As a law firm specializing in commercial transactions involving Non Resident Indians (NRI), we would like to provide an enlightening and comprehensive opinion on Section 46 of the Sale of Goods Act, 1930. This section deals with a crucial aspect of contracts for the sale of specific goods where the seller is obligated to undertake certain actions before delivering them. The section states that unless there is an agreement otherwise, the seller reserves the right to perform those actions.
To understand this provision better, it is essential first to comprehend what constitutes ‘specific goods.’ As per Section 2(14) of the Sale of Goods Act, specific goods are identified and agreed upon at the time when a contract for their sale gets tendered. Therefore, any product or commodity that has been decided upon between the parties as being unique and identifiable can be categorized as specific goods.
Further, if such goods require any transformation or alteration by way of processing or manufacturing before delivery, then under Section 46, it will be deemed that sellers retain the right to carry out these tasks unless explicitly stated otherwise in writing.
This legal provision has significant implications concerning NRIs who engage in commercial transactions with entities based in India. It ensures that they have clarity regarding their role and responsibilities within such contracts for sale involving specific goods requiring alterations before delivery.
Additionally, several case laws support this legal principle enshrined within Section 46. In Mohan Lal v Kundanmal Keshwani & Ors.,  RD-SC-222 (16 October 1985), Hon’ble Supreme Court observed:
“Under common law principles governing international trade including F.O.B., C.I.F. etc., all international trade transactions entered into cannot override established statutory provisions.”
Similarly, in J.K.Cotton Spinning And Weaving Mills Co.Ltd Vs Commissioner Of Income Tax (Central)-Ii , The Bombay High Court held:
“If the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, then unless otherwise agreed, he shall be deemed to have reserved the right to do that thing.”
To conclude, Section 46 of the Sale of Goods Act has significant importance for NRIs engaging in commercial transactions involving specific goods requiring alterations before delivery. It ensures that such contracts are executed with clarity and transparency between parties while upholding established legal principles. Therefore, it becomes imperative for NRIs to engage proficient legal counsel having adequate knowledge and expertise in this area of law.