Exim matters: No substantial changes in new law on bills of lading

Last Monday, the Bills of Lading Act, 2025, that aims to replace the Indian Bills of Lading Act, 1856, was enacted. The new law will come into effect on a date to be notified by the government.

 

In substance, the new legislation changes nothing. The bill of lading, issued by the carriers to the shippers, will continue to be a receipt for goods, evidence of the contract of carriage and a document of title to the goods.  Upon endorsement of the bill of lading, the property and the rights under the contract of carriage will continue to pass on to the endorsee. The rights of the carriers for stoppage in transit or claims of freight will continue. In the hands of the endorsee or the consignee, the bill of lading will continue to be the conclusive evidence of shipment even where goods are not laden on board, except in the event of fraud.

 

So, why did the government decide to bring in new legislation? The aim is to simplify legal language, restructure complex provisions, enhance clarity, promote ease of understanding, and enable smoother enforcement in line with contemporary trade and legal standards, says the government. A closer scrutiny reveals nothing of the sort.

 

The 1856 law has a preamble and three sections. The new law uses the same wordings in its preamble and three sections. The three new sections relate to short title and commencement, power of the government to give directions and repeal and savings. They do nothing to change the essence of the 1856 law. It is unclear why the government wants powers to issue directions in respect of bills of lading.

 

The preamble of the 1856 law was contained in a single paragraph. That has now been split into 4 smaller parts. The section titled ‘rights under bill of lading to vest in consignee or endorsee’ is carried into the new legislation with the same title and words. The wordings in the section titled ‘right of stoppage in transit or claims for freight not to be affected’ have been merely split into three smaller parts. The section titled ‘bill of lading in hands of consignee etc. conclusive evidence of shipment against the master etc.’ uses the same words. Only some formatting has been done in the new legislation. The government’s claims that the 1856 law was colonial and outdated and that its repeal reflects our constitutional values are spurious.

 

The 1856 law remedied three flaws. Before its enactment, some rights under the bill of lading stayed with the shipper even after the property passed to the endorsee through endorsements in the bills of lading.  Secondly, the bills of lading in the hands of bonafide holders were being questioned by the carriers on the plea that goods were not laden on board.  Thirdly, the rights of the carriers for stoppages in transit and claims for freight were not explicit. Surprisingly, the preamble in the new law says that it remedies the same three flaws that were already remedied through the 1856 law. Obviously, whoever drafted the new legislation only did a copy-paste job without any application of mind. It is surprising that such a glaring defect in the preamble went through the hierarchy unnoticed by the senior government functionaries. It is a pathetic commentary on the law making process.

 

email : tncrajagopalan@gmail.com