Right of Retainer:
An agent could keep, out of any sums received on account of the principal in the
business of the agency, all money due to himself in value of advances created or
expenses appropriately incurred by him in conducting such business, and as well
such compensation as may be payable
to him for acting as an agent.
Any agent has the authority above the principle's quantity over:
Turner Morrison & Co., Ltd v. Commissioner of Income Tax
- The sum predictable to be paid to the agent which was boned by him in
- The sum that must be paid to the agent as compensation for his work in
In this case, the issues raised relate to whether or not within the exercise of
the right of lien, the agent will become a landlord of the property of the
master or not. The Port Said Salt Association Ltd., an organization incorporated
within the United Kingdom. The corporation had headquartered in Egypt and
happening its business in India through Turner Morrison and Co. Ltd., (the
assesses) purchasable in India.
It absolutely was involved within the business
of collecting the proceeds of sale and got a commission of 22.5% from the
proceedings it collected. On the subsequent facts and Circumstances, it
absolutely was identified as an agent under Section 43 of the Indian
Income-tax Act. The Calcutta High Court held that assesses which was entrusted
with the work of collecting the sale income were agents of the firm and not the
post office. They received only income for the firm or association not for their
Right To Remuneration
In the absence of several special contracts, payment for the presentation of
any act isn't due to the agent until the completion of such act but an agent may
detain money conventional by him on account of goods sold, even as the entire of
the goods consigned to him for sale may not have been sold, otherwise although
the sale may not be truly complete. An agent isn't entitled to remuneration if
not he's entitled to the compensation if there is a special contract to that
effect. In case of the partial sale of goods, an agent can keep money or in case
of not totally completion of sale.
Khursheed Alam v. Asa Ram
All agent has right to get agreed remuneration or any sensible remuneration. In
the case of Khursheed Alam v. Asa Ram
, the issue arises concerning the
reasonable amount wanted to be given to an agent by the principal. Here the
plaintiff as an agent was selected by the defendant. He was asked to sell the
property situated in Lahore to anybody and was promised commission for the
same. The defendant asked him to find out another client for the sale of another
The petitioner sold his land to his brother. The defendant was
deprived of giving commission to the plaintiff as he thought the plaintiff would
pay land for himself. The court held that if the second customer was
the plaintiff's sibling it doesn't imply that the plaintiff was permitted
compensation and in case of not having a written contract he would get a
sensible amount of compensation. Vasanji Modiji v. Karsondas Tejpal
case, the same issue of reasonable remuneration, arises. The plaintiff was
employed by the defendant as a broker for the mortgage of 3 properties of the
defendant. Motivated of negotiating by the bank for forty percent of the value
of a property, the plaintiff was unsuccessful to negotiate with the defendant.
Regarding 3 months later, the defendant borrowed through another broker, Rs. 110000
from a similar bank on a mortgage of one of his properties.
Right of Lien on Principal's Property
Lien in its primary sense could be a right in one man to retain that which is
legally and incessantly in his possession belonging to a different until the
there and aggregated cases of the individual under lock and key are satisfied.
During this essential sense is given by law and not by contract. The possession
of the product by the person claiming the proper of lien is anterior to
its exercise. If the said person isn't in possession then the exercise of the
right is not possible.
The lien never emerges except if the bailee has a
privilege to proceeding with ownership of the merchandise, so that if bailor has
the right to take out the goods from time to time, there is no lien, in the
absence of an express agreement that the goods shall remain 'in pawn' in spite
of temporary removal by the bailor.
Valpy v. Gibson
- Right of Lien
The right of lien is one of the voluntary seller's rights against the goods
which is transferred to the purchaser. It is the unpaid seller's right to retain
the goods until the entire cost is paid or tendered. Lien can be exercised
merely for non-payment of the price and not for some other charges owing against
- The word lien intends to "hold the ownership of" as per segment 47(1) the
neglected merchant of
Merchandise that is in control of them is qualified for keep ownership of them
till installment or delicate of the expense inside the accompanying cases that
- Where the goods have been sold not including any requirement as to
- Where the goods are sold on credit however the term of credit has
- Where the buyer becomes ruined
The right can merely be exercised on the accomplishment of two
- The unpaid seller must be in real possession of goods
- The neglected vendor can hold the products just at the installment of
the cost of goods.
The right of lien is not connected to the title of the goods but is worried
about the possession of the goods, therefore the goods have to be in real
possession of the seller in order to exercise this right, which should even be
possible on the off chance that he has the products as a Bailee or a specialist
and ought not basically to be the proprietor. Subsequently the merchant anyplace
he has moved the reports to the purchaser his lien isn't crushed as long as he
stays in the ownership of the products.
