When goods are not in possession of Port Authority, there is no actual lien to invoke Section 171 of Indian Contract Act, 1872 and claim of Port cannot be treated as a Secured Creditor for distribution of liquidation assets under Sec. 53 of Code – V O Chidambaranar Port Authority v. Shri Rajesh Chillale, RP of IndBharath Power Gencom Ltd. – NCLAT Chennai
December 30, 2023
Hon'ble NCLAT held that a careful reading of the Section of 171 Indian Contract Act, 1872 would show that wharfingers as the Appellant claiming itself to be a security for a general balance of account any goods bailed to them whereas in the present case, the goods are not in possession of the Appellant which is also admitted by the Appellant during the course of hearing and thus there was no actual lien to invoke Section 171 of the Act.
