let me examine the questions of law involved in these cases.

QUESTION OF LAW NO.1

11.Bailment of goods is essential to invoke the general lien under Section 171 of the Contract Act. Under Section 148 of the Contract Act, 'bailment' is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. In the case of bailment, possession of the goods is with the bailee. As per Section 171, the Bank, as a bailee, is allowed to retain possession of the goods by exercising lien. Possession of goods with the Bank is essential to exercise the lien. When lien is exercised, the Bank is entitled to retain possession till payment of the debt. In the case of an equitable mortgage by deposit of title deed, the Bank with which the Title Deed is deposited will not be having possession of the property covered by the Title Deed WP© Nos. 26253, 36140 & 37946 of 2025 2026:KER:5512 deposited. Even assuming that the lien under Section 171 of the Contract Act is exercisable over immovable properties, the Bank could not exercise the same without possession of such immovable properties.

22. In Balaram Choudhury (supra), the Orissa High Court refused to uphold the general lien of the Bank holding that no document has been placed before the Court to show that the borrower had given any authorization to the Bank to hold the documents of the mortgaged property, given to secure the loan transaction for the WP© Nos. 26253, 36140 & 37946 of 2025 2026:KER:5512 purpose of any other loan, other than the purported home loan; that mortgage has to be construed as a 'contract to the contrary'; that the term 'goods' contemplated in Section 171 of the Contract Act is to be understood in the sense that it should be converted in terms of money or in other words, the goods should have marketability and that there will be no bailment in the case of title deeds.