Unpaid Seller

 Examine the rights and duties of an unpaid seller in the light of Indian Sale of Goods Act.

Under the Indian Sale of Goods Act, 1930, an unpaid seller is a seller to whom the whole of the price has not been paid or tendered. The rights and duties of an unpaid seller are outlined in Sections 45 to 54 of the Act.

Rights of an Unpaid Seller

  1. Right of Lien (Section 47): The unpaid seller has the right to retain possession of the goods until payment is made.

  2. Right of Stoppage in Transit (Section 50): If the buyer becomes insolvent, the unpaid seller can stop the goods in transit and regain possession.

  3. Right of Resale (Section 54): The unpaid seller has the right to resell the goods under certain conditions, such as when the goods are perishable or when the seller has given notice to the buyer of their intention to resell.

  4. Right to Sue for Price (Section 55): The unpaid seller can sue the buyer for the price of the goods if the property in the goods has passed to the buyer.

Duties of an Unpaid Seller

  1. Duty to Deliver Goods: The unpaid seller must deliver the goods as per the contract terms unless they exercise their right of lien or stoppage in transit.

  2. Duty to Inform Buyer: If the seller exercises the right of stoppage in transit, they must inform the buyer about it.

  3. Duty to Account for Proceeds of Resale: If the unpaid seller resells the goods, they must account for any profit made from the resale to the original buyer.

Case Laws Illustrating Rights and Duties of an Unpaid Seller

  1. M/S. Jute and Gunny Brokers Ltd. v. Union of India (1961): This case highlighted the right of lien and stoppage in transit. The court held that the unpaid seller could exercise these rights if the buyer became insolvent.

  2. Lily White v. R. Munuswami (1966): This case emphasized the right of resale. The court held that the unpaid seller could resell the goods if the buyer failed to pay within a reasonable time.

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