1. Core Legal Answer & Context: This statement accurately describes the sequential nature and relationship between two crucial rights of an unpaid seller under the Sale of Goods Act: the right of lien and the right of stoppage in transit. Both rights are remedies available to an unpaid seller to secure payment for goods sold, but they operate at different stages of the goods' journey.

• Seller's Lien (Sections 47-49, Sale of Goods Act, 1930): The right of lien allows an unpaid seller to retain possession of the goods until the full price is paid. This right is available when the seller is in possession of the goods. The seller can exercise this right if the goods have been sold without any stipulation as to credit, or if they have been sold on credit but the term of credit has expired, or if the buyer becomes insolvent. The lien is a possessory right; once the seller parts with possession, the lien is generally lost.

• Right of Stoppage in Transit (Sections 50-52, Sale of Goods Act, 1930): This right arises when the seller has already parted with possession of the goods, and they are in the course of transit to the buyer, but the buyer has become insolvent. In such a scenario, the unpaid seller can resume possession of the goods, as long as they are still with a carrier or other bailee for the purpose of transmission to the buyer, and retain them until payment or tender of the price. The right of stoppage in transit is essentially an extension of the right of lien, allowing the seller to regain a possessory right over the goods even after dispatch.

The Relationship: The critical point is that the right of stoppage in transit commences precisely when the right of lien ends. When an unpaid seller delivers the goods to a carrier for transmission to the buyer, the seller's physical possession ceases, and consequently, the right of lien is lost (Section 49(1)(a)). At this very moment, if the buyer becomes insolvent, the right of stoppage in transit becomes available to the seller. This means that the seller cannot exercise both rights simultaneously over the same goods. If the goods are still with the seller, the lien applies. If they are with a carrier and the buyer is insolvent, stoppage in transit applies. Once the goods reach the buyer or their agent and the transit ends, both rights cease.

2. Relevant Statutes and Sections:

• Sale of Goods Act, 1930:
  • Section 47: Seller's lien.
  • Section 48: Part delivery.
  • Section 49: Termination of lien.
  • Section 50: Right of stoppage in transit.
  • Section 51: Duration of transit.
  • Section 52: How stoppage in transit is effected.

3. Important Landmark Cases:

• Great Indian Peninsular Railway Co. v. Hanmandas Ramkison (1889) ILR 14 Bom 57: This case illustrates the application of the right of stoppage in transit. It clarified that the transit continues as long as the goods are in the hands of the carrier as a carrier, and not as an agent for the buyer, and the seller can exercise the right during this period.
• Lickbarrow v. Mason (1787) 2 Term Rep 63: This classic English case, though predating the specific Sale of Goods Act, laid down the foundational principles of stoppage in transit, recognizing the unpaid seller's right to reclaim goods from a carrier upon the buyer's insolvency, provided the goods have not yet reached the buyer's actual possession.

4. Clear Conclusion: The right of stoppage in transit is a vital remedy for an unpaid seller, acting as a secondary line of defense after the right of lien is lost due to the dispatch of goods. Its commencement is directly linked to the termination of the lien, ensuring that the seller has a continuous, albeit evolving, mechanism to secure payment for goods, particularly when the buyer's financial stability becomes questionable during the transit period.