Section 35(1) in The Warehousing (Development and Regulation) Registration of Warehouses Rules, 2017
(1)If the Authority determines that a warehouseman is not likely to make adequate efforts or has communicated his inability to preserve the quantity and quality of goods against which negotiable warehouse receipts have been issued by either relinquishing custody or control of deposited goods, or in any other manner, and such act or omission is likely to cause loss to the quantity and quality of goods against which negotiable warehouse receipts have been issued, the Authority may, for the purpose of preserving the quantity and quality of such goods, immediately take control of and manage, or take control of and liquidate the goods, as it may deem fit.
