Section 171 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 171 names the only persons who, under the Act, have a general lien: a right to retain goods bailed to them as security for a general balance of account, not just for work on those particular goods. They are bankers, factors, wharfingers, attorneys of a High Court and policy-brokers. No one else has that right unless there is an express contract to that effect. If you need to put a demand or a notice on this footing in writing, our legal notice drafting service can help.
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 effect. The list in the section is the list: five named kinds of persons.
The text
Section 171 reads: "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 effect."
The five persons named
| Person | Named in section 171 as |
|---|---|
| 1 | Bankers |
| 2 | Factors |
| 3 | Wharfingers |
| 4 | Attorneys of a High Court |
| 5 | Policy-brokers |
The text does not define these terms. This article uses them as the section prints them and does not add descriptions of how banks or other businesses work. Other laws may apply to a particular business, and they are outside this article.
Limb by limb
- "may, in the absence of a contract to the contrary": the right exists by default and may be excluded by contract.
- "retain as a security for a general balance of account": the right to hold is for a general balance of account, which is wider than the debt for work on the particular goods.
- "any goods bailed to them": the goods must have come to them by bailment.
- "no other persons have a right to retain ... unless there is an express contract to that effect": for anyone else, a general lien needs an express contract.
General lien and particular lien
| Particular lien (s.170) | General lien (s.171) | |
|---|---|---|
| Who | A bailee who has rendered labour or skill on the goods | Bankers, factors, wharfingers, attorneys of a High Court, policy-brokers |
| Security for | Remuneration for the services on those goods | A general balance of account |
| Default or contract | Absent a contrary contract | Absent a contrary contract |
| For others | n/a | Express contract needed |
The particular lien is explained in section 170.
The Act's footnote
The footnote to section 171 in the source text says: "As to lien of an agent, see s. 221, infra. As to lien of a Railway Administration, see the Indian Railways Act, 1890 (9 of 1890), s. 55." So the Act itself points to the agent's lien in section 221 and to a lien of a Railway Administration in another Act. This article does not explain either.
The Act prints no illustration under section 171.
A modern example of our own
Esha, a client, hands share certificates and a set of deeds to a firm described in the section's list, as a bailment, in the ordinary course. The firm is owed a balance on the client's running account. Under section 171, and in the absence of a contract to the contrary, a person named in the list may retain the goods bailed to him as security for the general balance of account.
Now take a trader, Farooq, who stores his stock with a general transporter that is not one of the five named kinds and is owed money on an overall account. Under the second half of section 171, that transporter has no right to retain the goods for the general balance unless Farooq signed an express contract giving it that right. A right to retain for work done on those very goods, if any, would be a question under section 170, not this section.
What can the parties change?
- For the five named persons, the right applies "in the absence of a contract to the contrary", so the contract may exclude it.
- For everyone else, the right exists only if there is "an express contract to that effect". The word "express" tells us that an implied understanding is not enough on the text.
What the section does not say
- It does not describe each named profession.
- It does not say whether the right allows the holder to sell the goods; it speaks only of a right to "retain".
- It does not say what an "express contract" must look like, only that it must be express.
- It does not deal with a lien on money rather than goods.
Practical points
- If you are a named person: keep your terms clear about whether you hold goods as security for a general balance, so the "contrary contract" question does not arise.
- If you are not a named person: if you want a general lien, put it in a written, express clause.
- Customers: read standard terms before handing over goods, because a general lien may be created or excluded by contract.
- Do not confuse a lien (a right to retain) with a pledge, where goods are bailed as security for a debt; see section 172.
Need help with a demand or notice about goods held?
If goods are being held against a balance of account, or you are about to hold them, the basis for the right matters. Our legal notice drafting team can prepare a clear notice that states the claim and the contract term it rests on. Bring the agreement and the account statement.
Key takeaways
- Bankers, factors, wharfingers, attorneys of a High Court and policy-brokers may retain goods bailed to them as security for a general balance of account, absent a contrary contract (s.171).
- No other person has that right unless there is an express contract.
- A general lien is wider than the bailee's particular lien in section 170.
- The Act prints no illustration under section 171.
Read next
- Section 170: bailee's particular lien
- Section 172: pledge, pawnor and pawnee defined
- What is a charge: mortgage vs hypothecation vs pledge explained
Disclaimer: Based on the text of the Indian Contract Act, 1872 as consulted on 1 October 2026. Many questions under this Act turn on case law and on the wording of the particular contract, which this article does not cover. It is general information, not legal advice; check the official text and take advice before acting.