WAREHOUSING (DEVELOPMENT AND REGULATION) ACT 2007 THE WAREHOUSING (DEVELOPMENT AND REGULATION) ACT, 2007 [Act No. 37 of 2007] [19th September, 2007] An Act to make provisions for the development and regulation of
warehouses, negotiability of warehouse receipts, establishment of a Warehousing
Development and Regulatory Authority and for matters connected therewith or
incidental thereto. BE it enacted by Parliament
in the Fifty-eighth Year of the Republic of India as follows:-- (1)
This Act may be called the Warehousing (Development and
Regulation) Act, 2007. (2)
It extends to the whole of India except the State of Jammu and Kashmir. (3)
It shall come into force on such date as the Central Government
may, by notification in the Official Gazette, appoint. In this Act, unless the
context otherwise requires,-- (a)
"accreditation agency" means an agency, whatever be its
constitution, registered with the Authority under section 5; (b)
"actionable claim" shall have the meaning assigned to it
in section 3 of the Transfer of
Property Act, 1882(4 of 1982); (c)
"Authority" means the Warehousing Development and Regulatory
Authority established under sub-section (1) of section 24; (d)
"depositor" means a person who delivers goods to the
warehouseman for storage; (e)
"endorsee" means the person to whom the warehouse
receipt is negotiated; (f)
"endorsement" means signing on the warehouse receipt by
the depositor or holder of the warehouse receipt for the purpose of its
negotiation; (g)
"electronic form", with reference to information, means
any information generated, sent, received or stored in media, magnetic,
optical, computer memory, microfilm, computer generated micro fiche or similar
device; (h)
"fungible goods" means any goods of which any unit is,
by nature or usage of trade, the equivalent of any other like unit and are
received by a warehouseman as fungible goods; (i)
"goods" means all tangible movable goods (other than
actionable claims, money and securities), whether fungible or not; (j)
"grade" means the quality standard of any goods as
notified as grade designation by the Central Government under the Agricultural
Produce (Grading and Marking) Act, 1937(1 of 1937) or any other law for the
time being in force; (k)
"holder" means,-- (i) in
relation to a negotiable warehouse receipt, a person who is in possession of
such receipt and a right to goods endorsed on it; and (ii) in
relation to a non-negotiable warehouse receipt, a person named in it as the
person to whom the goods are to be delivered or the assignee of that person; . (l)
"member" means a member of the Authority and includes
its Chairperson; (m)
"negotiable warehouse receipt" means a warehouse receipt
under which the goods represented therein are deliverable to the depositor or
order, the endorsement of which has the effect of transfer of goods represented
thereby and the endorsee for which takes a good title; (n)
"non-negotiable warehouse receipt" means a warehouse
receipt other than a negotiable warehouse receipt; (o)
"notification" means a notification published in the
Official Gazette; (p)
"person" includes a firm, co-operative society or any
association or body of persons, whether incorporated or not; (q)
"prescribed" means prescribed by rules made under this
Act; (r)
"regulation" means a regulation made under this Act; (s)
"warehouse" means any premises (including any protected
place) conforming to all the requirements including manpower specified by the
Authority by regulations wherein the warehouseman takes custody of the goods
deposited by the depositor and includes a place of storage of goods under
controlled conditions of temperature and humidity; (t)
"warehousing business" means the Business of maintaining
warehouses in storage of goods and issuing negotiable warehouse receipts; (u)
"warehouse receipt" means an acknowledgement in writing
or in electronic form issued by a warehouseman or his duly authorised
representative (including depository by whatever name called) of the receipt
for storage of goods not owned by the warehouseman; (v)
"warehouseman" means any person who is granted a
certificate of registration in respect of any warehouse or warehouses by the
Authority or an accreditation agency for carrying on the business of
warehousing. (1) No person
shall commence or carry on the warehousing business unless he has obtained a
registration certificate in respect of the concerned warehouse or warehouses
granted by the Authority under this Act: Provided that a person
carrying on the warehousing business immediately before the commencement of
this Act shall be allowed to carry on such business, in case he has made an
application for registration within thirty days from the date of such
commencement: Provided further that no
such registration shall be required for warehouses which do not propose to
issue negotiable warehouse receipt. Explanation.--For the
removal of doubts, it is hereby clarified that a warehouse registered under
this Act shall also be eligible to issue non-negotiable warehouse receipts. (2) Notwithstanding
anything contained in sub-section (1), the Authority may, subject to such
regulations and guidelines issued by it, authorise any person registered under
section 5 as an accreditation agency to issue certificate of accreditation to
any person for carrying on the business of warehousing issuing negotiable
warehouse receipts. (1)
Any person desirous of commencing or carrying on the business of
maintaining a warehouse issuing negotiable warehouse receipts may make an
application to the Authority for registration in respect of one or more
warehouses owned or occupied by him. (2)
Every application for registration under sub-section (1) shall be
in such form and manner and shall be accompanied by such fees as may be
prescribed. (3)
The Authority may, after such enquiry and subject to such terms
and conditions as it thinks fit, grant a certificate of registration of the
warehouse in the prescribed form and bearing a registration number to the
applicant authorising him to carry on the business of maintaining a warehouse
or warehouses and to issue negotiable warehouse receipts. (4)
The Authority may not grant a certificate of registration under
this section unless it is satisfied that the warehouse in respect of which the
application has been made has adequate facilities and safeguards required to
warehouse the goods of the nature specified in the application and the
applicant satisfies the financial, managerial and other eligibility criteria
and competence as may be prescribed: Provided that no
certificate of registration shall be refused to any applicant under this
section unless the applicant has been given an opportunity of being heard. (1)
The Authority shall, from time to time, determine the number of
