'Depository is to indemnify loss caused to the beneficial owner due to the negligence of the depository or the depository participant'. Critically examine.

As per section 16 of the Depositories Act, 1996, any loss caused to the beneficial owner due to the negligence of the depository or the participant, would be indemnified by the depository to such beneficial owner. Where the loss due to the negligence of the participant is indemnified by the depository, the depository has the right to recover the same from such participant.