A agrees to sell certain goods to B on a certain date on 10 days credit. The period of 10 days expired and goods were still in the possession of A.…

Lien is the right of a person to retain possession of the goods belonging to another until claim of the person in possession is satisfied. The unpaid seller has also right of lien over the goods for the price of the goods sold. Section 47 (1) of the Sale of Goods Act,1930 provides that the unpaid seller who is in the possession of the goods is entitled to exercise right of lien in the following cases: 1. Where the goods have been sold without any stipulation as to credit 2. Where the goods have been sold on credit but the term of credit has expired 3. Where the buyer has become insolvent even though the period of credit has not yet expired. In the given case, A has agreed to sell certain goods to B on a credit of10 days. The period of10 days has expired. B has neither paid the price of goods nor taken the possession of the goods. That means the goods are still physically in the possession of A, the seller. In the meantime, B, the buyer has become insolvent. In this case, A is entitled to exercise the right of lien on the goods because the buyer has become insolvent and the term of credit has expired without any payment of price by the buyer.