accreditation agencies as it may authorise to issue certificate of
accreditation to warehouses issuing negotiable warehouse receipts. (2)
Any person fulfilling the qualifications and other requirements as
may be prescribed and desirous of functioning as an accreditation agency under
this Act may make an application to the Authority seeking its registration as
such under this Act. (3)
Every application under sub-section (2) shall be in such form and
manner and shall be accompanied by such fees and security deposit as may be
prescribed. (4)
The form in which and the terms and conditions subject to which a
certificate of registration as an accreditation agency may be issued under this
section shall be such as may be prescribed. (1)
A warehouseman is liable for loss of, or injury to, goods caused
by his failure to exercise such care and diligence in regard to the goods as a
careful and vigilant owner of the goods of the same bulk, quality and value
would exercise in the custody of them in similar conditions. (2)
In case the goods are damaged or lost in spite of taking all care
and precautions by the warehouseman due to unavoidable circumstances, the
compensation equal to the value of goods at the time of deposit of the goods
shall be payable by the warehouseman. (3)
In case the goods are damaged or lost due to the negligence of the
warehouseman, then, the compensation shall be equal to value of goods plus the
loss of profit to the holder of the receipt. (4)
The warehouseman shall not be responsible for any loss,
destruction, damage or deterioration of the goods delivered to him for storage
attributable to circumstances such as force majeure, act of war, act of public
enemies and the like. (1)
In the absence of a lawful excuse, a warehouseman shall deliver
the goods referred to in a negotiable receipt, to the holder of the receipt on
demand made by the holder and on the holder fulfilling all the following
conditions, namely:- (a)
satisfying the warehouse lien; (b)
surrendering the receipt in case of non-negotiable receipt and
surrendering ' the receipt with endorsements in case of negotiable receipt; and (c)
acknowledging in writing the receipt of the goods.- (2)
If a warehouseman refuses or fails to deliver the goods in
compliance with the provisions of this section, the burden of proof shall lie
on the warehouseman to establish the existence of a lawful excuse for the
refusal or failure. (1)
Every warehouseman shall keep in a place of safety a complete and
accurate set of records and accounts of all transactions pertaining to the
operation of a warehouse including records and accounts of all goods received
in the warehouse and withdrawn therefrom, of all unissued receipts in his
possession, of all receipts issued, returned to, or cancelled, by him. (2)
Subject to the provisions of sub-section (1), the warehouseman
shall keep all the records and accounts of the warehouse business in numerical
sequence separate and distinct from the records and accounts of any other
business in such form and in such manner and for such period as the Authority
may, by regulations, specify. (3)
The warehouseman shall make available to the Authority for inspection
the records and accounts of the warehouse business at any time as may be
desired by the Authority. (1)
If the goods are of a perishable or hazardous nature, or their keeping
shall deteriorate greatly in value or damage other property, the warehouseman
may give notice that is reasonable and possible under the circumstances to the
holder of the receipt for the goods, if the name and address of the holder is
known to the warehouseman or if not known to the warehouseman, then, to the
depositor, requiring that person to satisfy the lien on the goods and to remove
them from the warehouse. (2)
If the person to whom a notice under sub-section (1) is given,
fails to satisfy the lien and remove the goods within the time specified in the
notice, the warehouseman may sell the goods at public or private sale without
advertising. (3)
The notice referred to in sub-section (1) may be given by sending
it by electronic mail, speed post or registered post or telegraphically
addressed to the person to whom it is to be given at the last known address of
the person and the notice is deemed to be given on the third day of the
mailing. (4)
If the warehouseman after a reasonable effort is unable to sell the
goods, the warehouseman may dispose of them in such other manner as he deems
proper and shall incur no liability for that reason. (5)
From the proceeds of any sale or disposal of goods made under this
section, the warehouseman shall, after satisfying his lien, hold the balance in
trust for the holder of the receipt. (6)
No notice shall be necessary if the warehouseman is satisfied on
reasonable grounds that in the circumstances of the case giving such notices is
likely to cause further prejudice to the goods. (7)
If, at any time, the warehouseman is satisfied that the quality of
any fungible goods or any part thereof has so deteriorated or is so
deteriorating that it is necessary to do so, to protect the holders of
negotiable warehouse receipts from loss and time is not sufficient for him to
seek their instructions, he may, subject to the regulations in this behalf,
dispose off the goods or any part thereof and keep the sale proceeds after
satisfying his lien in an escrow account for the benefit of the holders of receipts. (8)
In case of disposal of fungible goods under sub-section (7), the
warehouseman shall, at the choice of the holder of the receipt, either pay the
sale proceeds or deliver equivalent goods of the same grade, quality and
quantity to him. ' (9)
Any endorsee shall have the right to intimate the address for
service recorded with the warehouseman. (1)
Every warehouseman has a lien on goods deposited with him for
storage, whether deposited by the owner of the goods or by his authority, or by
any person entrusted with the possession of the goods by the owner or by his
agent. (2)
The lien of the warehouseman is for the amount of the storage and
maintenance charges including ? (a)
all lawful charges for storage and preservation of the goods; (b)
all reasonable charges for? (i)
any notice required to be given under the provisions of this Act; (ii)
notice and advertisement of sale; (iii)
sale of goods where default is made in satisfying the lien of the
warehouseman; and (iv)
compliance of statutory provisions. (3) In case
of any endorsement on the face of a negotiable warehouse receipt, by a bank or
the warehouseman, such endorsement shall be evidence of a pledge and the
pledgee shall have priority over the interest of the holder of the receipt. (4) In case
of any pledge referred to in sub-section (3), the warehouseman shall not
deliver the goods unless the endorsement of the pledge has been duly got
cancelled. (5) In case
