Pledge

The concept of pledge is dealt with in Section 172 and Section 179 of the Indian Contract Act, 1872. In reality, in Mulla’s book on Transfer of Property Act, for the term ”pledge”, it is described as under:-

“A pledge is a bailment of movable property by way of security. Possession is given and the transaction involves a transfer of special property in the subject of the security. A pawnee has no right of foreclosure since he never had absolute ownership at law and his equitable title cannot exceed what is specifically granted by law. In a pledge the pledgee is in possession of and has a special property in the goods which he is entitled to detain to secure repayment.”

14. Section 172 of the Contract Act, provides that bailment of goods as security or payment of debt or performance of a compromise is called ‘pledge’. ‘Bailor’ is the ‘Pawnor’ and ‘Pawnee’ is the ‘Bailee’.

15. Section 148 of the Contract Act, provides that bailment is the delivery of goods by one person to another for some purpose, based on a contract that they shall, when the purpose of fulfilled, be returned or otherwise, disposed of according to the directions of the individual delivering them. The individual delivering the goods is called ‘Bailor’ and the person to whom the goods are delivered is ‘Bailee’.