Question: What is Particular
Lien?
Answer:
Particular lien is a right of the creditor to retain the
goods of the debtor in respect of a particular debt and this debt must have arisen out of service rendered or
money expended on the goods.
Question: What is General
Lien?
Answer:
General Lien
is a right of the creditor to retain in possession of the goods and securities
till the dues are paid. In case of General Lien the creditor has no right to
sell or liquidate the property without filing suit against the debtor.
Question: What is Banker’s
Lien?
Answer:
Banker’s Lien is more than a
General Lien, it is an implied pledge . In the event of the default of the
borrower, the banker has a power of sale to liquidate without intervention of
the court.
Question: What is Banker’s
Lien?
Answer:
The Banker sometimes asks a borrower to execute a
letter declaring that his assets are free from encumbrance at the time advance
is made. The borrower also undertakes that the assets stated in the said letter
shall not be encumbered or disposed of without the Bank’s permission in writing
so long the advance continues. This undertaking is a Negative Lien.
Question: What is Equitable Lien?
Answer:
An
Equitable Lien is an equitable right conferred by law to a charge upon the
movable or immovable property of another until certain claim is satisfied such
as, a partner who pays partnership debts
on dissolution has an equitable lien on the property of the partnership.
Question: What is Maritime
Lien?
Answer:
A maritime lien is a right specially binding a ship
her furniture, machinery, cargo and freight for the payment of claim based upon
the maritime law. For example, the
person who has suffered losses as a result of collision due to ship’s
negligence has the right of lien on ship and her belongings.
Question: What are the
essential conditions for exercising the right of lien by Banker?
Answer:
a) The goods or securities over
which the right of lien shall be exercised must be in the possession of Bank.
b) There must be a lawful
advance due to the bank.
c) There shall be no contract
contrary to lien
d) Goods or securities over
which right of lien shall be exercised must be suitably discharged in favor of
bank.
Question:
What are the rules/condition/formalities for exercising the right of “Set-Off”
by Banker?
Answer:
a) Mutual debts must be certain: Before exercising
right of set off the claim and the counter claim must be determined
accurately.
b) Debts must be due: Only those debts which are due
and revocable on the date of set off can be the subject of set off.
c) Debts in the same right: The loan account and the deposit account which
will be appropriated must be in the same right.
d) No agreement to the contrary: The right of set off can not
be exercised if there is any agreement
between Banker & Borrower to the contrary of set off.
e) Notice of set off: Before exercising right of set off Banker’s should serve notice of set
off to the borrower before reasonable time.
Question: Under what
circumstances Banker can exercise the right of Set-Off without providing notice
to the customer:
Answer:
a) On the death, insanity or
insolvency of the customer.
b) On the insolvency of a
partner of a firm.
c) On the winding up of a
company.
d) On receipt of a garnishee order.
e) On receipt of an information
of a second mortgage over the security which is charged to the bank.
f)
On
receipt of a notice of assignment of the credit balance of the customer.
Question: What is Legal
Assignment?
Answer:
A Legal Assignment is one where,
a. Assignment must be in
writing duly signed by the assignor. In banking practice, it is done through a registered irrevocable power
of attorney where transfer of actionable claim is clear & absolute.
b. A written notice of
assignment containing the name and
address of the assignee is to be sent by the assignor to the debtor.
c. The assignee informs the
principle debtor about the assignment and also gets confirmation of the notice.
In banking business, banker informs the assignor’s debtor with a copy of P.A.
and gets the confirmation of it.
Question: What is
equitable Assignment?
Answer:
An equitable assignment is one which does not
fulfill any condition of Legal Assignment mentioned above. Banker does not
allow equitable assignment in any case.
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