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Unit 11: Contract of Pledge

Shareholders should be part of the good and bad times of the company, said a shareholder Notes
who has been holding a Pfizer share since the beginning, when the multinational sent

letters to shareholders inviting them into their fold.
He, along with some other shareholders, were expressing their unhappiness over the
dividend. The dividend for the year ended 2008 was ` 12.50 per share, as compared with
the previous year’s ` 27.50 per share. However, Pfizer’s Chairman, Mr. R.A. Shah, clarifi ed

that there were no motives behind the company’s actions and dividends were generous
when the circumstances warranted it.

On Pfizer Inc’s recently announced plan to raise stake in its Indian subsidiary to 75 per cent,
from the present 41 per cent, he said, that there was no intention to delist, “at this time”.
Unlike info-tech companies, he said, the applicable milestone for Pfizer for reverse book

building was 75 per cent. Creeping acquisition and buy-back was allowed only till 75
per cent, he clarified. Also, he said, Pfizer was also evaluating the possibility of merging

Duchem (that has pharma and animal health businesses) with itself.
Detailing Pfizer’s plans to expand its domestic reach, Mr. Handa said that they would

increase the product portfolio and value offerings from the company. The company was

planning to increase its field force by 300 people, including 100 for just retail sales.
Question
Discuss LIC’s role in Pfi zer. (Hint: Summarize the LIC responsibilities in Pfi zer.)

11.4 Summary

A pledge as the bailment of goods as security for payment of a debt or performance of a
promise.
The person, who delivers the goods as security, is called the ‘pledgor’ and the person to
whom the goods are so delivered is called the ‘pledgee’.

A pledgee has a right to recover any extraordinary expenditure incurred for preservation
of the goods pledged.
The pledgee is required to take as much care of the goods pledged to him as a person of
ordinary prudence would, under similar circumstances, take of his own goods, of a similar
nature.

The pledgee is bound to return the goods on payment of the debt.
11.5 Keywords

Pledgee: The person to whom the goods are so delivered.
Pledgor: The person, who delivers the goods as security.

11.6 Self Assessment

Fill in the blanks:
1. A pledgee has a right to recover any ......................... incurred for preservation of the goods
pledged.
2. The ......................... is bound to return the goods on payment of the debt.
3. The right to retain goods not only for ......................... arising out of the goods retained but
for a general balance of account in favour of certain persons.

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