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Section 106: Sections 76 to 123 [Repealed by the Indian Sale of Goods Act, 1930]

Indian Contract Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1872
Section 105 All 266 Sections of Indian Contract Act Section 107

Legal Commentary & Landmark Judgments: Section 106

Historical Section 106 of the Indian Contract Act, 1872 governed the validity of title conveyed to a second buyer upon an unpaid seller's resale, as well as sales executed by one of several joint owners having sole possession with the consent of co-owners. Codified in Sections 28 and 54(3) of the Sale of Goods Act, 1930, this section protects the commercial integrity of resale markets and market confidence.

  • Absolute Title of Buyer on Resale: Where an unpaid seller exercises his statutory right of resale, the second purchaser acquires an indefeasible title as against the original defaulting buyer, even if no notice of resale was served on the original buyer.
  • Sale by Joint Owner in Possession: Where one of several joint owners has sole possession of goods with the permission of the other co-owners, property passes to any person who buys them from such joint owner in good faith and without notice of lack of authority.
  • Statutory Exception to Nemo Dat: Operates as an express legislative exception to the principle of nemo dat quod non habet, protecting the commercial velocity of transactions.
Key Landmark Precedents:
  • Ward v. Bignall [1967] 1 QB 534: Authoritative ruling on the effect of resale, holding that an unpaid seller's resale transfers proprietary title completely to the new purchaser, discharging the original buyer's property rights over the goods.
  • State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd. AIR 1958 SC 560: The Constitution Bench analyzed the fundamental nature of sale of goods, transfer of title, and statutory exceptions under the Sale of Goods Act derived from Chapter VII of the Contract Act.
Courtroom Practice & Strategic Litigation Guidance:

When defending a purchaser who bought goods from an unpaid seller at a secondary sale, invoke Section 54(3) of the Sale of Goods Act to defeat any replevin or detinue suit brought by the original buyer. The new purchaser's title is protected by statute regardless of internal disputes between the original contracting parties.

Section 105 All 266 Sections of Indian Contract Act Section 107