Lien of warehouseman on goods

Section 10 of the Warehousing (Development and Regulation) Act, 2007 deals with lien of warehouseman on goods. 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. The Act came into force on 25 Oct 2010.

(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 (6) 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.

Section 10, The Warehousing (Development and Regulation) Act, 2007 (Act 37 of 2007).