Lien is a right which the law gives to certain persons in specified circumstances to refuse to deliver property belonging to others, till those others have discharged their legal obligations to them. Liens are of three kinds: (i) possessory, (ii) equitable lien and (iii) maritime lien.
Possessory lien is one which enures only so long as the person claiming the lien has got possession of the property over which it is claimed. In order that lien may exist, the possession must be (a) rightful (b) continuous, and not for any special purpose. Possessory lien only entitles the party to retain possession of the subject-matter of the lien till his claim is satisfied. It gives him no rights of sale. No claim can also been made by such person, for storage or ware house charges with regard to the goods.
A possessory lien may been either (i) particular or (ii) general. A particular lien is given by law to (1) bailees (sec. 170) (2 ) to a finder of goods (sec.168),(3) to agents (sec.221), (4) to pledges (sec.173-4), (5) to carriers (6) to innkeepers, (7) to railways (under the railway act), (8) to ship-owners under the merchant shipping Act, (9) to duck companies and Port trust Authorities and (10) to an unpaid vendor under the sale of goods Act. The lien is lost by (i) loss of possession of goods; (ii) by payment or tender of amount claimed; (iii) by taking security by way of substitution; and (iv) by abandonment. A general lien is given by law to the five types of bailees mentioned by sec. 171.
Equitable lien is a lien which creates a charge on a property to which it attaches so that whoever takes it thereafter with notice thereof takes its subject to the lien. It is created by statute and is in no way dependent on the possession of the property to which it is attached. Thus an unpaid vendor of immovable property, a purchaser of such property who has prepaid the price, have and equitable lien on the property for the amount due to them. A partner who on dissolution of partnership pays the debts of the partnership has an equitable lien on the assets of the partnership for all sums paid by him on behalf of the partnership. This is lien enforceable by sale.
Maritime lien is a lien which is binding on a ship and all her furniture, tackle, cargo, and freight, for payment of a claim founded on maritime law. It is given by law to (i) the master, for wages and disbursements; (ii) to a bottomry bond-holder, for the amount of the bond; (iii) to salvors, on the property saved; and (iv) to persons having a claim against the ship for damages caused by collision due to the ship’s negligence. It is enforced by an action “in rem”, i.e. against the ship itself, e.g. by arresting the ship, by proceedings in Admiralty Court. The lien subsists notwithstanding a transfer of the ship, even to a bona fide purchaser for value.