Prove the collection trigger before valuing the claim
Section 44 of the Sale of Goods Act, 1930 addresses a seller who is ready and willing to deliver, requests the buyer to take delivery, and the buyer fails to do so within a reasonable time. When those conditions are met, the buyer is liable for loss caused by the neglect or refusal and a reasonable charge for care and custody. A finished-goods posting alone proves neither a request nor unreasonable delay.
Read the applicable text: India Code Sale of Goods Act, 1930, sections 26, 31, 35–36, 44, 54–56 and 63.
Document readiness and the collection request
Start with the agreed place, pickup terms and obligations on each party. Under sections 31 and 35–36, check the contract and the applicable delivery rules, including section 35: absent an express contract to the contrary, the seller need not deliver until the buyer applies for delivery. An application by the buyer is distinct from the seller’s request under section 44. For section 44 retain quality release, packaging, goods availability and a request identifying when and where collection can occur. Preserve timestamps and replies. Under section 63 reasonable time is a question of fact, so record the nature of the goods, collection constraints and relevant communications.
Keep the loss and custody calculations separate
Build a lot-level log of time in storage, cause of delay, steps taken to limit loss, third-party invoices and support for reasonable charges. Separate the seller's existing costs and any overlapping claims. Record incremental loss with evidence of causation and supporting credits or recoveries; the arithmetic is not a rule that every invoice, daily charge or opportunity cost is recoverable.
Check whether the seller actually could deliver
If goods remained incomplete or the seller refused access, analyse the affected period independently. Where a buyer had valid grounds to object to tender, assess those grounds and the contract before alleging neglect. For a multi-lot shipment identify which lots were available, accepted, disputed or never requested. Do not allocate the full warehouse bill to one buyer without support.
Do not confuse retention with rescission or resale
The proviso to section 44 preserves the seller's rights where neglect or refusal amounts to repudiation. Sections 55 and 56 separately address suit for price and damages for non-acceptance. Title, resale under section 54 and other unpaid-seller remedies require separate analysis. Under the first proviso to section 26, fault in delaying delivery puts the goods at the defaulting party’s risk only for loss that would not have occurred but for that fault. Duties as bailee are preserved. Check any applicable insolvency constraint separately. Avoid using section 44 as a universal permission to dispose of the goods or claim the price and the same loss twice.
Six worked illustrations
All facts and amounts are fictional. Calculations illustrate the stated assumptions, not a predetermined legal outcome.
Illustrative example 1: Time and space allocation
Eight pallets remain for five supported chargeable days at an evidenced illustrative ₹120 per pallet per day. The custody calculation is ₹4,800; establish its reasonableness and the statutory trigger independently.
Illustrative example 2: Only released units qualify for the working
A buyer has 60 ordered crates. Forty were ready and properly tendered, and 20 still awaited quality clearance. Assume a request to collect the released crates and that the buyer failed to collect them within a reasonable time. At an illustrative ₹30 per crate for four supported days, the eligible population gives a working of ₹4,800, before legal review.
Illustrative example 3: Different storage periods by lot
Six pallets remain for nine supported days and four pallets for three, at ₹100 per pallet per day. The two supported lines are ₹5,400 and ₹1,200, totaling ₹6,600.
Illustrative example 4: Avoid a duplicate warehouse line
The draft claim combines ₹17,000 of invoices and ₹4,000 of the same forklift charges embedded in those invoices. Remove the duplicate: the supported pool is ₹17,000, not ₹21,000.
Illustrative example 5: Separate loss from custody
Assume proven incremental deterioration of ₹35,000 after relevant recoveries and a separate reasonable custody amount of ₹8,500 with no overlap. The working totals ₹43,500, subject to the entitlement analysis.
Illustrative example 6: Payment on account
A documented ₹26,000 claim has a ₹7,500 payment allocated to it. The remaining balance is ₹18,500; keep the sale-price account separate.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Retrieve pickup terms | Signed contract and delivery instructions |
| 2 | Identify ready lots | Release, packing and stock records |
| 3 | Confirm access at the delivery point | Warehouse availability and logistics record |
| 4 | Evidence the request | Timestamped communication and receipt |
| 5 | Assess the reasonable interval | Product and transport facts and responses |
| 6 | Mark exceptions and partial pickups | Delivery log, objections and release dates |
| 7 | Measure custody reasonably | Rate support and lot-day calculation |
| 8 | Trace incremental loss | Invoice, mitigation and recovery records |
| 9 | Review overlapping remedies | Price, damages and custody reconciliation |
| 10 | Close and preserve the chronology | Approved claim ledger and supporting records |
Sixteen practitioner FAQs
1. Does failure to collect automatically create a charge?
First prove readiness, request and failure within a reasonable time.
2. Can a purchase order prove the buyer was asked to collect?
Check the actual notice and terms; the order alone may not show a specific request.
3. Is there a universal grace period?
No. Reasonable time is a question of fact under section 63.
4. What if the goods were not ready?
A readiness gap undermines the trigger for the affected goods or period.
5. Should the seller count from production completion?
Use the request and a supported reasonable interval, not completion alone.
6. Can goods at different locations be combined?
Keep records by location and contractual delivery point.
7. What if only some lots were ready?
Assess those lots individually and exclude unsupported quantities.
8. Does a statutory custody charge require a daily contract tariff?
Section 44 speaks of a reasonable charge; evidence the basis and assess the contract.
9. Can outsourced storage be passed through automatically?
Assess reasonableness, causation and any allocation to other customers.
10. Can internal labour be included?
Document the nature, supported cost and absence of overlap; avoid unsupported markups.
11. Is potential loss of a future customer sufficient?
A claim needs evidence of actual recoverable loss and causation.
12. Should insurance recoveries be ignored?
Record recoveries and assess their impact and any rights separately.
13. Does the provision make a resale automatically valid?
No. Examine the separate resale and title conditions.
14. Can the seller claim the price instead?
Consider section 55 and its facts separately from section 44.
15. What if the refusal amounts to repudiation?
The proviso preserves other rights; obtain a contract-specific remedy analysis.
16. Does a ledger debit establish recoverability?
No. Preserve the evidence and separately assess recognition and recoverability.
Official sources
India Code Sale of Goods Act, 1930, sections 26, 31, 35–36, 44, 54–56 and 63