rights of unpaid seller against the goods

8/3/2019 Rights of Unpaid Seller Against the Goods

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RIGHTS OF UNPAID SELLERRIGHTS OF UNPAID SELLERAGAINST THE GOODSAGAINST THE GOODS

Presented to:Presented to:--

Prof.Prof. PrashantPrashant PrabhakarPrabhakar

Presented by:Presented by:--

NitishNitish KumarKumar

2/4/2012 1Nitish Kumar


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Right of Unpaid Seller against the GoodsRight of Unpaid Seller against the Goods

Who is an unpaid seller:

Who is an unpaid seller: Sec 45Sec 45i.i. Payment is not madePayment is not madeii.ii. BE or any other instrument has not beenBE or any other instrument has not been honouredhonoured by theby the

buyer.buyer.

RIGHTS OF UNPAID SELLER:RIGHTS OF UNPAID SELLER:

a.a. Lien on goodsLien on goodsi.i. Sec 47Sec 47to retain possessionto retain possessionii.ii. Sec 48Sec 48------lien will continue even if part delivery has beenlien will continue even if part delivery has been

mademadeiii.iii. Sec 49Sec 49--------Unpaid seller does lose lien just because he hasUnpaid seller does lose lien just because he has

obtained a decree from the court.obtained a decree from the court.iv.iv. He losses his right of lien whenHe losses his right of lien when

i.i. the title to goods is in name of the buyer or his agent,the title to goods is in name of the buyer or his agent,ii.ii. waiving his right of lien, when goods reaches to the buyer or hiswaiving his right of lien, when goods reaches to the buyer or his

agent,agent,iii.iii. where he secures his sale by other security.where he secures his sale by other security.


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Right of Unpaid Seller against theRight of Unpaid Seller against the

GoodsGoods

b.b. Right of stoppage in transitRight of stoppage in transit

a.a. When the goods have been parted withWhen the goods have been parted with

b.b. When the buyer has become insolventWhen the buyer has become insolvent

c.c. Sec 51Sec 51 duration of transitduration of transit----------till it reaches to thetill it reaches to thebuyer or his agent or bailee.buyer or his agent or bailee.

d.d. Sec 52Sec 52 unpaid seller may take possession ofunpaid seller may take possession ofgoods or deliver a notice for taking the goods ingoods or deliver a notice for taking the goods inhis possession to the carrier or its agent.his possession to the carrier or its agent.

e.e. Expenses shall be born by the sellerExpenses shall be born by the seller


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Right of Unpaid Seller against theRight of Unpaid Seller against the

GoodsGoods

c.c. Right of resaleRight of resale Sec 54:Sec 54:i.i. If the goods are of perishable natureIf the goods are of perishable nature ------no notice is requiredno notice is requiredii.ii. If goods are not of perishable nature , a notice is required toIf goods are not of perishable nature , a notice is required to

the buyerthe buyeriii.iii. The losses or damages can be claimed by the sellerThe losses or damages can be claimed by the selleriv.iv. The profits shall be available to the sellerThe profits shall be available to the sellerv.v. If notice not given, seller cannot claim any losses orIf notice not given, seller cannot claim any losses or

damages or profit.damages or profit.vi.vi. The buyer ( in case of resale) get a good title to the goodsThe buyer ( in case of resale) get a good title to the goods

irrespective of the notice.irrespective of the notice. Rights of the unpaid seller against the buyer personallyRights of the unpaid seller against the buyer personally :: SEC 55SEC 55: he can sue in the court of law for recovery of the: he can sue in the court of law for recovery of the

amountamount SEC 56SEC 56: he can sue for damages also if the property in goods: he can sue for damages also if the property in goods

have not been passed to the buyer.have not been passed to the buyer.


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"Unpaid seller" defined"Unpaid seller" defined

(1) The seller of goods is deemed to be an "unpaid(1) The seller of goods is deemed to be an "unpaidseller"seller" withinwithin the meaning of this Actthe meaning of this Act..--

(a) When the whole of the price has not been paid or(a) When the whole of the price has not been paid or

tendered;tendered; (b) When a bill of exchange or other negotiable(b) When a bill of exchange or other negotiable

instrument has been received as conditional payment,instrument has been received as conditional payment,and the condition on which it was received has not beenand the condition on which it was received has not beenfulfilled by reason of thefulfilled by reason of the dishonourdishonour of the instrument orof the instrument orotherwise.otherwise.



