Kalka Prasad Ram Charan v. Harish Chandra
AIR 1957 All 25
(Section 54(2) of Sale of Goods Act, Right of an unpaid seller, Right to lien)
Harish (H) entered into a contract for sale of 67 thans of silk with Kalka Prasad (K) (a partnership firm). 10 thans were delivered immediately. Delivery of the remaining, were not accepted by K. H sold off the remaining thans and then notified the K about the sale. But due to a government control order the sale fetched a price considerably less than what had been agreed between the two. H brought a claim to recover the damages after deducting the price from the sale.
Trial Court: There was a contract. Case awarded to H without considering the question whether notice of the intended sale was given to K.
- Breach of contract, as delivery of the 57 thans not accepted and no payment made.
- Two notices had been sent to K, one stating that if they did not accept the 57 thans they would have to pay damages and second stating that the 57 thans had already been sold.
- S.54 (2) of SOGA not applicable as a seller’s exercise of the right of lien begins when a demand for delivery is made from him by the buyer and is followed by a refusal by him. But since this did not happen so it was not an exercise of lien, as per section 47 of SOGA.
- Buyer (K) falsely denied the formation of contract, so cannot claim relief under section 54(2).
- Completely denied the existence of any such contract.
- Claimed they were agents for H for the sale of the silk.
- Since, no notice of the sale had been given to K therefore he was not liable to pay any damages. (section 54 (2) of SOGA)
- No notice was sent to K. H’s own munim contradicted him in his deposition, claiming that only an oral statement was made, further H was unable to produce any secondary statement proving his statement.
- If lien would arise only when demand for the said goods is made then the interpretation of section 47 would be very narrow. H had sold the thans in exercise of lien as per S.47 and that S.54 (2) would be applicable. The mere fact that K made a false claim about not entering into a contract is not sufficient to take the case out of the purview of section 54(2). Therefore seller cannot claim any damages from buyer.
- As 67 thans were determined by both parties, the goods were ascertained and were in a deliverable state. Under Section 20, Sale of Goods Act the property in the goods passed to the buyer as soon as the contract was made, so the seller was merely a bailee.
- H should have sued under S.55, claiming the full amount, but now the court cannot award him damages as that would give Harish a decree for an amount larger than what he had claimed. No damages can be claimed for the 57 thans. For the remaining 10 thans, K is liable to pay with interest.
 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:—(a) where the goods have been sold without any stipulation as to credit;(b) where the goods have been sold on credit, but the term of credit has expired;(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.
 Where the goods are of a perishable nature, or where the unpaid seller who has exercised his right of lien or stoppage in transit gives notice to the buyer of his intention to re–sell, the unpaid seller may, if the buyer does not within a reasonable time pay or tender the price, re–sell the goods within a reasonable time and recover from the original buyer damages for any loss occasioned by his breach of contract, but the buyer shall not be entitled to any profit which may occur on the resale.If such notice is not given, the unpaid seller shall not be entitled to recover such damages and the buyer shall be entitled to the profit, if any, on the resale.
 Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment of the price or the time of delivery of the goods, or both, is postponed.
 (1) Where under a contract of sale the property in the goods for has passed to the buyer and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may sue him for the price of the goods.
(2) Where under a contract of sale the price is payable on a day certain irrespective of delivery and the buyer wrongfully neglects or refuses to pay such price, the seller may sue him for the price although the property in the goods has not passed and the goods have not been appropriated to the contract.