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PTC India Financial Services Limited Vs VenkateswaSC202216052210144135COM574704
PTC India Financial Services Limited Vs VenkateswaSC202216052210144135COM574704
JUDGMENT
Sanjiv Khanna, J.
1. The primary legal issue which arises for consideration in this appeal is whether the
Depositories Act, 1996 read with the Regulation 58 of the Securities and Exchange
Board of India (Depositories and Participants) Regulations, 19961 has the legal effect of
overwriting the provisions relating to the contracts of pledge under the Indian Contract
Act, 18722 and the common law as applicable in India. To facilitate analysis, this
judgment has been divided into Sections as follows:
A. Factual background of the case
B. Relevant provisions of the Contract Act
C. Analysis of case laws under the Contract Act:
(i) What is pledge and the legal difference between ownership, pledge
and mortgage
(ii) Pawnee has a special and not general right in the pledged property
(iii) Accretion on pawned goods
(iv) Notice of sale by pawnor and his right to sale
(v) Sale of the pledged goods by the pawnee to self
D. Effect and Purpose of the Depositories Act, 1996 and the Securities and
Exchange Board of India (Depositories and Participants) Regulation 1996
E. Effect of the Depositories Act, 1996 and the Securities and Exchange Board
of India (Depositories and Participants) Regulation, 1996 on the pledge under
the Contract Act, 1872
F. Four decisions
G. Analysis of facts and application of law of pledge to the facts of this case
H. Conclusion
A. Factual background of the case
2.1. The Appellant - PTC India Financial Services Limited,3 is an existing company
under the Companies Act, 2013. It is a wholly-owned subsidiary of PTC India Limited,
which in 1999 was promoted by four public sector undertakings, namely, NTPC Limited,
Power Finance Corporation Limited, NHPC Limited, andPower Grid Corporation of India
Limited. PIFSL is registered with the Reserve Bank of India4 as a Non-Banking Finance