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(2)(2) TheThe term "seller" includes any personterm "seller" includes any person

who is in the position of a seller, as, forwho is in the position of a seller, as, forinstance, an agent of the seller to whominstance, an agent of the seller to whomthe bill of lading has been endorsed, or athe bill of lading has been endorsed, or a

consignor or agent who has himself paid,consignor or agent who has himself paid,or is directly responsible for, the price.or is directly responsible for, the price.



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Unpaid seller's rightsUnpaid seller's rights(1)(1) SubjectSubject to the provisions of this Act and of anyto the provisions of this Act and of any

law for the time being in force,law for the time being in force, notwithstandingnotwithstandingthat the property in the goods may havethat the property in the goods may havepassed to the buyer, the unpaid seller of goods,passed to the buyer, the unpaid seller of goods,as such, has by implication ofas such, has by implication of lawlaw--

(a) a lien on the goods for the price while he is(a) a lien on the goods for the price while he isin possession of them;in possession of them;

(b) in case of the insolvency of the buyer a right(b) in case of the insolvency of the buyer a rightof stopping the goods in transit after he hasof stopping the goods in transit after he hasparted with the possession of them;parted with the possession of them;

(c) a right of re(c) a right of re--sale as limited by this Act.sale as limited by this Act.



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Unpaid seller's rights contdUnpaid seller's rights contd

(2) Where the property in goods has not(2) Where the property in goods has notpassed to the buyer, the unpaid seller has,passed to the buyer, the unpaid seller has,

in addition to his other remedies, a rightin addition to his other remedies, a rightof withholding delivery similar to and coof withholding delivery similar to and co--extensive with his rights of lien andextensive with his rights of lien andstoppage in transit where the property hasstoppage in transit where the property has

passed to the buyer.passed to the buyer.



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UNPAID SELLER'S LIENUNPAID SELLER'S LIEN

Sell

er'slienSe

ller's

lien(1) Subject to the provisions of this Act, the unpaid(1) Subject to the provisions of this Act, the unpaid

seller of goods who is in possession of them isseller of goods who is in possession of them isentitled to retain possession of them untilentitled to retain possession of them untilpayment or tender of the price in the followingpayment or tender of the price in the following

cases, namely:cases, namely:--

(a) where the goods have been sold without any(a) where the goods have been sold without anystipulation as to credit;stipulation as to credit;

(b) where the goods have been sold on credit, but the(b) where the goods have been sold on credit, but the

term of credit has expired;term of credit has expired;(c) where the buyer becomes insolvent.(c) where the buyer becomes insolvent.

(2) The seller may exercise his right of lien notwithstanding(2) The seller may exercise his right of lien notwithstandingthat he is in possession of the goods as agent orthat he is in possession of the goods as agent or baileebailee

for the buyer.for the buyer.2/4/2012 9Nitish Kumar


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Part deliveryPart delivery

Where an unpaid seller has madeWhere an unpaid seller has madepart delivery of the goods, he maypart delivery of the goods, he may

exercise his right oflien on theexercise his right oflien on theremainder, unless such part deliveryremainder, unless such part delivery

has been made under suchhas been made under suchcircumstances as to show ancircumstances as to show an

agreement to waive the lien.agreement to waive the lien.



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Termination of lienTermination of lien

(1)(1) The unpaid seller of goods loses his lienThe unpaid seller of goods loses his lienthere onthere on--

(a) when he delivers the goods to a carrier or other(a) when he delivers the goods to a carrier or other

baileebailee for the purpose of transmission to the buyerfor the purpose of transmission to the buyerwithout reserving the right of disposal of the goodswithout reserving the right of disposal of the goods

(b) when the buyer or his agent lawfully obtains(b) when the buyer or his agent lawfully obtainspossession of the goods;possession of the goods;

(c) by waiver thereof.(c) by waiver thereof.(2)(2) The unpaid seller of goods, having a lien thereon,The unpaid seller of goods, having a lien thereon,

does not lose his lien by reason only that he hasdoes not lose his lien by reason only that he hasobtained a decree for the price of the goods.obtained a decree for the price of the goods.



