PLEDGE

BY MEHUL VITHANI

WHAT IS PLEDGE????
A pledge is a bailment that conveys possessory title to
property owned by a debtor (the pledgor) to a creditor
(the pledgee) to secure repayment for some debt or
obligation and to the mutual benefit of both parties. The
term is also used to denote the property which constitutes
the security. A pledge is type of security interest.
According to sec 172, contract act, 1872, the bailment of
goods for repayment of a debt or performance of a
promise is called pledge.

WHAT IS PAWNOR AND PAWNEE??

The bailor in this case is called the pawnor, the
bailee is called the pawnee.
The person delivering the goods is called the
bailor, the person to whom they are delivered is
called the bailee and the transaction is called the
bailment.

ESSENTIAL FEATURES OF A VALID

PLEDGE

Delivery
Delivery
Delivery
Delivery

of possession
should be upon a contract
should be for purpose of security
should be upon condition to return

DUTIES
Duties of a pawnor
Duty to repay the loan
Duty to repay expenses in case of default
Duties of a pawnee
Duty not of pledged goods
Duty to return the goods

RIGHTS OF PAWNOR

Right to get back goods

Right to redeem debt
Preservation and maintenance of the goods
Right of an ordinary debtor

RIGHT OF PAWNEE

Right to retainer
Right to retain for subsequent advances
Right to extraordinary expenses
Right against true owner, when the pawnors title
is defective
Pawnees right where pawnor makes default