PLEDGE:

RIGHTS AND DUTIES OF PAWNER AND PAWNEE:

BY-TANMOY HAZARIKA ROLL NO. 114

WHAT IS A PLEDGE?

THE BAILMENT OF GOODS AS SECURITY FOR PAYMENT OF A DEBT OR PERFORMANCE OF A PROMISE IS CALLED”PLEDGE”.

THE BAILOR IN THIS CASE IS CALLED THE PAWNER AND THE BAILEE IS CALLED THE PAWNEE.

PLEDGE IS THEREFORE A KIND OF BAILMENT.

DEFINITION:SEC35(1)”A CONTRACT BY WHICH A PERSON RECIEVES SOME PROPERTY FROM ANOTHER AS SECURITY FOR GRATING A LOAN OR AS GUARANTEE FOR PERFORMING A JOB”

BASIC FEATURES:

TWO PARTIES. PLEDGE CAN ONLY BE GIVEN BY THE

REAL OWNER OF THE PROPERTY. PLEDGE CAN BE GIVEN ON BOTH

MOVABLE AND IMMOVABLE TYPE OF PROPERTY.

IN CASE OF JOINT OWNERSHIP ONLY OWN PROPERTY CAN BE PLEDGED.

PROPERTY WHICH IS PLEDGED CAN NOT BE USED BY THE PAWNEE.

BASIC FEATURES:

RETURN THE PLEDGE PROPERTY. RETURN THE SURPLUS TO THE DEBTOR

AFTER AUCTION.

RIGHTS OF THE PAWNER:

RIGHT TO RECEIVE BACK THE GOODS PLEDGED FROM THE PAWNEE.

RIGHT TO RECEIVE ACCRETION TO THE GOODS PLEDGED.

RIGHT TO CLAIM COMPENSATION AGAINST THE PLEDGE FOR ANY LOSS HE SUFFERS DUE TO NEGLIGENTLY HANDLING,MIXTURE AND UNAUTHORIZED USE OF GOODS ETC.

RIGHTS TO RECEIVE A NOTICE FROM THE PAWNEE BEFORE SALE OR AUCTION OF THE GOODS PLEDGED.

CONT.

RIGHT TO SUE THE PAWNEE IN THE COURT TO RECOVER THE GOODS IN CASE SALE OR AUCTION TOOK PLACE WITHOUT NOTICE.

RIGHT TO HAVE SURPLUS OR EXCESS AMOUNT OBTAINED BY THE SALE OR AUCTION OF THE GOODS PLEDGED.

RIGHT TO REDEEM THE GOODS PLEDGED BEFORE SALE OR TRANSFER BY REPAYING THE DEBT,INTEREST,FINE AND OTHER EXPENSES.

DUTIES OF PAWNER:

PAWNER HAS THE DUTY TO DISCLOSE ALL THE DEFECTS IN THE GOODS TO BE PLEDGED.

PLEDGER HAS THE DUTY TO REPAY BACK HIS LOAN,INTEREST, EXPENSES IF ANY ,WITHIN OR AT THE SPECIFIED TIME.

PLEDGER HAS TO BEAR EXTRA ORDINARY EXPENSES FOR TAKING CARE OF THE GOODS PLEDGED OR HAS TO BEAR EXTRA ADDITIONAL LAIBILITIES DUE TO DEFAULT OF REPAYING LOAN.

NOT TO PLEDGE THE GOODS WHICH DOES NOT BELONG TO HIM.

Rights of Pawnee

1)Pledgee has the right to retain the goods pledged until the pledger repays his debts,interest and other expenses if any.

2)Pledgee has the right to sell or auction the goods pledged if the pledger is unable to repay within the specified time.

3)Pledgee has the right to transfer the goods in his own name if the pledged loan is not recovered by selling or auctioning.

cont.

4)Pledgee has right to claim compensation against the pledger for any loss suffered by him due to default in payment of debt in time.

5)If loan amount including interest and other expenses is not recovered by selling or auctioning the pledged goods of the pledger the pledgee can recover the due amount from other assets of the pledger.

6)If the pledger pledged the goods obtained by him unknowingly,as soon as he is aware of the fact , he can rescind the contract.

Duties of Pawnee

1)Pledgee has to take reasonable care of goods pledged.

2)Pledgee should make any unauthorized use of the goods pledged.

3)Pledgee should not mix the the goods pledged with his own without the consent of the pledger.

4)Pledgee should return the goods pledged to the pledger after payment of debt or completion of work.

5)Pledgee has to return the accretion or profit from the goods pledged.

Duties of Pawnee

1)Pledgee has to take reasonable care of goods pledged.

2)Pledgee should make any unauthorized use of the goods pledged.

3)Pledgee should not mix the the goods pledged with his own without the consent of the pledger.

4)Pledgee should return the goods pledged to the pledger after payment of debt or completion of work.

5)Pledgee has to return the accretion or profit from the goods pledged.

cont.

6)Pledgee has to indemnify the pledger for any loss suffered by him if ,if the goods are lost,destroyed etc.

7)Pledgee has to refund the surplus amount to the pledger after selling or auctioning of the pledged goods.