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STOPPAGE IN TRANSITSTOPPAGE IN TRANSIT

Right of stoppage in transitRight of stoppage in transit

Subject to the provisions of this Act, when theSubject to the provisions of this Act, when thebuyer of goods becomes insolvent, the unpaidbuyer of goods becomes insolvent, the unpaidseller who has parted with the possession ofseller who has parted with the possession ofthe goods has the right of stopping them inthe goods has the right of stopping them intransit, that is to say, he may resumetransit, that is to say, he may resumepossession of the goods as long as they are inpossession of the goods as long as they are inthe course of transit, and may retain themthe course of transit, and may retain themuntil payment or tender of the priceuntil payment or tender of the price



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Duration of transitDuration of transit

(1) Goods are deemed to be in course of transit(1) Goods are deemed to be in course of transitfrom the time when they are delivered to afrom the time when they are delivered to acarrier or othercarrier or other baileebailee for the purpose offor the purpose oftransmission to the buyer, until the buyer ortransmission to the buyer, until the buyer orhis agent in that behalf takes delivery of themhis agent in that behalf takes delivery of themfrom such carrier or otherfrom such carrier or other baileebailee..

(2) If the buyer or his agent in that behalf(2) If the buyer or his agent in that behalfobtains delivery of the goods before theirobtains delivery of the goods before theirarrival at the appointed destination, thearrival at the appointed destination, the

transit is at an end.transit is at an end.2/4/2012 13Nitish Kumar


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(3) If, after the arrival of the goods at the(3) If, after the arrival of the goods at the

appointed destination, the carrier or otherappointed destination, the carrier or other baileebaileeacknowledges to the buyer or his agent that heacknowledges to the buyer or his agent that heholds the goods on his behalf and continues inholds the goods on his behalf and continues inpossession of them aspossession of them as baileebailee for the buyer or hisfor the buyer or his

agent, the transit is at an end and it isagent, the transit is at an end and it isimmaterial that a further destination for theimmaterial that a further destination for thegoods may have been indicated by the buyer.goods may have been indicated by the buyer.

(4) If the goods are rejected by the buyer and the(4) If the goods are rejected by the buyer and the

carrier or othercarrier or other baileebailee continues in possession ofcontinues in possession ofthem, the transit is not deemed to be at an end,them, the transit is not deemed to be at an end,even if the seller has refused to receive themeven if the seller has refused to receive themback.back.



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(5) When goods are delivered to a ship chartered by the(5) When goods are delivered to a ship chartered by thebuyer, it is a question depending on the circumstancesbuyer, it is a question depending on the circumstances

of the particular case, whether they are in theof the particular case, whether they are in thepossession of the master as a carrier or as agent of thepossession of the master as a carrier or as agent of thebuyer.buyer.

(6) Where the carrier or other(6) Where the carrier or other baileebailee wrongfully refuses towrongfully refuses to

deliver the goods to the buyer or his agent in thatdeliver the goods to the buyer or his agent in thatbehalf, the transit is deemed to be at an end.behalf, the transit is deemed to be at an end.

(7) Where part delivery of the goods has been made to the(7) Where part delivery of the goods has been made to thebuyer or his agent in that behalf, the remainder of thebuyer or his agent in that behalf, the remainder of thegoods may be stopped in transit, unless such partgoods may be stopped in transit, unless such partdelivery has been given in such circumstances as todelivery has been given in such circumstances as toshow an agreement to give up possession of the wholeshow an agreement to give up possession of the whole

of the goodsof the goods..



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How stoppage in transit is effectedHow stoppage in transit is effected

(1) The unpaid seller may exercise his right of(1) The unpaid seller may exercise his right ofstoppage in transit either by taking actualstoppage in transit either by taking actualpossession of the goods, or by giving notice ofpossession of the goods, or by giving notice ofhis claim to the carrier or otherhis claim to the carrier or other baileebailee in whosein whose

possession the goods are. Such notice may bepossession the goods are. Such notice may begiven either to the person in actual possessiongiven either to the person in actual possessionof the goods or to his principal. In the latterof the goods or to his principal. In the lattercase the notice, to be effectual, shall be given atcase the notice, to be effectual, shall be given at

such time and in such circumstances, that thesuch time and in such circumstances, that theprincipal, by the exercise of reasonableprincipal, by the exercise of reasonablediligence, may communicate it to his servant ordiligence, may communicate it to his servant oragent in time to prevent a delivery to the buyer.agent in time to prevent a delivery to the buyer.



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(2) When notice of stoppage in transit is(2) When notice of stoppage in transit isgiven by the seller to the carrier or othergiven by the seller to the carrier or otherbaileebailee in possession of the goods, he shallin possession of the goods, he shallrere--deliver the goods to, or according todeliver the goods to, or according tothe directions of, the seller. The expensesthe directions of, the seller. The expensesof such reof such re--delivery shall be borne by thedelivery shall be borne by the

seller.seller.