the goods are not taken back within the declared period of storage, the
warehouseman shall have the right to recover his charges, selling the goods by
public auction, or in any other manner provided in this section any goods upon
which he has a lien. (6) The
warehouseman shall give a notice in writing of his intention to sell the goods
to the person liable as debtor for the charges for which the lien exists or to
the owner or person owning the right of property of the goods. (7)
The notice under sub-section (5) shall? (a)
contain all the details about the goods, the location of
warehouse, date of deposit, the name of depositor and a statement of lien
claimed by the warehouseman for the goods stored in the warehouse; and (b)
state that unless the charges are paid within the stipulated time
mentioned in the notice, the goods shall be advertised for sale and sold by
public auction at a time and place as specified in the notice. (8)
If the charges are not paid on or before the day mentioned in the
notice, then, unless any other mode of sale is specified by the Authority, by
regulations, an advertisement of the sale shall be published in a leading
newspaper having circulation in the locality where, the sale is to be held as
well as where the owner of the goods is located and the sale shall be held not
less than fourteen days from the date of first publication of the
advertisement. (9)
The warehouseman shall, from the proceeds of the sale, satisfy his
lien and shall pay over the surplus, if any, to the person entitled thereto. (10)
If the surplus is not demanded by the person entitled thereto
within ten days after the sale of goods or if there are different claims, the
warehouseman shall seek instructions from the Authority and act as per the
orders of the Authority. (1)
A warehouse receipt, which may be either in writing or in
electronic form, shall be a document of title to goods in writing if it
contains all the following particulars, namely:- (a)
receipt number; (b)
warehouse registration number and date up to which it is valid; (c)
name of the warehouse and its complete postal address; (d)
name and address of the person by whom or on whose behalf the
goods are deposited; (e)
date of issue of the warehouse receipt; (f)
statement that the goods received shall be delivered to the holder
thereof, or that the goods shall be delivered to the order of a named person; (g)
rates of storage charges and handling charges; (h)
description of the goods or of the packages containing them with
particulars of quantity and quality or grade; (i)
market value of the goods at the time of deposit; (j)
private marks of depositor on the goods or packages, if any,
except in the case of fungible goods; (k)
name of the insurance company indemnifying for fire, flood, theft,
burglary, misappropriation, riots, strikes or terrorism; (l)
whether the warehouse receipt is negotiable or non-negotiable; (m)
statement of the amount of any advance made and of any liability
incurred for which the warehouseman claims his lien; (n)
date and signature of the warehouseman or his authorised agent; (o)
declared shelf-life of goods; (p)
the fact that the warehouseman holds the lien on the goods
deposited for his storage and handling charges; and (q)
that the receipt would be valid only till the date of expiry of
declared shelf-life of the goods for which it is issued. (2) In case a
warehouseman willfully omits from a negotiable warehouse receipt any of the
particulars set out in sub-section (1), he shall be liable for damages caused
by such omission. (3) No
warehouse receipt shall, by reason of the omission only of any of the
particulars set-forth in sub-section (1), be deemed to be invalid for the
purpose of settlement of disputes or claims. (4)
Authority may, with the prior approval of the Central Government,
add, delete or modify any particulars as specified in sub-clause (1) for all or
any commodity or class of commodities or for any class of warehouses. (1)
The words in a negotiable warehouse receipt limiting its
negotiability shall be void. (2)
A warehouseman who issues a non-negotiable warehouse receipt shall
cause to be plainly marked upon its face the words "non-negotiable"
or "not negotiable" in English or in the language in which it is
issued. (3)
In case of non-compliance of sub-section (2), a holder of the
warehouse receipt who purchases it for valuable consideration believing it to
be a negotiable warehouse receipt may, at his option, treat the receipt as
vesting in him all rights attaching to a negotiable warehouse receipt and
imposing upon the warehouseman the same liabilities which he would have
incurred had the receipt been a negotiable warehouse receipt and the
warehouseman shall be liable accordingly. (4)
A negotiable warehouse receipt shall be valid for delivery till
the date of expiry of the declared shelf-life of the goods for which it is
issued. A negotiable warehouse
receipt may be negotiated by its delivery if, by the terms of the receipt, the
warehouseman undertakes to deliver the goods to the order of a named person,
and that person or a subsequent endorsee has endorsed it. Where a negotiable receipt
is transferred for valuable consideration by delivery, and the endorsement of
the transferor is essential for negotiation, the transferee acquires a right
against the transferor to compel him to endorse the receipt, unless a contrary
intention appears, and the negotiation takes effect as of the time when
endorsement is made. A person who, for valuable
consideration, negotiates a negotiable warehouse receipt by endorsement and
delivery, including one who assigns for valuable consideration, a claim secured
by a receipt, unless a contrary intention appears, warrants the following:-- (a)
that the receipt is genuine; (b)
that the person has a legal right to negotiate or transfer it; (c)
that the person has no knowledge of any fact that would impair the
validity of the receipt; (d)
that the person has a right to transfer the title to the goods;
and (e)
that the goods are merchantable or fit for a particular purpose
when those warranties would have been implied, if the contract of the parties
had been to transfer without a receipt the goods represented by it. The endorsement of a
receipt does not make the endorser liable for any failure on the part of the
warehouseman or previous endorsers of the receipt to fulfill their respective
obligations. The validity of the
negotiation of a receipt is not impaired by the fact that-- (a)
the negotiation was a breach of duty on the part of the person
making the negotiation; or (b)
the owner of the receipt was induced by fraud, mistake or duress
to entrust the possession or custody of the receipt to that person, if the
person to whom the receipt
was negotiated or a person to whom the receipt was subsequently negotiated,