But if the buyer has transferred the
documents of title to a bona fide purchaser, the seller's lien is overpowered,
as the seller is unacceptable to exercise a right of lien while the goods were
in the hands of the transporter. Where the goods are sold on credit the right of
lien is balanced during the term of credit. Excluding on end of that expression,
if the goods are motionless in the possession of the seller his lien revives.
The right of lien exists merely for the value of goods as especially put in
Section 46(1) (a) as detailed in the case of depends on General Credit Corp. v.
Morgan, The right completely Transport winning the statutory provisions and
losing any reasonable considerations. The seller is so not entitled to a lien
for any other charges i.e. charges for storage or the like. In the case of Somes
v. British Empire Shipping Co. that where the cost has been tendered the seller
can't claim to return the goods further for the expenses incurred by him on
storage during the stage that he was investing the goods in the exercise of his
At present, since the right of lien is based merely on possession, as soon as
the possession of
goods is misplaced the right of lien is also lost. The voluntary seller loses
the lien thereon.
At the point when he takes care of business for a transporter or other Bailee
for the explanation of transmission to the buyer without holding the right of
the expulsion of the merchandise:
- When the purchaser or his representative legally gets ownership of the
- By waiver thereof
The unpaid seller of produce having a lien thereon doesn't lose his lien by
reason merely that he has obtained a decree for the value of the goods.
Section 47 additionally accommodates the deficiency of lien by the neglected
vender inside the accompanying cases:
- When he gets it done for the transporter or other Bailee with the end goal of
transmission to the purchaser without holding the right of disposal of the
- When the buyer or his agent legally obtains possession of the goods.
- By wavier of the lien.
The base of the right is the non-payment of the value and thus if the buyer is
eager to pay the price there is no query of exercise of the right of lien if the
buyer pays the price the right of lien which might have existed previous is
completed. It is given under section 47(1) that the voluntary seller is allowed
to exercise his right of lien until compensation or tender of the price in
respect of sure goods, the compensation of price hence terminates the seller's
right to keep the goods.
The seller as well loses the right of lien when he delivers the goods to a
transporter other than a Bailee for the purpose of transmission to the purchaser
not including reserving the right of removal of the goods. The right of lien
proceeds inasmuch as the neglected merchant gets it done isn't finished and the
vender has the ownership of the merchandise.
According to section 48 if the seller has delivered a fraction of the goods he
can exercise his right of lien on the residual part of the goods unless and
until the part delivery was made under such conditions as to show the right of
lien had been waived because sometimes delivery of part may function as a
release of the whole. Such a waiver might be assumed when the dealer permits a
time of credit to the purchaser or conveys a piece of the merchandise to the
purchaser or his representative.
- Banker's Lien
A broker's lien, while it's not avoided by special contract, express or
suggested, stretches out to all bills, checks, and cash endowed or paid to him,
and all protections stored with him, in his character as a banker. Rigorously,
it is bound to protections and properties in the authority of the banker; and in
regard of things which has a place with the client, and held by the bank as
security; regardless of whether they are in something very similar or various
In the event that thing is in control of the bank, however, claimed by
the client, has no privilege of lien over it. A store of assets with a banker is
dependent upon the investor's lien for the client's overall obligations to him,
except if can demonstrate consent to surrender his overall lien.
Consequently, if a specific sum is because of a bank in one record, it might
hold as security or other portable that came into its hand in another record;
including reimbursement of ensuing advances.
A banker's lien would likewise
apply to debatable instruments transmitted by client for assortment. Except if,
in any case, coordinated, the returns of such assortment might be utilized by
the bank for diminishing the client's charge balance.
- Extent of the right of lien
The extent of bailee's lien is in regard to services including the activity of
work or expertise delivered by him in regard to the products bailed. The
services delivered with the end goal of lien should be restricted to the work or
ability used by the bailor over the products bailed; the
lien has nothing to do with some other sort of services.
Such work and ability
more likely than not been spent, and thirdly, the lien apply just to such
products over which the bailee has presented his work and expenses, and not to
different merchandise. Nor does any lien connect to
products bailed to an individual with the end goal of his working with it, and
not upon it.
Simple making arrangement for capacity of products in a go down for
installment would not draw in his An arrangement since no improvement in the
merchandise does not happen, nor is any work or expertise practiced in regard of
- Lien an implied pledge
A banker's lien is an overall lien perceived by law. The overall lien on the
banker is viewed as something in excess of a normal lien; it's an implied
pledge. This privilege combined with rights u/s 43 of the Negotiable Instruments
Act, 1881permits bills, notes, and cheques, of the banker, being viewed as a
holder for worth to the extent of the total in regard of which the lien exists
can understand them when due; however on account of the other debatable
instruments for example bearer bonds, coupons, and share warrants to bearer,
coming into the broker's hands and accordingly getting obligated to the lien,
the personality of a pledge empowers the banker to sell them on default, if a
period is fixed for the installment of the development, or, where no time
is fixed, after demanding for reimbursement and sensible notification of
expectation to sell and apply the returns in the liquidation of the sum because
of him . The privilege of offering reaches out to all properties and protections
having a place with a client in the possession of a banker, aside from title
deeds of steady property which clearly can't be sold.
