By S&S Co. Advocates & Solicitors · Published 14 May 2026 · Informational content, not legal advice
About this article: A general explainer prepared by S&S Co. Advocates & Solicitors on a recurring type of dispute. It does not report a specific judgment or order, names no parties and gives no case citation, so it should not be cited as authority. Law and practice change; please verify against the current statute and primary sources before relying on it.
The Warehousing (Development and Regulation) Act, 2007 provides for registration of warehouses with the Warehousing Development and Regulatory Authority (WDRA) and for negotiable warehouse receipts (NWRs), which can be pledged to a financier to raise credit against stored commodities without physically moving the goods. The scheme depends on the warehouse keeping accurate stock records and issuing one valid receipt for each lot. Since 2017, receipts have also been issued electronically through WDRA-registered repositories.
If a warehouse issues a second receipt for a lot that is already covered by one, the financiers each holding a receipt may find that the stock is insufficient to satisfy both. The warehouse operator is generally answerable to the holder of a valid receipt for the shortfall, apart from any liability of the borrower, and the authority can act against the warehouse's registration.
Recovery from the warehouse may be difficult if it has few assets, so lenders look at the borrower and the collateral as well. Rights as between competing holders depend on the facts, including which pledge was valid and first in time, and on the terms of the receipt and the Act.