Parliament Enacts New Bills of Lading Act, Replacing 1856 Legislation

The Parliament of India has enacted The Bills of Lading Act, 2025, which received presidential assent on July 24, 2025. This new Act is an instrument designed to update and replace the erstwhile Indian Bills of Lading Act, 1856. The legislation addresses long-standing issues arising from mercantile custom, where the property in goods transferred to an endorsee of a bill of lading (a document issued by a carrier to acknowledge receipt of cargo for shipment), but the contractual rights associated with the bill often remained with the original shipper or owner. It also tackles the problem of bills of lading being issued for goods not yet laden on board a vessel. The Act stipulates that every consignee (the person to whom goods are to be delivered) named in a bill of lading and every endorsee (a person to whom a bill of lading is transferred by endorsement) of such a bill, to whom the property in the goods passes, shall have all rights of suit transferred to them and be subject to the same liabilities as if the contract was originally made with them. Furthermore, the Act establishes that a bill of lading in the hands of a consignee or endorsee for valuable consideration, representing goods as shipped, serves as conclusive evidence of such shipment against the master or other person who signed it, even if the goods were not actually shipped. However, the master or signer can exonerate themselves by proving the misrepresentation was due to the shipper's or holder's fraud, without their own default. This conclusive evidence provision does not apply if the holder had actual notice that the goods were not laden. The Act will come into force on a date to be appointed by the Central Government through a notification in the Official Gazette.

The legislative intent behind The Bills of Lading Act, 2025, is to modernize the legal framework governing bills of lading in India, aligning it with contemporary commercial practices and ensuring greater certainty in maritime trade. The previous legal position, largely governed by the 1856 Act, created a statutory gap where the transfer of property in goods did not automatically confer corresponding contractual rights and liabilities to the new holder of the bill of lading. This often led to complexities and disputes in commercial transactions involving the sale and transfer of goods in transit. The new Act aims to rectify this by ensuring that rights and liabilities pass seamlessly with the property in the goods, thereby protecting the interests of bona fide holders for value. The legislation provided: “Every consignee of goods named in a bill of lading and every endorsee of a bill of lading, to whom the property in the goods therein mentioned shall pass, upon or by reason of such consignment or endorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with such consignee or endorsee.” This core provision addresses the fundamental issue of aligning contractual standing with ownership. The Act also addresses the issue of fraudulent or erroneous issuance of bills of lading for goods not yet loaded, providing a mechanism to hold the master or signer accountable while also offering a defence in cases of fraud by others. Importantly, the Act explicitly repeals The Indian Bills of Lading Act, 1856, while including comprehensive savings clauses to ensure that previous operations, rights, privileges, obligations, liabilities, and ongoing proceedings under the repealed Act remain unaffected. It also clarifies that any reference to the repealed Act in other legislation will now be construed as a reference to the 2025 Act. The Central Government is empowered to issue directions for the effective implementation of the Act. The legislation, however, does not prejudice existing rights such as stoppage in transit (a seller's right to stop goods in transit if the buyer becomes insolvent) or the right to claim freight against the original shipper.

Keywords: Bills of Lading Act 2025, Indian Bills of Lading, maritime law, shipping, cargo, consignee rights, endorsee liabilities, Central Government, legislative update, commercial law Geo Tags: India District: Not Applicable