paid value for it without knowing of the breach of duty, fraud, mistake or
duress. If a person having sold,
mortgaged or pledged goods that are in the custody of a warehouseman and for
which a negotiable receipt has been issued, continues in possession of the
negotiable receipt, the subsequent negotiation of it by that person under any
sale or other disposition of the goods to any person receiving the receipt in
good faith, for valuable consideration and without notice of the previous sale,
mortgage or pledge, has the same effect as if a previous purchaser, mortgagee
or pledgee of the goods, as the case may be, had expressly authorised the
subsequent negotiation. When a negotiable warehouse
receipt has been issued in respect of any goods, the warehouseman shall not
deliver the goods to the depositor or endorsee, until the due charges are paid
to the custodian from the date of initial deposit till delivery is made and the
warehouse receipt is surrendered for cancellation. (1)
A non-negotiable warehouse receipt may be transferred by the
holder by delivery to a purchaser or donee of the goods in writing executed by
the holder. (2)
A person to whom the goods covered by a non-negotiable warehouse
receipt is transferred acquires? (a)
the title of the transferor to the goods; and (b)
the right to deposit with the warehouseman the receipt or
duplicate thereof or to give notice in writing to the warehouseman of the
transfer. (3)
The transferee shall acquire the benefit of the obligation of the warehouseman
to hold goods in storage for him according to the terms of the receipt upon
deposit of the transfer of the, goods and on giving notice in writing of the
transfer and upon the warehouseman having a reasonable opportunity of verifying
the transfer. In the hands of a holder
who has purchased a negotiable warehouse receipt for valuable consideration, it
shall be conclusive evidence of the goods described in it as against the
warehouseman or any person claiming through him. In a dispute between an
endorser of a negotiable warehouse receipt and his endorsee unless it is proved
otherwise, it shall be presumed that-- (a)
the endorsement has been made voluntarily; (b)
the endorsement has been made for full consideration; (c)
the endorser had full legal title in the goods represented by the
receipt; and (d)
the endorsement has extinguished all the rights, title and
interest of the endorser in the goods. (1)
No warehouseman shall issue a warehouse receipt without actually
receiving the goods of the quantity, quality or grade and other particulars as
may be mentioned in the receipt. (2)
No warehouseman shall issue more than one receipt for the same
goods deposited by any person: Provided that in case of a
loss or destruction, a duplicate receipt may be issued in such manner as may be
specified by the Authority by regulations. (3) If a
warehouseman fails to comply with the provisions of sub-section (2), he would
be liable for all such damages caused by the failure to any person who has
transacted on such receipt for valuable consideration, believing it to be an
original, even though the transaction is after the delivery of the goods by the
warehouseman to the holder of the original receipt. (4)
A receipt on the face of which the word "duplicate" is
plainly marked is a representation and warranty by the warehouseman that it is
an accurate copy of a receipt properly issued and uncancelled on the date of
issue of the duplicate warehouse receipt. (1)
With effect from such date as the Central Government may, by
notification, specify in this behalf, there shall be constituted an authority
to be called the Warehousing Development and Regulatory Authority to exercise
the powers conferred on, and to perform the functions assigned to it by or
under this Act. (2)
The Authority shall be a body corporate by the name aforesaid
having perpetual succession and a common seal with power, subject to the provisions
of this Act, to acquire, hold and dispose of property, both movable and
immovable, and to contract and shall, by the said name, sue or be sued. (3)
The head office of the Authority shall be at New Delhi and the
Authority may, with the previous approval of the Central Government, establish
offices at other places in India. The Authority shall consist
of-- (a)
a Chairperson; and (b)
not more than two other members, to be appointed by the Central Government from amongst persons of
ability, integrity and standing who have wide knowledge and experience in
inventory management, insurance, preservation, quality control, agriculture
banking, finance, economics, law or administration. (1) The
Chairperson and every other member shall hold office for a term not exceeding
five years from the date on which he enters upon his office and shall be
eligible for reappointment: Provided that no person
shall hold office as the Chairperson or other member after he has attained the
age of sixty-five years. (2)
Notwithstanding anything contained in sub-section (1), a member
may? (a)
relinquish his office by giving in writing to the Central
Government notice of not less than three months; or (b)
be removed from his office in accordance with the provisions of
section 27. (1)
The Central Government may remove from office any member who? (a)
is, or at any time has been, adjudged as an insolvent; or (b)
has become physically or mentally incapable of acting as a member;
or (c)
has been convicted of an offence which, in the opinion of the
Central Government, involves moral turpitude; or (d)
has acquired such financial or other interest as is likely to
affect prejudicially his functions as a member; or (e)
has so abused his position as to render his continuation in office
detrimental to the public interest. (2)
No such member shall be removed under clause (d) or clause (e) of
sub-section (1) unless he has been given a reasonable opportunity of being
heard in the matter. Subject to the rules as may
be made in this behalf, the salaries and allowances payable to, and other terms
and conditions of service of-- (a)
the Chairperson shall be the same as that of a Secretary to the
Government of India; (b)
the other members of the Authority shall be the same as that of
Joint Secretaries to the Government of India. The Chairperson and the
other members shall not, for a period of two years from the date on which they
cease to hold office as such, except with the previous approval of the Central
Government, accept any employment in any concern in the warehousing sector. The Chairperson shall be
the chief executive of the Authority. (1)
The Authority shall meet at such times and places and shall observe
such rules of procedure in regard to transaction of business at its meetings
(including the quorum at such meetings) as may be determined by regulations. (2)
