In M.V. Al Quamar v. Tsavliris Salvage (International) Ltd [59], the SC considered that there are 2 attributes for maritime privilege: it is generally accepted that the banker`s privilege gives a banker the right to retain the guarantee in relation to the general balance account. The application of Section 171 to the general privilege of a banker can be explained by various judgments. As in Diplock in Tappenden v. Arthur [10], which describes the nature of a privilege, it states: [76] section 170 of the Indian Contract Act of 1872 deals with a particular privilege, while section 171 deals with general privilege. Also in the case of Agra Banks` claim,[40] it was considered that a general privilege may be excluded by an explicit or implicit special agreement, the agreement being clearly incompatible with the existence of such a privilege. Similarly, the privilege of a banker extends to all bills of exchange, cheques and funds entrusted to him or paid to him, as well as to all securities deposited with him in his capacity as banker, unless this is excluded by an explicit or implicit special contract. This was held in Misa v. Currie.[41] Pursuant to this particular section, the parties who are entitled to and reserve a general privilege are as follows: The Indian Contracts Act, 1872 (hereinafter referred to as the “Act”) defines general privilege as the right to hold the goods as security for a general account balance. The bailee has the right to store all goods that have been deposited for any amount due to him, whether for such goods or for other goods.

Section 171 of the Act states that “the general privilege of bankers, letter carriers, wharfingers, lawyers and policy brokers – bankers, letter carriers, wharfingers, high court counsel and policy brokers may, in the absence of a contract to the contrary, retain as security for a general balance of the account all property deposited with them; but no other person has the right to retain the goods supplied to him as a guarantee for this balance, unless there is an express contract to that effect. Privileges are considered a “primitive solution, and customary law does not allow it.”[2] Since anyone could keep products of one kind or another, a general privilege could impede trade and commerce. In English law, the banker`s privilege is considered an implied privilege. [32] Under Indian law, the secured creditor, in particular the lien, has the right to sell the goods in order to receive the amount due against him in the event of default by the secured creditor in accordance with section 176 of the Act. In case of deposit, only the right to keep the goods is in possession of the bond and not the right to sell. However, based on section 6(1)(f) of the Banking Regulation Act, 1949,[33] this provision can be considered to give the bank the power to sell. Therefore, we can sort of say that it is an implicit promise. Another plausible difference is that a general privilege can only be exercised in relation to someone else`s property and not in relation to one`s own property. This principle was determined and explained analytically in the case of Brahmaya vs Thangavelu.[33] Expenses that are much higher than they should be are called additional orbit costs. When it comes to covering the required and additional orbit costs that the seller or agent reserves, the importance of the privilege comes into play. For example, the Supreme Court of Madhya Pradesh in Gopaldas v. Thakurdas[6] reviewed the agent`s lien provision and concluded that the agent`s sale of the principal`s property could not be justified because it did not have jurisdiction over the principal`s property.

However, the agent has paid for a portion of the goods out of his own pocket and, as an implied privilege, he has the right to claim as much of his expenses as possible by selling the goods in his possession. In conclusion, I would like to say that it is very important to understand what a privilege is and what it makes sense, as well as the variety of types of privileges. This study helps to understand various other concepts under special contract law such as pledge, the concept of bailee, the sale of goods, the search for goods, the concept of agent and sub-agent, property privileges, taxes and loans, and the sea. It can therefore be said that a lien is a lender`s claim on a collateral element that can be legally sold if the borrower does not repay the loan. This is important because it protects lenders in the event of default, and also because loans come with collateral that has become less risky for buyers these days because they can borrow at lower interest rates. We can give an example, as when we buy a car, it is important to check the privileges against the vehicle. Because if there is an unpaid debt on the car, the buyer runs the risk that it will be taken back into possession by the lender or service provider. So we can say that knowledge of privileges and its nature is very important and makes itself more aware and informed as a customer. In other words, if the seller does not sell its goods on credit, it expects the buyer to immediately pay the amount of the goods. And if the buyer refuses to pay or expresses his reluctance to pay the price, the seller can exercise the privilege and keep the goods with him until the buyer has paid the full amount.

Paget`s Banking Act[12] states: “It must be assumed that the general privilege extends only to the safety of the customer.” The Tribunal in Vijay Bank v. Naveen Mechanised Construction, 2003[13] also stated that “a guarantor is allowed to withdraw his securities from the bank when the bank guarantee for which they were deposited expires. The bank was not allowed to keep them for the loan of another company, where the guarantor was also a director. In the case of Hatton V. Car Maintenance Company, Limited, the owner of the car and the company entered into an agreement in which the condition was to maintain, repair and supply sufficient gasoline to the car. The owner was supposed to pay Rs. 8000 to the owner of the company, but the company did not receive the above amount. Then the company exercised the privilege over the car. When the goods are handed over to the bank, it is said to be a privilege of the banker. It is strictly limited to securities and real estate in the custody of the banker[28] and applies only in cases where the rescued property belongs to the customer but is held by the bank as collateral. If the goods are in the possession of the bank, but they are not the property of the customer, the bank has no privilege over them. [29] In addition, this duty is available to insure the general balance in respect of any goods.

It was in the case of state bank of india, Kanpur v. Deepak Malviya and Ors. [30], where the Allahabad Supreme Court ruled that if the bank is entitled to a certain amount of money in an account, the bank can hold money or other movable property in its hands for another account as collateral. In the present case, the Court merely held, with regard to section 171 of the Act, that the general principles governing the banker`s privilege expressly authorize the bank to withhold the pledged assets, such as ornaments, by claiming the lien on them until the bank`s money is not cleared in relation to the account. .