Sale of Goods Act Section 49 — Termination of lien

CHAPTER V RIGHTS OF UNPAID SELLER AGAINST THE GOODS — Unpaid seller’s lien

Commercial / Corporate

Summary

Sub-section (1) explains the situations in which an unpaid seller loses their right to hold onto the goods until payment (their lien). This happens in three specific cases.

Under clause (a) of sub-section (1), the seller loses the lien when they hand over the goods to a carrier or another person for the purpose of sending them to the buyer, and the seller does not keep any right to control or reclaim the goods during transit.

Under clause (b) of sub-section (1), the seller loses the lien when the buyer, or someone acting on the buyer's behalf, lawfully takes possession of the goods.

Under clause (c) of sub-section (1), the seller loses the lien if they voluntarily give up that right, which is known as waiver.

Sub-section (2) states that an unpaid seller who still has a lien on the goods does not lose that lien merely because they have obtained a court order (a decree) for the price of the goods. The lien remains intact even after such a decree is granted.

Official Text

(1) The unpaid seller of goods loses his lien thereon—

(a) when he delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without reserving the right of disposal of the goods;

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

(c) by waiver thereof.

(2) The unpaid seller of goods, having a lien thereon, does not lose his lien by reason only that he has obtained a decree for the price of the goods.