Prove the trigger before calculating storage
Under section 44 of the Sale of Goods Act, 1930, when a seller is ready and willing to deliver and requests collection, the buyer’s failure to take delivery within a reasonable time can make the buyer liable for resulting loss and a reasonable care and custody charge. The contract, conformity of the goods, tender conditions and communications matter. Check the applicable place and manner of delivery, whether the buyer must apply for delivery and whether payment and delivery are concurrent under the contract and sections 31, 32, 35 and 36. A missed internal dispatch target does not establish buyer default.
Read the applicable text: Sale of Goods Act, 1930, sections 26, 31–32, 35–36, 44, 54–56 and 63.
Separate the loss and custody working
Identify the costs and losses caused by the neglect or refusal. Section 26 also addresses risk where delivery is delayed through the fault of either party: the party at fault bears loss that would not have occurred but for the fault. Check the contract and keep any duties as bailee separate. Distinguish incremental warehouse or handling costs and other supported losses from baseline expenditure that would have occurred anyway. For a custody charge, retain dates, goods, occupied space and evidence of reasonableness. A charge can be analysed even when the goods are stored in-house, but an unsupported internal tariff is not conclusive.
Fix the periods and quantities
Use a timeline showing readiness, request and receipt, allowed collection time, buyer response, partial pickups and the end of custody. Under section 63, reasonable time is factual. Apply contract provisions and evidence rather than imposing a universal grace period. Use daily balances or another supported measure and do not keep charging for released units.
Check other remedies separately
The proviso to section 44 preserves seller rights if the buyer’s conduct amounts to repudiation. Section 56 separately addresses damages for wrongful non-acceptance; section 55 governs a suit for price on its own conditions. A custody claim does not establish a price debt or authority to resell. If the seller relies on the unpaid seller’s statutory right of resale, check section 54, including whether the goods are perishable, whether notice is required and whether the contract expressly reserves a resale right. Where remedies overlap, avoid counting the same expense or damage twice.
Six worked illustrations
All facts and amounts are fictional. Calculations illustrate the stated assumptions, not a predetermined legal outcome.
Illustrative example 1: Reasonable period supported by the facts
The parties’ records establish a collection deadline at the end of 6 June. The buyer collects before storage accrues on 13 June. Six days from 7 to 12 June at a supported ₹1,500 per day give ₹9,000 for review.
Illustrative example 2: Part collection reduces space
100 pallets stay for four chargeable days, then 40 remain for five more. At a supported ₹30 per pallet-day, 600 pallet-days give ₹18,000. Charging 100 for all nine days would produce ₹27,000.
Illustrative example 3: Baseline and incremental costs
Normal pre-deadline custody costs ₹12,000. Post-default incremental storage is ₹22,000 and necessary handling ₹5,000. On these facts the incremental total is ₹27,000; retain ₹12,000 in the baseline.
Illustrative example 4: One invoice, two labels
A loss schedule includes ₹16,000 storage and ₹7,000 distinct handling. The custody schedule also lists the same ₹16,000. Removing the overlap leaves ₹23,000, rather than ₹39,000, before reasonableness review.
Illustrative example 5: Two separate loss causes
A survey quantifies ₹50,000 in deterioration. ₹32,000 is supported as caused by non-collection; ₹18,000 is attributed to an independent defect. If reasonable custody adds ₹6,000 without overlap, the supported claim working is ₹38,000.
Illustrative example 6: Readiness fails for part of an order
An order comprises 60 conforming and 40 nonconforming units. Assume that the contract permits separate tender, the buyer must take the conforming portion separately and only those 60 units meet all section 44 conditions. At ₹20 per unit-day for five days, the relevant custody calculation is ₹6,000, not ₹10,000.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Read the collection obligation | Contract, amendments and delivery terms. |
| 2 | Identify the goods tendered | Serials, batch records and condition report. |
| 3 | Prove readiness and willingness | Release and loading evidence. |
| 4 | Prove request and its receipt | Buyer correspondence and timestamps. |
| 5 | Assess reasonable time | Agreed window and surrounding facts. |
| 6 | Record part collections and end dates | Gate passes and stock movements. |
| 7 | Measure reasonable custody charges | Area or quantity, rates and days. |
| 8 | Trace distinct loss and its cause | Survey and expense records. |
| 9 | Separate repudiation and other remedies | Legal review and overlap matrix. |
| 10 | Approve the net claim working | Evidence index and signed reconciliation. |
Sixteen practitioner FAQs
1. Is the buyer liable merely because goods were manufactured?
No. Section 44 requires readiness and willingness, a request and failure to take within reasonable time.
2. Is the invoice enough to show a collection request?
Check its terms and evidence that a clear request reached the buyer.
3. How many days are reasonable?
Section 63 makes this a question of fact.
4. What if the tendered goods are defective?
Examine contractual conformity and the basis for refusal before alleging default.
5. Does a warehouse invoice settle reasonableness?
It supports actual cost; test duration, rates and cause separately.
6. Can internal custody be documented?
Yes. Show actual space, handling, dates and a supported charge basis.
7. What if the buyer collects in stages?
Track each reduction in units or space.
8. Can all storage before the request be charged under section 44?
Do not assume it; the statutory trigger and contract matter.
9. What if the seller moved goods to a cheaper warehouse?
Record the actual cost and mitigation evidence.
10. Can loss and care charges both appear?
Yes where each is supported and does not duplicate the other.
11. Does section 44 guarantee full invoice recovery?
No. A price suit has separate conditions.
12. Does refusal always amount to repudiation?
No. Analyse the contract and conduct.
13. Does section 44 extinguish rights on repudiation?
Its proviso preserves the seller’s rights.
14. May the seller treat disputed loss as admitted debt?
Track the claim and its status separately from admitted amounts.
15. How should a resale be reflected?
Verify the basis for resale and any required notice under section 54, then account for the proceeds and any overlap with the damages calculation.
16. What makes the calculation reviewable?
A dated chronology tied to item movements and independently supported amounts.
Official sources
Sale of Goods Act, 1930, sections 26, 31–32, 35–36, 44, 54–56 and 63