7/04/2020 see I know todays date.

BGS Class

Pledge
Bailment of goods as security for payment of a debt or
performance of a promise.

2 Parties:
1. Pledgee/ Pawnee (Bailee)

2. Pledger/ Pawnor (Bailor)

Essentials elements required for a pledge:

1. Bailment of goods pledged

any sort of goods, documents, shares can be pledged.

2. Bailment by way of security

delivery of goods by the pledger to the pledgee

according to the pledge.

3. Security for payment of debt

collateral value should be more than the amount given to
the loan taking guy

Rights of the pawnor and pawnee: (in both perspectives)

1. Right to retain goods (section 173)

pawnee has the right to retain the pledged good till its
time to return.
pawnor and pawnee can keep changing their status
based on the give and take situation.

2. Right to retain subsequent advances (section 174)

3. Right to extraordinary expenses (section 175)

expenses incurred to the bank in taking care of the
collateral, it will take it from me by adding the amount to
the loan.

4. Right against true owner (section 178A)

if the owner defaults… the bank has the right against the
goods owned by me… to utilize those… the bank becomes
the owner and can further pledge.

5, right to receive back the goods

If I have fulfilled the loan, I have the right to receive the
goods which I have submitted as collateral

6, right to redemption of debt

if you finish the loan well before the stipulated time, you
can ask for your goods back.

7, right to maintenance and preservation of goods

If Im getting loan from a bank, the bank is responsible for
maintaining and preserving the collateral security. If I
default I can no longer question the bank on this right.

8, rights of ordinary debtor

Whatever rights the ordinary debtor has, the same ones
pawnor and pawnee have.

Karvy case study.