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Section 95: Sections 76 to 123 [Repealed by the Indian Sale of Goods Act, 1930]

Indian Contract Act • Official Statutory Text & Practice Guide

Statutory Regulation
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Act 1872
Section 94 All 266 Sections of Indian Contract Act Section 96

Legal Commentary & Landmark Judgments: Section 95

Historical Section 95 of the Indian Contract Act, 1872 codified the unpaid seller's possessory lien over goods sold where the price remained unpaid and no credit period had been granted, entitling the seller to retain physical custody until full payment or tender of the purchase price. Transposed into Section 47 of the Sale of Goods Act, 1930, this possessory remedy operates as an equitable statutory security arising by operation of law independent of express agreement.

  • Possessory Nexus and Unpaid Status: The right of lien was strictly contingent upon continuous actual or constructive possession by the unpaid seller; once physical possession was unconditionally transferred to the buyer or his authorized agent without reservation of disposal rights, the statutory lien was extinguished.
  • Indivisibility of Possessory Retention: The unpaid seller was legally entitled to retain the entire consignment of goods until the total aggregate contract price was tendered, even where partial payments or progressive instalments had been remitted, unless the contract specifically provided for severable delivery against apportioned payments.
  • Bifurcation of Title and Possessory Right: Recognized that ownership of specific goods could pass to the buyer under general contract principles while the seller lawfully retained possession under the statutory lien, demonstrating the fundamental distinction between proprietary ownership and possessory entitlement.
Key Landmark Precedents:
  • Imperial Banking Co. v. Atmaram Madhavji (1865) 2 Bom HCR 246: The Bombay High Court held that an unpaid seller's lien under mercantile law is strictly a possessory right which is lost the moment the seller parts with physical custody, disentitling him from claiming repossession under the guise of lien once unconditional delivery has been effected.
  • State of Gujarat v. Variety Emporium (1993) 1 SCC 547: The Supreme Court reiterated the settled commercial doctrine that a seller's possessory lien cannot be asserted after constructive attornment or unconditional delivery of title documents to the purchaser or his accredited carrier.
Courtroom Practice & Strategic Litigation Guidance:

When defending an unpaid seller against an action in conversion or detinue brought by a buyer claiming title, plead the statutory unpaid seller's lien under Section 47 of the Sale of Goods Act as an absolute lawful justification for withholding custody. Ensure that no commercial document issued by the seller constitutes an attornment or unconditional release of possessory control.

Section 94 All 266 Sections of Indian Contract Act Section 96