Suhani Gandhi, BBA LLB (Hons.), SVKM’s Narsee Moonjee Institute of Management Studies, Bengaluru
ABSTRACT
With numerous loans being granted every day in society it becomes necessary to have some security on the part of the creditor. In our society, both secured and unsecured loans are granted at an enormous number which makes it very necessary to have some insurance or say collateral security. Especially in the commercial market where the loan is granted just on a trust basis. The Indian Contract Act, 1872 comes into the picture with its sections and exceptions to protect the rights and impose the liabilities on both the creditor and the debtor (named as pawnor and pawnee, mortgagor and mortgagee, pledger, and pledgee in this paper). With the numerous transactions happening in society, we will discuss and analyse different cases regarding both the pledge and mortgage and how the law was applied to come up with the judgement. And how the different Session courts/ Tribunals/ High Courts and the apex court interpret law for taking decisions. Along with the interpretating the sections of the Indian Contract Act, 1872, this paper also discusses some of the sections of the Transfer of Property Act 1882, relevant to the topic of this paper. A critical analysis of adjudicated case laws, loopholes in the laws, and suggestions to improve the prevailing law for the betterment of society are also done in this paper with the essential ingredients, and types of both the pledge and the mortgage. For a better understanding of this paper for the readers, the same laws are compared with the law of the United Kingdom through case law. Finally, the paper will conclude with some significances of the prevailing law in the courts of India.
Keywords: Pledge, Mortgage, Pawnor, Pawnee, Mortgagor.
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