PPT on "Pledge" for BBA & B.Com 1st year students, CA, CPT, CS & CMA Foundation. Business Law PPT by Sandeep Sharma. Meaning with suitable example & explanation.

1. PLEDGE / PAWN
Chapter – 17
PPT by Sandeep Sharma

2. MEANING/DEFINITION: PLEDGE
Section 172
Pledge is a special kind/type of bailment.
bailment of goods as security for payment of
a debt.
Section 172 (Definition) – Section 182
(Pledge - गिरवी रखना)

3. PLEDGEEPLEDGER
PAWNEEPAWNER
RECEIVERGIVER
pledge goods
(diamond ring)

4. PLEDGEEPLEDGER
pledge goods
(diamond ring)
grant loan
(5 lakhs)
Example

5. Pledge
i). Specific Purpose
(eg:- security of a loan).
ii). Right of sale of
goods in case of default.
iii). Can not use the
goods.
Bailment
i). Bailment of goods
other then pledge.
ii). No right of sale of
goods.
iii). Bailee can use the
goods.

6. ESSENTIALS OF PLEDGE
1) Bailment for security: security for payment of a
debt.
2) Goods: here goods do not include ‘Money’, but
includes all movable properties.
3) Existing goods: only existing goods can be pledge
not contingent goods.

7. 4) Delivery: goods must delivered from
pledger to pledgee, it can be actual,
symbolic or constructive.
5) Priority of claim: pledge is to secure the
payment of debt, so pledgee becomes
secure creditor & he has prior claim then
the other creditors.
ESSENTIALS OF PLEDGE

8. 1) To get back the goods: by paying the debt.
2) To redeem the goods: as a defaulter he still can
redeem at any time before the sale of goods, but
for that he must pay extra expense occurred.
3) To receive the additional benefits
4) To exercise rights of debtor: every debtor has
certain rights against his creditor.
RIGHTS OF PLEDGER

9. 1) To keep in possession of the goods: pledgee has right
on the goods pledged.
2) To sue against the pledger: in case of pledger’s
default in payment.
3) To sell the goods: if the pledgee doesnot want to sue
, he may sell the goods.
4) To recover the balance: if the value of goods is lesser
then the loan amount then pledgee can recover the
difference amount.
RIGHTS OF PLEDGEE

10. 1) To disclose the defects in the goods
2) To pay the debt on time
3) To pay interest or other expenses
4) To redeem goods before sale
DUTIES OF PLEDGER
(redeem – regain possession)

11. 1) To take care of the goods
2) Not to use the goods pledged
3) Not to mix the goods with his own
4) To return the goods after payment
5) To return the additional benefits
6) To give Notice before the sale of pledged goods
DUTIES OF PLEDGEE

12. Generally only a person who is the real owner of the goods can
make a valid pledge, but in the following cases, pledge made
by non-owners will also be valid.
Non-owners are as under:-
i. Pledge by Mercantile agent
ii. Pledge by Co-owner
iii. Pledge by seller in possession of goods
PLEDGE BY NON-OWNER

13. END OF CHAPTER
PPT by Sandeep Sharma