Expert Committee Submits its Report on Determining Methodology for Fixing National Minimum Wage, Ministry of Labour and Employment Click here

Warehouse Receipts

From Arthapedia
Jump to: navigation, search

Warehouse Receipts are documents issued by warehouses to depositors against the commodities deposited in the warehouses, for which the warehouse is the bailee.

Warehouse Receipt is a proof of storage. It is an acknowledgement of the goods held by the warehouse keeper on behalf of the person named therein.  It is a document issued by a warehouse keeper stating that he holds the goods mentioned in the receipt and is awaiting instructions from the person to whom it is addressed. It is a mere deposit receipt. Banker can accept it as a security to grant loans.

In India, the term, warehouse receipt, is defined in Section 2(u) of the Warehousing (Development and Regulation) Act, 2007 (WDR Act), which came into force from 25 October 2010.

Section 2(u) of the WDR Act defines a ‘warehouse receipt’ to mean “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”.

Warehouse Receipts may be either non-negotiable or negotiable (means transferable by simple endorsement /signature). Negotiable warehouse receipts are transferred by endorsement and delivery; i.e, either the original depositor or the holder in due course[1] (transferee) can claim the commodities from the warehouse.

WDR Act provides for issuance of   Negotiable Warehouse Receipts (NWRs)   by the warehouses registered under this Act. NWRs can be traded, sold, swapped and used as collateral to support borrowing.

1. Holder in due course means any person who possesses the negotiable instrument (NI) in good faith for valuable consideration before the maturity period so that he is eligible to enjoy the benefits of that financial instrument (FI). Good faith implies that he should not have accepted the NI after knowing about the defects in the title to the instrument. If the transferee had noticed the defects in the title of his immediate transferor he will not become a holder in due course. However, notice of defects in the title of any prior party does not affect the title of the holder. Also, consideration [legally valid amount] must not be void or illegal. For eg. debts due on wagering [gambling or bet] contracts cannot have this legal validity.  Holders of instruments given as gifts are not holders in due course.

Also See

Contributed by

Personal tools
Share Tools