Sale of Goods Act Section 46 — Unpaid seller’s sights
CHAPTER V RIGHTS OF UNPAID SELLER AGAINST THE GOODS
Commercial / Corporate
Summary
Sub-section (1) states that, as long as this Act and any other current law do not say otherwise, even if ownership of the goods has already transferred to the buyer, an unpaid seller automatically has certain rights by law. These rights apply while the seller remains unpaid.
Under clause (a) of sub-section (1), the unpaid seller has a lien on the goods for the price, meaning the seller can keep possession of the goods until the buyer pays, as long as the seller still has them.
Under clause (b) of sub-section (1), if the buyer becomes insolvent, the seller has the right to stop the goods while they are in transit, even after the seller has already handed over possession of the goods to a carrier.
Under clause (c) of sub-section (1), the seller has a right to resell the goods, but only to the extent allowed by this Act.
Sub-section (2) covers the situation where ownership of the goods has not yet passed to the buyer. In that case, the unpaid seller has an additional right to withhold delivery of the goods, and this right is similar in scope to the rights of lien and stoppage in transit that apply when ownership has passed to the buyer.
Official Text
(1) Subject to the provisions of this Act and of any law for the time being in force, notwithstanding that the property in the goods may have passed to the buyer, the unpaid seller of goods, as such, has by implication of law—
(a) a lien on the goods for the price while he is in possession of them;
(b) in case of the insolvency of the buyer a right of stopping the goods in transit after he has parted with the possession of them;
(c) a right of re-sale as limited by this Act.
(2) Where the property in goods has not passed to the buyer, the unpaid seller has, in addition to his other remedies, a right of withholding delivery similar to and co-extensive with his rights of lien and stoppage in transit where the property has passed to the buyer.