Section 12 in The Warehousing (Development and Regulation) Act, 2007
Title: Negotiability of warehouse receipts.
(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.
Title: Negotiation of warehouse receipt by delivery
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.
Title: Transfer of negotiable warehouse receipts without endorsement
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.
Title: Warranties on negotiation of warehouse receipts
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.
Title: Non-liability of the endorser
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 fulfil their respective obligations.