I am giving below a passage which I consider as a starting point for the thoughts in respect of lien of auditors. The Indian law is heavily influenced by English law . Our Institute while preparing the materials have relied on what the Institute of England and wales said about lien. Please note that the English Institute in turn relied on Woodworth V conroy. The said decision according to me cannot be blindly applied in India. Even in England, now there is a tendency to crticise woodworth decision. Anyway, I am giving the passage from GUIDANCE NOTE issued by Hongkong CPA.
It has long been thought, and it is now established by a decision of the Court of Appeal, that an
accountant has a particular lien over documents belonging to his client in respect of which the
accountant has performed work for which he has not been paid the fee due. In Woodworth v Conroy
 Q.B. 884, Lord Justice Lawton (with whom the rest of the court agreed) said: "I would
adjudge that accountants in the course of doing their ordinary professional work of producing and
auditing accounts, advising on financial problems, and carrying on negotiations with the Inland
Revenue Department in relation to both taxation and rating have at least a particular lien over any
books of account, files and papers which their clients delivered to them and also over any documents
which have come into their possession in the course of acting as their client's agents in the course of
their ordinary professional work." He added that accountants may enjoy a wider lien than this but
that it was unnecessary for the purposes of the case to deal with that question. Despite the fact that
the point was kept open, counsel advises that in the absence of a special contractual provision
accountants do not have a right of general lien in law and members are advised not to assert such a
right against a client unless they are expressly given that right by their contract with the client.
I will get back to you with more information on lien and the correct law on this point. Plesae give me time.
siva208 @ yahoo.com