The Chairperson, or if, for any reason he is unable to attend a
meeting of the Authority, any other member chosen by the members present from
amongst themselves at the meeting shall preside at the meeting. (3)
All questions which come up before any meeting of the Authority
shall be decided by a majority of votes by the members present and voting, and
in the event of an equality of votes, the Chairperson, or the person presiding
shall have a second or casting vote. No act or proceeding of the
Authority shall be invalid merely by reason of-- (a)
any vacancy in, or any defect in the constitution of, the
Authority; or (b)
any defect in the appointment of a person acting as a member of
the Authority; or (c)
any irregularity in the procedure of the Authority not affecting
the merits of the case. (1)
The Authority may appoint officers and such other employees as it
considers necessary for the efficient discharge of its function under this Act. (2)
The terms and conditions of service of officers and other
employees of the Authority appointed under sub-section (1) shall be governed by
regulations made under this Act. (1)
The Authority may, by notification, constitute a Committee to be
known as the Warehousing Advisory Committee to advise the Authority on matters
relating to the making of regulations under section 51 and make recommendations
for effective implementation of the provisions of this Act. (2)
The Warehousing Advisory Committee shall consist of not more than
fifteen members excluding the members of the Authority to represent the
interests of commerce, industry, engineering, agriculture, consumers,
organisations engaged in warehousing, quality control, preservation and
research bodies. (3)
Without prejudice to the provisions of sub-section (1), the
Warehousing Advisory Committee may advise the Authority on such other matters
as may be referred to it by the Authority. (1)
Subject to the provisions of this Act and any other law for the
time being in force, the Authority shall have the duty to regulate and ensure
implementation of the provisions of this Act and promote orderly growth of the warehousing
business. (2)
Without prejudice to the generality of the foregoing provisions,
the powers and functions of the Authority shall include the following, namely:
-- (a)
to issue to the applicants fulfilling the requirements for
warehousemen a certificate of registration in respect of warehouses, or renew,
modify, withdraw, suspend or cancel such registration; (b)
to regulate the registration and functioning of accreditation
agency, renew, modify, withdraw, suspend or cancel such registration, and
specify the code of conduct for officials of accreditation agencies for
accreditation of the warehouses; (c)
to specify the qualifications, code of conduct and practical
training for warehousemen and staff engaged in warehousing business; (d)
to regulate the process of pledge, creation of charges and
enforcement thereof in respect of goods deposited with the warehouse; (e)
to promote efficiency in conduct of warehouse business; (f)
to make regulations laying down the standards for approval of
certifying agencies for grading of goods; (g)
to promote professional organisations connected with the
warehousing business; (h)
to determine the rate of, and levy, the fees and other charges for
carrying out the provisions of this Act; (i)
to call for information from, undertaking inspection of, conducting
enquiries and investigations including audit of the warehouses, accreditation
agencies and other organisations connected with the warehousing business; (j)
to regulate the rates, advantages, terms and conditions that may
be offered by warehousemen in respect of warehousing business; (k)
to specify, by regulations, the form and manner in which books of
account shall be maintained and statement of accounts shall be rendered by
warehousemen; (l)
to maintain a panel of arbitrators and to nominate arbitrators
from such panel in disputes between warehouses and warehouse receipt holders; (m)
to regulate and develop electronic system of holding and transfer
of credit balances of fungible goods deposited in the warehouses; (n)
to determine the minimum percentage of space to be kept reserved
for storage of agricultural commodities in a registered warehouse; (o)
to specify the duties and responsibilities of the warehouseman; (p)
to exercise such other powers and perform such other functions as
may be prescribed. The Central Government may,
after due appropriation made by Parliament by law in this behalf, make to the
Authority grants of such sums of money as the Government may think fit for
being utilised for the purposes of this Act. (1)
There shall be constituted a fund to be called the Warehousing
Development and Regulatory Authority Fund and there shall be credited thereto? (a)
all Central Government grants, fees and charges received by the Authority; (b)
all sums received by the Authority from such other source as may
be decided upon by the Central Government; (c)
all sums realised by way of penalties under this Act. (2)
The fund shall be applied for meeting- (a)
the salaries, allowances and other remuneration of the members,
officers and other employees of the Authority; (b)
the other expenses of the Authority in connection with the
discharge of its functions and for the purposes of this Act, (1)
The Authority shall maintain proper accounts and other relevant
records and prepare an annual statement of accounts in such form and manner as
may be prescribed by the Central Government in consultation with the
Comptroller and Auditor-General of India. (2)
The accounts of the Authority shall be audited by the Comptroller
and Auditor-General of India at such intervals as may be specified by him and
any expenditure incurred in connection with such audit shall be payable by the
Authority to the Comptroller and Auditor-General. (3)
The Comptroller and Auditor-General of India and any other person
appointed by him in connection with the audit of the accounts of the Authority
shall have the same rights, privileges and authority in connection with such
audit as the Comptroller and Auditor-General generally has in connection with
the audit of the Government accounts and, in particular, shall have the right
to demand the production of books of account, connected vouchers and other
documents and papers and to inspect any of the offices of the Authority. (4)
The accounts of the Authority as certified by the Comptroller and
Auditor-General of India or any other person appointed by him in this behalf
together with the audit report thereon shall be forwarded annually to the
Central Government and that Government shall cause the same to be laid before
each House of Parliament. (1)
The Authority shall furnish to the Central Government at such time
