The Warehousing (Development and Regulation) Act, 2007, was enacted to address the need for a structured and regulated warehousing system in India. Prior to this legislation, the warehousing sector lacked uniformity, leading to inefficiencies, lack of trust in warehouse receipts, and limited access to credit for farmers and traders. The Act was introduced to modernize the warehousing infrastructure, promote negotiability of warehouse receipts, and establish a regulatory framework to oversee the sector. It came into force on October 25, 2010, and marked a significant step in integrating agricultural and commodity markets with the financial system by enabling warehouse receipts to be used as collateral for loans.
The Act was influenced by global best practices and aimed to mitigate risks associated with storage, such as loss of goods, fraud, and mismanagement. It also sought to align with India's economic reforms, particularly in agriculture, by facilitating better price realization for farmers and reducing post-harvest losses. The establishment of the Warehousing Development and Regulatory Authority (WDRA) under the Act further institutionalized the governance of warehouses, ensuring compliance with standards and fostering transparency.
Grants immunity to officials acting in good faith and delegates powers to the WDRA for effective implementation.
The Act overrides conflicting laws and includes a provision to resolve operational difficulties.
Amendments to the Stamp Act, 1899, exempt negotiable warehouse receipts from stamp duty, promoting their use.
Defines negotiable and non-negotiable warehouse receipts, with strict requirements for their issuance.
Negotiable receipts can be transferred, facilitating trade and credit.
Provisions address warranties, endorsements, and the rights of holders, ensuring legal clarity and protection against fraud.
Penalties are prescribed for issuing receipts without proper documentation or delivery of goods.