An unpaid invoice is the start of the inquiry
Section 55(1) of the Sale of Goods Act, 1930 allows a seller to sue for the price where property passed and the buyer wrongfully neglects or refuses to pay under the contract. Section 55(2) allows a price claim where payment is due on a certain day irrespective of delivery and the buyer wrongfully fails to pay, even though property has not passed and the goods have not been appropriated. An invoice entry does not by itself establish either route.
Read the applicable text: India Code: Sale of Goods Act, 1930, sections 18–25, 32 and 55–61.
Establish the contractual trigger
For the first route read the title and appropriation terms, including any reservation of the right of disposal, alongside shipping and acceptance evidence. For the second identify the clause making the price payable on a day certain independently of delivery. A date printed on an invoice is different from evidence of a binding independent obligation. Under section 32, delivery and payment are normally concurrent unless the parties agree otherwise. An ascertainable payment date tied to delivery is different from a day certain independent of delivery. Consider whether any delivery, acceptance, quality or other contractual condition affects when payment is due.
Reconcile the amount against the evidence
Prepare the claim by contract and shipment rather than copying the receivables total. Match payments, agreed credits and any supported changes to the relevant line. Keep contested credits and possible interest separate from undisputed principal. Treat the statement as a computation, not proof of liability.
Keep other remedies separate
Section 56 addresses damages where the buyer wrongfully neglects or refuses to accept and pay. It is not the same as a claim for the contractual price under section 55. Assess whether another remedy is available if neither price route is established. Document the contract, forum, limitation and any recoveries before pursuing a claim. For goods sold and delivered, Articles 14 and 15 of the Limitation Act generally allow three years from delivery if no fixed credit period was agreed, or from expiry of agreed fixed credit. For a claim involving undelivered goods, identify the applicable Schedule entry and accrual date separately. Do not count the same recovery twice.
Six worked illustrations
All facts and amounts are fictional. Calculations illustrate the stated assumptions, not a predetermined legal outcome.
Illustrative example 1: Title passed, partial payment
Title to goods priced at ₹18 lakh has passed to the buyer and the payment date has passed. With ₹7 lakh paid and an agreed ₹1 lakh credit, the candidate price balance is ₹10 lakh, subject to wrongful non-payment.
Illustrative example 2: Date certain independent of delivery
A contract makes ₹12 lakh payable on 30 September irrespective of delivery. On the assumed facts ₹4 lakh was paid and ₹8 lakh was wrongfully withheld. The second route can be tested even though title has not passed.
Illustrative example 3: A date conditional on delivery
A ₹10 lakh order is payable 15 days after delivery. The seller prints a date of 30 June on the invoice, but there has been no delivery and title has not passed. The ledger may show ₹10 lakh, but payment is not yet due on these facts and the printed date does not establish a section 55 price claim.
Illustrative example 4: Two lots with different title status
The ₹8 lakh price for Lot A is due and title has passed; the ₹5 lakh price for Lot B does not qualify on the title route because title has not passed. A ₹2 lakh payment is allocated to A. With no independent fixed-day route for B, the first-route candidate is ₹6 lakh, not the aggregate ₹11 lakh.
Illustrative example 5: Separate disputed credit
The original price is ₹15 lakh; ₹5 lakh paid and ₹1 lakh agreed credit leave ₹9 lakh. The buyer asserts a further ₹2 lakh credit. If established, the balance becomes ₹7 lakh; track both outcomes.
Illustrative example 6: Do not count the same receipt twice
A ₹20 lakh price balance precedes a ₹3 lakh receipt, which is shown once by the bank and again by the brokered collection report. Remaining price is ₹17 lakh. Deducting both entries would wrongly show ₹14 lakh.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Collect the operative contract and amendments | Signed agreement and order history |
| 2 | Identify the goods and shipment lots | Item and dispatch register |
| 3 | Find the title-passing event | Contract and appropriation evidence |
| 4 | Check whether payment is independently due on a certain day | Specific payment clause |
| 5 | Test whether non-payment is wrongful | Due date, correspondence and disputed conditions |
| 6 | Reconcile price, payments and accepted credits | Invoice and bank-level bridge |
| 7 | Separate balances by legal route | Lot-by-lot section 55 working |
| 8 | Identify disputed offsets and other remedies | Exceptions and remedy memorandum |
| 9 | Check time limits and forum before action | Applicable process review |
| 10 | Keep a dated evidence pack for the claim | Reconciled statement and supporting documents |
Sixteen practitioner FAQs
1. Can an invoice prove title passed?
It supports the transaction, but title depends on the contract and applicable facts.
2. Must the buyer physically hold the goods under section 55(1)?
The statutory question is whether property passed; delivery evidence may help establish it.
3. What if the contract reserves title until payment?
Review the reservation and whether the separate route under section 55(2) applies.
4. Is a due date on the invoice always a certain day irrespective of delivery?
Establish what the contract actually makes payable independently of delivery.
5. Can the price be claimed before the contractual due date?
Section 55 requires wrongful neglect or refusal to pay. Check when the obligation is due.
6. Is a complaint about quality automatically a defence?
Review its merits and effect on payment. If a breach of warranty is established, section 59 allows the buyer to raise it to reduce or extinguish the price, or to sue for damages; assess any further loss separately.
7. How should partial payments be attributed?
For several distinct debts, apply sections 59–61 of the Indian Contract Act, 1872: follow the buyer’s express or implied allocation if the payment is accepted. If no allocation is indicated, the seller may apply it to a lawful debt actually due and payable. If neither allocates, apply it by order of time, proportionately for debts of equal standing.
8. Can the receivables total be used across all lots?
Separate lots with different title, payment or remedy status.
9. Does section 56 award the invoiced amount?
It concerns damages for non-acceptance, which require a separate measure.
10. Can a seller claim both full price and the same loss again?
Reconcile remedies and recoveries to prevent duplication.
11. Can an agreed credit be ignored pending a system update?
Use the supported agreed amount in the claim reconciliation.
12. Should a disputed offset be treated as agreed?
Show it separately and quantify its effect if established.
13. Does an e-way bill settle whether title passed?
It can evidence movement; analyse the contract and title separately.
14. What if payment depends on acceptance certification?
Verify whether that condition is satisfied before asserting wrongful non-payment.
15. Should interest be merged with the original sale price?
Show interest separately with the basis, rate and start date. In the absence of a contrary contract, section 61(2)(a) lets the court award interest on the price at a rate it considers fit, from tender of the goods or from the date payment was due.
16. What makes the claim file reviewable?
Show the applicable route, supporting dates, documentary proof and reconciled principal.
Official sources
India Code: Sale of Goods Act, 1930, sections 18–25, 32 and 55–61 Indian Contract Act, 1872, sections 59–61 Limitation Act, 1963, Schedule Articles 14–15