and in such form and manner as may be prescribed, or as the Central Government
may direct to furnish such returns, statements and other particulars in regard
to any proposed or existing programme for the promotion and development of the
warehousing industry as the Central Government may, from time to time, require. (2)
Without prejudice to the provisions of sub-section (1), the
Authority shall, within nine months after the close of each financial year,
submit to the Central Government an Annual Report giving a true and full
account of its activities including the activities for promotion and
development of the warehousing business during the previous financial year. (3)
Copies of the reports received under sub-section (2) shall be
laid, as soon as may be after they are received, before each House of
Parliament. (1) Without
prejudice to the foregoing provisions of this Act, the Authority shall, in
exercise of its powers and performance of its functions under this Act, be
bound by such directions on questions of policy, other than those relating to
technical and administrative matters, as the Central Government may give in
writing to it from time to time: Provided that the Authority
shall, as far as practicable, be given an opportunity to express its views
before any direction is given under this sub-section. (2) The
decision of the Central Government, whether a question is one of policy or not,
shall be final. (1)
If, at any time, the Central Government is of the opinion? (a)
that, on account of circumstances beyond the control of the
Authority, it is unable to discharge the functions or perform the duties
imposed on it by or under the provisions of this Act; or (b)
that the Authority has persistently defaulted in complying with
any direction given by the Central Government under this Act or in the
discharge of the functions or performance of the duties imposed on it by or
under the provisions of this Act and as a result of such default the financial
position of the Authority or the administration of the Authority has suffered;
or (c)
that circumstances exist which render it necessary in the public
interest so to do, the Central Government may, by notification and for reasons
to be specified therein, supersede the Authority for such period not exceeding
six months, as may be specified in the notification and nominate a person to
look after the functions of the Authority: Provided that before
issuing any such notification, the Central Government shall give a reasonable
opportunity to the Authority to make representations against the proposed
supersession and shall consider the representation, if any, of the Authority. (2)
Upon the publication of a notification under sub-section (1) superseding
the authority,-- (a)
the Chairperson and other members shall, as from the date of
supersession, be deemed to have vacated their offices; (b)
all the powers, functions and duties which may, by or under the
provisions of this Act, be exercised or discharged by or on behalf of the
Authority shall, until the Authority is reconstituted under sub-section (3), be
exercised and discharged by the person nominated by the Central Government
under clause (c) of sub-section (1); (c)
all properties owned or controlled by the Authority shall, until
the Authority is reconstituted under sub-section (3) vest in the Central
Government. (3)
On or before the expiration of the period of supersession
specified in the notification issued under sub-section (1), the Central
Government shall reconstitute the Authority by a fresh appointment of its
Chairperson and other members and in such case any person who had vacated his
office under clause (a) of sub-section (2) shall not be deemed to be
disqualified for reappointment. (4)
The Central Government shall cause a copy of the notification
issued under subsection (1) and a full report of any action to be laid before
each House of Parliament at the earliest. (5)
Notwithstanding anything contained in any law or in any contract
or memorandum or articles of association, on the removal of a person, from
office under this section, that person shall not be entitled to claim any
compensation for the loss or termination of office. (1) Any
person aggrieved by an order of the Authority made under this Act, or any rules
or the regulations made thereunder may prefer an appeal to such person or
authority appointed by the Central Government (hereafter referred to as the
Appellate Authority) within sixty days from the date of such order; Provided that an appeal may
be admitted after the expiry of the said period of sixty days but not beyond a
total period of ninety days if the appellant satisfies the Appellate Authority
that he had sufficient cause for not preferring the appeal within the said
period. (2)
Every appeal made under this section shall be made in such form
and manner and shall be accompanied by a copy of the order appealed against and
by such fees as may be prescribed. (3)
The procedure for disposing of an appeal shall be such as may be
prescribed: Provided that before
disposing of an appeal, the appellant shall be given a reasonable opportunity
of being heard. (4) An appeal
filed before the Appellate Authority shall be heard and disposed of as
expeditiously as possible and endeavour shall be made to finally dispose of the
appeal within a period of ninety days from the date of its filing. (1)
Any warehouseman knowingly issuing a negotiable warehouse receipt
without taking the actual physical delivery of the goods in his warehouse or a
warehouseman or an agent or servant of the warehouseman who issues a warehouse
receipt without reasonably satisfying himself that the goods for which such
warehouse receipt is issued have actually been received or the number, weight
or grade of the goods corresponds to the number, weight or grade specified in
the warehouse receipt or the goods are under his actual control at the time of
issuing such warehouse receipt, commits an offence and shall be punishable with
imprisonment for a term which may extend to three years or with fine which may
extend to four times the value of the goods or with both. (2)
A warehouseman or an agent or servant of the warehouseman, who
knowingly issues a duplicate negotiable warehouse receipt without substantially
following the procedure for the issue of a duplicate warehouse receipt, commits
an offence and shall be punishable for such offence with imprisonment for a
term which may extend to three years, or with fine which may extend to one lakh
rupees, or with both. (3)
A warehouseman or an agent or servant of the warehouseman, who,
knowingly that the negotiable warehouse receipt in respect of such goods is
outstanding and is uncancelled, delivers the goods without obtaining possession
of such negotiable warehouse receipt at or before the time of such delivery and
