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Lien, pledge, Rule in claytons case- banking terms

lien The right of one person to retain possession of goods owned by another until
the possessor’s claims against the owner  have been satisfied. The lien may be
general, when the goods are held as security for all outstanding debts of the owner,
or  particular,  when  only  the  claims  of  the possessor in respect of the goods held
must be satisfied. A banker’s lien applied  to certain financial documents held by a
bank on behalf of a customer who owes money to the bank
Type of charge that gives a bank automatic claim over aborrower's property or assets that come in bank'spossession in the normal course of its business. Bankers'lien is both a possessory lien and special lien: the bank has the right to seize and sell the defaulting borrower's property in its possession, after giving a reasonable noticebut without going through the foreclosure procedure.Enforcement of a banker's lien, however, may depend on the type of the property and the reason it was handed over to (or came in possession of) the bank. Bills of exchange,credit cash-balancesnegotiable securities (such as clearedchecks and drafts), and promissory notes, may be claimed under this lien. But it is not applicable where the borrower's property was handed over to the bank for a specific purpose, such as for safe custody (as in the bank's safe deposit boxes) or for sale through a department of the bank.

Pledge:  When a customer takes loan against jewels he pledges the jewel to the bank.  Similarly a customer availing loan on key cash credit basis pledges the goods to the banker by keeping them in a godown under lock and key control of the bank.  Pledged goods are to be insured and the pledgee (banker) has to take reasonable care to protect the property pledged.

negative pledge A covenant in a loan agreement in which the borrower promises
that no secured borrowings will be made during the life of the loan or will ensure that
the loan is secured equally and ratably with any new borrowings as specifically
pledge:  1. Cash deposit or placing of owned property by a debtor(the pledger) to a creditor (the pledgee) as a security for aloan or obligation. The pledgee has an implied right to confiscate and/or sell the pledged property to satisfy his or her claim in case of a default.
2. Property so deposited.

Rule in Claytons case:  First credit wipes out the first debit.  This is applied in the case of overdraft transactions to save the limitation period for filing of suits.  9SOURCE:


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