What is Pledge ? Discuss Right of the Pawnee and Pawner, Rights and Duties of a Pledger, Rights of Pledgee..
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| Pledge |
Pledge.- The Bailment of goods as security for payment of debt or for the performance of a promise is called pledge. In this case the bailor is called pawner and the bailee the pawnee. The bailee in a contract of pledge does not become owner, but as having possession and right to possess, he is said to have special property. Delivery is necessary to complete a pledge. (Sec. 172)
In the case of the bailment/bond, the depositary/bailee has no right with respect to the thing rescued, but merely maintains possession for a specific purpose and, when that purpose is achieved, returning the thing rescued in accordance with the direction of the bailor.
In case of pledge, the debt for securing which the pledge is made, gives the pawnee right over the things pledged and to retain it until the debt is paid, and to sell it on certain conditions for recovering of debt.
The key features of Pledge are:
1. The pledged property will be turned over to the Pawnee.
2. Such delivery will be in compliance with the contract.
3. This delivery will be for security purposes.
4. In addition, the delivery of the articles will be subject to a return condition.
Right of the pawnee in respect of the things pledged:
(1) The pawnee has a right of retainer for the payment of the debt, interest and cost incurred by him in respect of the possession or for the preservation of the thing pledged.
(2) He may retain the goods as collateral security pending his own suit for recovery of the debt.
(3) He may sell the goods pledged on giving the pawner reasonable notice.
(4) Even if the pawner’s title is defective under a voidable contract, the pawnee’s tittle is not affected by it provided he had no notice of the defect.
Right of Sale.- The pawnee can, when the pawner commits default in paying the debt at the stipulated time, sell the goods pledged, without going to the Court, on giving the pawner reasonable notice.
Pawnor rights:-
In the event that Pawnee makes an unauthorized sale of promised property without giving adequate notice and time for the endeavor, the pawnor has the following rights:
• Right to file a claim for reimbursement of assets by paying the debt.
• Right to claim damages and losses due to conversion.
Rights and Duties of a Pledger:
1. The pledgee is entitled to claim the promised guarantee on the repayment of the debt with interest and other charges.
2. The pledger is entitled to receive reasonable notice if the pledgee intends to sell the goods and if he does not receive the notice, he has the right to claim any damages that may result.
3. In case of sale, the buyer is entitled to receive from the beneficiary any surplus that may remain with him after the debt has been paid in full.
4. The pledger has the right to claim any accrual of the committed assets.
5. If a loss occurs in the products due to mishandling or negligence on the part of the buyer, the buyer has the right to claim the same.
Duties-
1. The pledger or buyer must disclose to the pledgee any material defect or extraordinary risk in the goods to which it may be exposed.
2. A pledger is responsible for covering any extraordinary expenses incurred by the pledged for the preservation of the assets.
3. When the buyer has exercised his right to sell goods, the donor must correct any deficit.
4. The pledgor is responsible for any loss caused to the pledged due to defects in its title (pledgor) of the goods.
Rights of Pledgee:
Sections
173-176 deal with the rights of the engaged person.
1. Right to retain the promised assets.
2. Right to recover extraordinary expenses from
the taxpayer/ pledger.
3. Right to demand and sell the pledged
property.
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