Contract of Pledge
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Banking Regulations and Business Laws — CAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is a contract of pledge under the Indian Contract Act, 1872?
A pledge is the bailment of goods as security for payment of a debt or performance of a promise, as defined under Section 172 of the Indian Contract Act, 1872.
Under which section of the Indian Contract Act, 1872 is the contract of pledge defined?
Section 172 of the Indian Contract Act, 1872
Who is called the pawnor in a pledge transaction?
The pawnor is the person who delivers goods as security to the creditor (pawnee) under a contract of pledge.
What type of goods can be pledged under the Indian Contract Act?
Movable goods can be pledged as security
Who is called the pawnee in a pledge transaction?
The pawnee is the person to whom goods are delivered as security for a debt or promise, and who holds the right to retain those goods until the obligation is fulfilled.
What is the primary purpose of a pledge in banking transactions?
To secure repayment of a loan or performance of a promise
Under which section of the Indian Contract Act is the right of the pawnee to retain goods defined?
Section 173 of the Indian Contract Act, 1872 defines the pawnee's right to retain the pledged goods until the debt is repaid along with interest and expenses.
Under Section 173 of the Indian Contract Act, what can a pawnee retain goods for?
For interest, debt, and necessary expenses incurred
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