thereby causes unlawful loss or gain to any person, commits an offence and
shall be punishable for such an offence by imprisonment for a term which may
extend to three years or with fine which may extend to one lakh rupees, or with
both. (4)
A warehouseman who fails, on surrender of a negotiable warehouse
receipt by the depositor or endorsee and payment of all his lawful charges and
cancellation of encumbrances endorsed on the receipt, within the declared
shelf-life of the goods, as mentioned therein to deliver the goods represented
by the receipt commits an offence and shall be punishable for such offence with
imprisonment for a term which may extend to three years or with fine which may
extend to three times the value of the goods or with both. (5)
Any depositor, who declared as the value of the goods delivered by
him for storage with a warehouseman an amount which he does not believe to be
the proper value, commits an offence and shall be punishable for such an
offence with fine which may extend to one lakh rupees. (1) Where an
offence under this Chapter is committed by a company, every person, who at the
time the offence was committed, was in charge of the company or was responsible
for making the deposit, as the case may be, shall be deemed to be guilty of the
offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing
contained in this sub-section shall render any such person liable to punishment
if he proves that the contravention took place without his knowledge or that he
exercised all due diligence to prevent such contravention. (2) Notwithstanding
anything contained in sub-section (1), where any offence under this Chapter has
been committed by a company and it is proved that such an offence has been
committed with the consent or connivance of any director, manager, secretary or
other officer of the company, such director, manager, secretary or other
officer shall also be deemed to be guilty of the offence and shall be liable to
be proceeded against and punished accordingly. Explanation.-- For the
purposes of this section,-- (a)
"company" means any body corporate and includes a firm
or other association of individuals; and (b)
"director", in relation to a firm, means a partner in
the firm. (1)
No court shall take cognizance of any offence punishable under
this Act, save on a complaint made by the Authority or by any officer
authorised in writing in this behalf by the authority. (2)
No court inferior to that of a Metropolitan Magistrate or a
Judicial Magistrate of the first class shall try any offence punishable under
this Act. The Chairperson, members,
officers and other employees of Authority and Appellate Authority shall be
deemed, when acting or purporting to act in pursuance of any of the provisions
of this Act, to be public servants within the meaning of section 21 of the Indian Penal
Code(45 of 1960). No suit, prosecution or
other legal proceeding shall lie against the Central Government or any officer
of the Central Government or any member, officer or other employee of the
Authority for anything which is in good faith done or intended to be done under
this Act or the rules or regulations made thereunder: Provided that nothing in
this Act shall exempt any person any suit or other proceedings which might,
apart from this Act, be brought against him. The Authority may, by
general or special order in writing, delegate to the Chairperson or any other
member or officer of the Authority subject to such conditions, if any, as may
be specified in the order, such of its powers and functions (excluding the
power to make regulations under section 51) under this Act as it may deem
necessary. Notwithstanding anything
contained in the Wealth-tax Act, 1957(27 of 1957), the Income-tax Act, 1961(43
of 1961) or any other enactment for the time being in force relating to tax on
wealth, income, profits or gains, the Authority shall not be liable to pay
wealth-tax, income-tax or any other tax in respect of their wealth, income,
profits or gains derived. (1)
The Central Government may, by notification, make rules for
carrying out the provisions of this Act. (2)
In particular, and without prejudice to the generality of the
foregoing power, such rules may provide for all or any of the following
matters, namely:-- (a)
the form and manner in which an application for obtaining a
certificate of registration for commencing or carrying on the business of
warehousing issuing negotiable warehouse receipts may be made and the fees
which shall accompany such application under sub-section (2) of section 4; (b)
the form in which a certificate for registration of warehouses may
be issued under sub-section (3) of section 4; (c)
The financial, managerial and other eligibility criteria and
competence which an applicant for registration of warehouses shall satisfy
under sub-section (4) of section 4; (d)
The qualification and other requirements which a person applying
for functioning as an accreditation agency shall fulfill under sub-section (2)
of section 5; (e)
the form and manner in which an application for registration as an
accreditation agency may be made and the fees which shall accompany such
application under subsection (3) of section 5; (f)
the form of certificate of registration of accreditation agency
under sub-section (4) of section 5; (g)
the salary and allowances payable to, and the other terms and
conditions of service of the Chairperson and other members under section 28; (h)
such other powers that may be exercised by the Authority under
clause (p) of sub-section (2) of section 35; (i)
the form and manner of maintenance of annual statement of accounts
to be maintained by the Authority under sub-section (1) of section 38; (j)
the form and manner in which and the time within which returns and
statements and particulars are to be furnished by the Authority to the Central
Government under sub-section (1) of section 39; (k)
the form and the manner in which an appeal may be made to the
Appellate Authority and the fee which shall accompany such appeal under
sub-section (2) of section 42; (l)
the procedure to be followed by the Appellate Authority in
disposing of an appeal under sub-section (3) of section 42; (m)
any other matter which is required to be, or may be, prescribed,
or in respect of which provision is to be or may be made by rules. (1)
The Authority may, with the previous approval of the Central
Government, and in consultation with the Warehousing Advisory Committee, by
notification, make regulations consistent with this Act and the rules made
thereunder to carry out the provisions of this Act. (2)
In particular, and without prejudice to the generality of the
foregoing power, such regulations may provide for all or any of the following
matters, namely:-- (a)
the matters regulating the authorities of accreditation agencies
