Legal Question in Banking Law in India

A lien is a right of a person to retain a property which is in his ownership or possession till such time the debt or other obligation (for which such lien is conferred) is discharged. A negative lien is a right of a person requiring retention of a property by another person belonging to the latter which is in the latter�s possession or control until certain stated obligation is discharged. Neither a lien nor a negative lien gives the implied right to bring a property to sale, but both confer a right of retention of a property as a result of which the person to whom the property belongs is legally precluded from disposing of the property without conferring the right to bring that property to sale to discharge the obligation, except in the event that the principal borrower is proved to be insolvent by law, or where the parties (bank and guarantor) have explicitly agreed to such sale in this event.

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