Page 113 - DCOM103_COMMERCIAL_LAW

Commercial Law

Notes 4. A ......................... as the bailment of goods as security for payment of a debt or performance
of a promise.
5. ......................... is a right in one person to retain that which is in his possession, belonging to
another, until some debt or claim is paid.

11.7 Review Questions

1. Discuss the characteristics of a pledge.
2. What are the respective rights and duties of a pawnor and a pawnee?
3. When is a pledge created by non-owners valid?
4. When a pledgor fails to redeem his pledge, what rights does the pledgee have in the
pledge?
5. “Every pledge is a bailment, but every bailment is not a pledge”. Discuss.
6. A picture dealer in Mumbai sends pictures to an agent in Delhi, some being for sale and
some for exhibit. The dealer shortly afterwards revokes the agent’s authority either to sell

or to exhibit the pictures and directs hire them. In defiance of these instructions, the agent
pledges the pictures with a pawnbroker. Is the pledge valid?
7. A, a doctor, by the exercise of undue infl uence, persuades his patient B to sell a valuable
diamond to him at a very low price. A obtains possession of the diamond and pledges it
with C. Is this a valid pledge?
8. A borrows ` 100 from B on 1st March, and pledges his wrist watch to secure the advance.

Subsequently on 1st June A borrows another sum of ` 100 from B. A repays the first debt in
full. Can B retain the wrist watch against his claim for the repayment of the second Joan?

Answers: Self Assessment

1. extraordinary expenditure 2. Pledgee
3. Demands 4. Pledge 5. Lien

11.8 Further Readings

Books G. Vijayaragavan Iyengar (2007), Introduction to Banking, Excel Books, New Delhi,
India.
S.S. Gulshan, Business Law, Third Edition, 2006, Excel Books, New Delhi.
S.S. Gulshan, Mercantile Law, Third Edition, 2006, Excel Books, New Delhi.

Online links www.gyantonic.com/Articles/98374_Indian-Contract-Act
http://resources.lawyersnjurists.com/coursematerials/businesslaw/nsu/amu/
essential-books/a-k-sen/commercial-law-and-industrial-law/contract/Unit-8-
bailment-and-pledge/

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