under subsection (2) of section 3; (b)
the form and manner and the period for which a warehouseman shall
keep the records and accounts of the warehousing business under sub-section (2)
of section 8; (c)
the manner of disposal of goods or any part thereof and the
keeping of sale proceeds in an escrow account by the warehouseman under
sub-section (7) of section 9; (d)
the mode of sale under sub-section (10) of section 10; (e)
the manner of issuance of duplicate warehouse receipt under the
proviso to sub-section (2) of section 23; (f)
the time and places of meetings of the Authority and the procedure
to be followed at such meetings including the quorum necessary for the
transaction of business under sub-section (1) of section 31; (g)
the terms and conditions of service of officers and other
employees of the Authority under sub-section (2) of section 33; (h)
the registration and functioning of accreditation agencies,
renewal, modification, withdrawal, suspension or cancellation of such
registration and the code of conduct for officials of accreditation agencies
for accreditation of the warehouses under clause (b) of sub-section (2) of
section 35; (i)
the standards for approval of certifying agencies for grading of
goods under clause (f) of sub-section (2) of section 35; the rate of fees and other
charges to be levied for carrying out the provisions of this Act under clause
(h) of sub-section (2) of section 35; (j) any other
matter which is required to be, or may be, specified by regulations or in
respect of which provision is to be or may be made by regulations. Every rule made by the
Central Government and every regulation made by the Authority under this Act
shall be laid, as soon as may be after it is made, before each House of
Parliament, while it is in session, for a total period of thirty days which may
be comprised in one session or in two or more successive sessions, and if,
before the expiry of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in making any modification in
the rule or regulation or both Houses agree that the rule or regulation should
not be made, the rule or regulation shall thereafter have effect only in such
modified form or be of no effect, as the case may be; so, however, that any
such modification or annulment shall be without prejudice to the validity of
anything previously done under that rule or regulation. The provisions of this Act
shall have effect notwithstanding anything inconsistent therewith contained in
any other law for time being in force or in any instrument having effect by
virtue of any law other than this Act. (1) If any
difficulty arises in giving effect to the provisions of this Act, the Central
Government may, by order, published in the Official Gazette, make such provisions
not inconsistent with the provisions of this Act as appear to it to be
necessary for removing the difficulty: Provided that no such order
shall be made under this section after the expiry of three years from the date
of commencement of this Act. (2) Every order
made under this section shall, as soon as may be after it is made, be laid
before each House of Parliament. After section 8B of the
Stamp Act, 1899, the following section shall be inserted, namely:--- "8C.
?Negotiable warehouse receipts not liable
to stamp duty-Notwithstanding anything contained in this Act, negotiable
warehouse receipts shall not be liable to stamp duty.". Statement of Objects and Reasons - Warehousing (Development and Regulation)
Act, 2007 STATEMENT OF OBJECTS AND REASONS 1.
At present, the warehousing receipts issued by the warehouses in
the country do not enjoy the fiduciary trust of depositors and banks as there
is a fear that it is not possible to recover the loans in case of fraud,
mis-management, etc., by the warehousemen or insolvency of the depositor. The
available legal remedies are also time consuming and inadequate. Further, the
format of warehouse receipts issued by the various warehouses in the country is
not uniform. Hence, there are considerable impediments in the negotiability of
warehouse receipts creating difficulties to the farmers and other depositors of
goods. Having regard to the above, it is proposed to establish a negotiable
warehouse receipt system for all commodities including agricultural
commodities. On the one hand, it will make warehouse receipts a prime tool of
trade and facilitate finance against it throughout the country, on the other,
it will allow banks to improve the quality of their lending portfolio and
enhance their interest in lending in respect of goods deposited in warehouses.
It is, therefore, proposed to lay down the requirements for warehouse receipts
to become valid negotiable instruments. 2.
It is expected that the system of negotiable warehouse receipts
would result in providing considerable benefits, both at the macro as well as
micro levels and increase the liquidity in the rural areas, encourage
scientific warehousing of goods, lower cost of financing, improve supply
chains, enhance rewards for grading and quality and better price risk
management. This would, in turn, result in higher returns to farmers and better
services to consumers. It is also proposed to provide necessary administrative
mechanism and legislative backup for regulating and streamlining the
warehousing sector issuing negotiable warehouse receipts. 3.
The proposed legislation, inter alia, seeks to provide for- (i)
the regulation of warehousing business by registering warehouses
issuing negotiable warehouse receipts; (ii)
the registration of accreditation agencies for warehouses which
would issue accreditation certificates to the warehouses following certain
required norms; (iii)
the liabilities, duties and lien of warehousemen; (iv)
the contents of negotiable warehouse receipts; (v)
the conditions for negotiability of warehouse receipts by delivery
and endorsement; (vi)
the transfer of negotiable warehouse receipts without endorsement
and warranties on sale of warehouse receipts; (vii)
the issue of duplicate receipts in case of loss or destruction; (viii)
the establishment and incorporation of an Authority to be called
the Warehousing Development and Regulatory Authority to regulate and ensure
implementation of the provisions of the proposed legislation and to promote
orderly growth of the warehouse business in the country; (ix)
the empowerment of the Central Government to issue directions on
questions of policy to the Authority and to supersede the Authority in certain
circumstances; (x)
the appeal to the appellate authority; and (xi)
defining the offences and penalties in respect of such offences. 4.
The Notes on clauses explain in detail the various provisions
contained in the Bill. 5.
The Bill seeks to achieve the above objects.
Preamble 1 - WAREHOUSING (DEVELOPMENT AND REGULATION) ACT, 2007PREAMBLE