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Effect of subEffect of sub--sale or pledge by buyersale or pledge by buyer

(1)(1) Subject to the provisions of this Act, the unpaidSubject to the provisions of this Act, the unpaidseller's right of lien or stoppage in transit is notseller's right of lien or stoppage in transit is notaffected by any sale or other disposition of theaffected by any sale or other disposition of the

goods which the buyer may have made, unlessgoods which the buyer may have made, unlessthe seller has assented thereto:the seller has assented thereto:



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PROVIDED that where a document of title toPROVIDED that where a document of title to

goods has been issued or lawfully transferred togoods has been issued or lawfully transferred toany person as buyer or owner of the goods, andany person as buyer or owner of the goods, andthat person transfers the document to a personthat person transfers the document to a personwho takes the document in good faith and forwho takes the document in good faith and for

consideration, then, if such last mentionedconsideration, then, if such last mentionedtransfer was by way of sale, the unpaid seller'stransfer was by way of sale, the unpaid seller'sright of lien or stoppage in transit is defeated,right of lien or stoppage in transit is defeated,and, if such last mentioned transfer was by wayand, if such last mentioned transfer was by way

of pledge or other disposition for value, theof pledge or other disposition for value, theunpaid seller's right of lien or stoppage in transitunpaid seller's right of lien or stoppage in transitcan only be exercised subject to the rights of thecan only be exercised subject to the rights of the

transfereetransferee..2/4/2012 19Nitish Kumar


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(2) Where the transfer is by way of pledge,(2) Where the transfer is by way of pledge,the unpaid seller may require thethe unpaid seller may require the pledgeepledgeeto have the amount secured by the pledgeto have the amount secured by the pledgesatisfied in the first instance, as far assatisfied in the first instance, as far aspossible, out of any other goods orpossible, out of any other goods orsecurities of the buyer in the hands of thesecurities of the buyer in the hands of the

pledgeepledgee and available against the buyer.and available against the buyer.



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Sale not generally rescinded by lienSale not generally rescinded by lien

or stoppage in transitor stoppage in transit

(1)(1) Subject to the provisions of this section, aSubject to the provisions of this section, acontract of sale is not rescinded by the merecontract of sale is not rescinded by the mereexercise by an unpaid seller of his right of lienexercise by an unpaid seller of his right of lien

or stoppage in transit.or stoppage in transit.(2)(2) Where an unpaid seller who has exercised hisWhere an unpaid seller who has exercised his

right of lien or stoppage in transit reright of lien or stoppage in transit re--sells thesells thegoods, the buyer acquires a good title theretogoods, the buyer acquires a good title thereto

as against the original buyer, notwithstandingas against the original buyer, notwithstandingthat no notice of the rethat no notice of the re--sale has been given tosale has been given tothe original buyer.the original buyer.



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(3) Where the goods are of a perishable nature, or(3) Where the goods are of a perishable nature, orwhere the unpaid seller who has exercised hiswhere the unpaid seller who has exercised hisright of lien or stoppage in transit gives notice toright of lien or stoppage in transit gives notice tothe buyer of his intention to rethe buyer of his intention to re--sell, the unpaidsell, the unpaidseller may, if the buyer does not within aseller may, if the buyer does not within areasonable time pay or tender the price, rereasonable time pay or tender the price, re--sellsellthe goods within a reasonable time and recoverthe goods within a reasonable time and recoverfrom the original buyer damages for any lossfrom the original buyer damages for any lossoccasioned by his breach of contract, but theoccasioned by his breach of contract, but thebuyer shall not be entitled to any profit whichbuyer shall not be entitled to any profit whichmay occur on the remay occur on the re--sale. If such notice is notsale. If such notice is notgiven, the unpaid seller shall not be entitled togiven, the unpaid seller shall not be entitled torecover such damages and the buyer shall berecover such damages and the buyer shall be

entitled to the profit, if any, on the reentitled to the profit, if any, on the re--sale.sale.2/4/2012 22Nitish Kumar


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(4) Where the seller expressly reserves a(4) Where the seller expressly reserves aright of reright of re--sale in case the buyer shouldsale in case the buyer shouldmake default, and, on the buyer makingmake default, and, on the buyer makingdefault, redefault, re--sells the goods, the originalsells the goods, the originalcontract of sale is thereby rescinded, butcontract of sale is thereby rescinded, butwithout prejudice to any claim which thewithout prejudice to any claim which the

seller may have for damages.seller may have for damages.



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rights of unpaid seller against the goods

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