Unpaid seller's lienCentral

Section 47 of The Sale of Goods Act, 1930

(1)Subject to the provisions of this Act, the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases, namely:—
1. (a)where the goods have been sold without any stipulation as to credit;
2. (b)where the goods have been sold on credit, but the term of credit has expired;
3. (c)where the buyer becomes insolvent.
(2)The seller may exercise his right of lien notwithstanding that he is in possession of the goods as agent or bailee for the buyer.

Summary

Allows a seller who has not been paid to keep the goods if they are still in the seller's hands.
Applies when the goods were sold without any agreement for credit.
Applies when goods were sold on credit but the time for that credit has run out.
Applies immediately if the buyer becomes insolvent, which means they can no longer pay their debts.
Works even if the seller is currently holding the goods as an agent or a bailee, which is someone looking after another person's property.

Practical examples

1Anil sells a laptop to Kavita for 50,000 rupees without any credit deal. Kavita does not bring the money, so Anil refuses to let her take the laptop home.

2Bharat sells 100 bags of cement to a builder on a 15 day credit term. On the 16th day, the builder has not paid, so Bharat keeps the cement in his warehouse.

3A shopkeeper is holding a custom dress for a customer as a favor after the sale. The shopkeeper learns the customer has gone bankrupt, so he keeps the dress until he is paid.

FAQ

1. Can a seller keep goods if they are acting as a bailee under Section 47 of the Sale of Goods Act?

Yes, Section 47 of the Sale of Goods Act, 1930, specifically states that the seller can exercise the right to keep the goods even if they are in possession of them as an agent or bailee for the buyer.

2. When does the right to keep goods start for credit sales under Section 47 of the Sale of Goods Act?

According to Section 47 of the Sale of Goods Act, 1930, the right to keep the goods for a credit sale begins once the term of credit has expired.

3. What happens if a buyer cannot pay their debts under Section 47 of the Sale of Goods Act?

If the buyer becomes insolvent, Section 47 of the Sale of Goods Act, 1930, allows the unpaid seller to keep the goods until they receive payment.

Test yourself

Q1.Under Section 47 of The Sale of Goods Act, 1930, in which situation is an unpaid seller entitled to keep possession of the goods?

Q2.Does a seller lose the right to keep goods under Section 47 of The Sale of Goods Act, 1930, if they are holding the goods for the buyer as an agent?

Q3.According to Section 47 of The Sale of Goods Act, 1930, what is the rule for goods sold on credit?

Q4.Under Section 47 of The Sale of Goods Act, 1930, when must the seller give up the goods?

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