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Indian Contract Act, 1872 · Chapter IX: Of Bailment

Section 171: General lien of bankers, factors, wharfingers, attorneys and policy-brokers

In plain words

Bankers, factors, wharfingers, attorneys of a High Court and policy-brokers can, unless agreed otherwise, keep any goods bailed to them as security for a general balance of account. Others can do so only under an express contract.

A simplified explanation, prepared with AI assistance from the official text below and checked automatically against it for numbers and cross-references. The official text is the law and prevails over this summary. Not legal advice.

Read the in-depth explanation, with key Supreme Court rulings ↓

Official text

Bankers, factors, wharfingers, attorneys of a High Court and policy-brokers may, in the absence of a contract to the contrary, retain as a security for a general balance of account, any goods bailed to them; but no other persons have a right to retain, as a security for such balance, goods bailed to them, unless there is an express contract to that effect1 .

Source: India Code (indiacode.gov.in), the consolidated text published by the Legislative Department, Government of India. Text as updated on India Code on 15 October 2026. Words in square brackets [ ] were inserted or substituted by later amending Acts, and *** marks words omitted by an amendment. The amendment footnotes are not reproduced here. Official text on India Code.

Understanding this section

Section 171 gives a general lien to bankers, factors, wharfingers, attorneys of a High Court and policy-brokers. Unless there is a contract to the contrary, they may retain any goods bailed to them as security for a general balance of account. No one else has such a lien without an express contract.

Key points

  • The list of persons is closed; others need an express contract.
  • The lien covers the general balance of account, not just charges on the particular goods.
  • Goods must have come to the holder in their capacity as banker, wharfinger and so on.
  • A banker's lien over goods or securities is often described as an implied pledge.

Goods versus money

A banker's lien attaches to goods and securities bailed to the bank. Money in a customer's account is not bailed; it is a debt the bank owes, and the bank's corresponding remedy is set-off.

Key Supreme Court rulings

  • Board of Trustees of the Port of Bombay v. Sriyanesh Knitters 1999 INSC 298

    The Port Trust, acting as a wharfinger, has a general lien under section 171 and may retain goods for any amount due in respect of goods bailed to it. 'General balance of account' is not limited to wharfage and includes demurrage due on earlier consignments.

Common mistakes

  • Assuming any business that holds goods has a general lien; only the listed categories do.
  • Confusing a lien over goods with set-off against deposited money.

Read with: Section 170 Indian Contract Act, 1872, Section 172 Indian Contract Act, 1872

Prepared with AI assistance as a study aid. Every ruling listed was checked against the Supreme Court's own judgments on this site, and quoted words appear in those judgments; linked names open the full judgment. Read the judgments themselves before relying on them. Not legal advice.

Supreme Court judgments citing the section 171