Law: Contract Act (IX of 1872)

Section: 172

Law: Banking Tribunals Ordinance, 1984

Section: 6

(a) Maxim ----"Qui prior est tempore potior est jure" (He has a better title, who was first in point of time). Bibhuti Bhusan Shome v. Baidya Nath Dey and another 40 C.W.N. 625 ref.(b) Contract Act (IX of 1872)---S.172---Preferring charge of hypothecation over charge of pledge---Scope---Secured creditor had preferential right--�Such right could not be defeated by un-secured creditor. The Bank of Bihar v. The State of Bihar and others AIR 1971 SC 1210; Bank of India v. Messrs Binod Steel Ltd. and another AIR 1977 Madhya Pradesh 188 and The State Bank of Hyderabad v. Sucheela and others AIR 1980 Andhra Pradesh 1 rel.(c) Contract Act (IX of 1872)--------S.172---Pledge of goods---Essential ingredients stated.The essential ingredients of the pledge are (1) there must be bailment of goods as defined in section 148 of the Contract Act i.e. delivery of goods, (2) bailment must be by way of security, (3) Security must be for payment of debt or performance of promise. In order to constitute a valid pledge, what is essential is that there must be a delivery of the article, either actual or constructive, to the pawnee. Possession is an equivocal term; it may mean either mere' manual possession or the mere right to possession. Constructive delivery will be adequate to constitute a pledge, and it applies to all those cases, where the pledgor remains in possession of the goods under the specific authority of the pledgee or for limited purposes. Nadar Bank Ltd. Madurai v. Canara Bank Ltd. and others AIR 1961 Mad. 326; Martin v. Reed (1862) 142 ER 982; Chitty on Contracts, Volume II, 21st Edn, Para.130 at page 73 and Messrs Capital Farms, Islamabad v. National Development Finance Corporation PLD 1996 Lah. 99 ref.(d) Contract Act (IX of 1872)--------S.172---Pledge and ownership---Distinction.Pledge is the delivery of goods by the pledgor to the pledgee by way of security upon a contract that they shall, when the debt is paid or the promise is performed, be returned or otherwise disposed of according to the directions of the pledgor. A pledge would, therefore, create an estate, which vests in the pledgee, which is distinguishable from ownership, since an…