Goods were sold and sent by the dealers in line with the purchaser to the
transportation specialists of the purchaser and were put on board a boat by
those specialists. In this manner, they were re-landed and sent back to the
vendors with the end goal of re-pressing. While they were as yet in the
ownership of the vendors for that reason, the purchaser got wiped
out. Immediately the dealers wouldn't convey them to the purchaser's trustee in
liquidation endless supply of the cost. Held, that seller had lost their lien by
delivering the goods to the shipping agents, and their denial to deliver the
goods to the trustee was illegitimate.
Union Bank of India v. K.V. Venugopalan
It was held by the court that the fixed store cash stopped with the bank is
stringently a credit to the bank. The investor regarding the FD is a borrower.
The contributor would appropriately stop to be the proprietor of the cash in
fixed deposit. The said cash becomes cash of the bank, empowering the bank to do
as it enjoys that nonetheless, with the commitment to reimburse the obligation
on development. In a similar decision, it was additionally held that the bank
being a debt holder in regard to the cash in FD reserved no right to pass into
services the doctrine of banker's lien and the cash in Fixed Deposit.
Right to be indemnified
The business will undoubtedly repay the legitimate lawful act done by his agent
in exercise of the authority given upon him. The agent should act as Indicated
by the principal as the agent is illustrative of the principal and act
completely for his benefit.
Kishan Lal v. Bhanwar Lal
In this important case, the offended party was an agency both at Jodhpur and
Indore in the name of "Kanmal Surajwal and Kanmal Kishwnmal" individually and
the litigant went into a few agreements for the buy and deal through the
offending party firm at Indore. The exchange demonstrated unrewarding to the
litigant and with the exception of a little benefit of Rs 103 annas and all of
the rest exchange finished in misfortune and misfortune accumulated to amount of
Rs 21423, the offended party paid the sum to an outsider in the interest of
respondent and offended party get in all amount of Rs 11457 which respondent
paid every once in a while in the offending party firm in jodhpur and the
respondent needed to pay Rs 9861.
This suit was not identified with the deal and
acquisition of bullion, It was suited by an agency asserting for losses and
expenses brought about by him for the respondent. For this situation, Justice Mukherjee said "the agent is qualified for recuperating from the principal in
all losses and expenses caused by him in the interest of principal in the lead
of business or an
authorized approved by the principal.
- Limits of Indemnity
If an agent has incurred losses or damages, not due to his fault in that
circumstance the principal has to reimburse the agent for the losses and damages
incurred, the agent is not at liberty to all losses incurred by him; the
principal will compensate the agent only while the losses and
damages are usual and immediate.
Therefore agent isn't entitled to claim
indemnification from the principal if the losses and damages happen on his
default or if the agent executes any contract which is further than the extent
of authority in these circumstances also the principal isn't responsible to
compensate the agent due to he was working outside the jurisdiction of
Duncan v. Hill
There was no inferred promise by a purchasing principal to his agent that he
will reimburse him from the results of his own wrong like indebtedness or have
sold at a loss in breach of his agreement with the principal.
- Lawful acts done
It is a fundamental condition that the agent should work as per the principal,
it isn't adequate that the agent played the act in good faith or the act of the
agent is honest. A specialist ought to lawfully play out the act then just
he/she can be repaid by the principal. Be that as it may, an agent could
guarantee the reimbursement in the event that he/she doesn't know about
the unlawfulness of act.
Kantilal v. Ranchhoddass
the Bombay Securities Contract Control Act doesn't preclude going into an
agreement however the agreement ought to be as per the principles, the
arrangement of the Bombay Securities act bring 2 consequences:
- Contract not as per with the standards of Bombay Securities is void
- No case for broker will be permitted. Indeed, even an agreement is held
legitimate the agent
Couldn't guarantee commission under area 6 of Stock Broker Association. The
agent must be reimbursed by the principal if the agreement is void not when the
agreement is unlawful. Thus, for this situation, the broker was approved by the
principal to go into a transaction for the acquisition of an offer according to
the demonstration for benefit of the principal; an agent is qualified to be
repaid regardless of whether the agreement gets void.
Right to Compensation
The Agent has the right to be made up for any injury or loss endured by him
because of the absence of expertise and competency of the Principal.