Coverage of this Article
Difference between Bailment and Pledge
-A bailment is a contract in which the original owner transfers moveable assets to another person for a specific objective for a limited time
Bailment Case Laws
-In Hyman and wife v. Nye and sons ((1881) 6 QBD 685), the plaintiff (bailee) rented the carriage cart from the defendant (bailor).
Pledge Case Laws
-In State Bank of Saurastra v. Chitranjan Rangnath Raja and Anr. (1980), the bank was the Pawnee, and the defendant was the pawnor.
Conclusion
-Both bailment and pledge are contracts in which we hand over our possessions to another person or entity.
Difference between Bailment and Pledge
BASIS |
BAILMENT |
PLEDGE |
| Statute | Section 148 of the Indian Contract Act of 1872 defines bailment. | Section 172 of the Indian Contract Act, 1872 defines a pledge. |
| Meaning | A bailment is a contract in which the original owner transfers moveable assets to another person for a specific objective for a limited time. | Pledge is a contract in which assets are given to another person as a guarantee of payment or debt repayment. |
| Rights To Sell The Goods | The party to whom goods are delivered does not have the authority to sell the goods. | If the party delivering the goods as security fails to pay the obligation, the party receiving the goods has the right to sell the commodities. |
| Consideration | Consideration may or may not be present. | Consideration is always present. |
| Parties | The Bailor is the person who delivers the goods, whereas the Bailee is the person to whom the commodities are offered. | Pawnor refers to the person who delivers the products, whereas the Pawnee refers to the person to whom the goods are given. |
| Liability | The Bailee cannot be held liable for the asset's loss or destruction, as stated in section 152. | If the pledged asset has been lost or destroyed due to the Pawnee's carelessness, the Pawnee's claim against the pawnor may be lost to that extent. |
| Use Of Goods | The recipient of the goods can only utilize them for the purpose for which they were supplied. | The party to whom the products are given does not have the right to utilize them. |
| Purpose | Safekeeping of belongings, repairing, cleaning, etc. | As collateral for a loan or payment. |
| Example | Giving our automobile to be repaired is an example of bailment. | Taking out loans from the bank and using our gold as collateral is an example of a Pledge. |
Bailment Case Laws
- In Hyman and wife v. Nye and sons ((1881) 6 QBD 685), the plaintiff (bailee) rented the carriage cart from the defendant (bailor). The carriage was involved in an accident while on the voyage since it was not suited for the travel. The defendant was deemed accountable in this case since it was his responsibility to maintain the good properly and to notify the bailee of any defects in the products.
- In Sri Narasimhaswami, Namagiri Amman v. Muthukrishna Iyengar (1961), the plaintiff had supplied significant gold for goddess decoration to the defendant. The ornaments were lost as a result of the defendant's carelessness. The plaintiff sought compensation from the defendant in this case. The court granted the petition and found the defendant responsible under section 151 of the ICA.
Pledge Case Laws
- In State Bank of Saurastra v. Chitranjan Rangnath Raja and Anr. (1980), the bank was the Pawnee, and the defendant was the pawnor. The pawnor bailed his 5000 tins of groundnut oil as security against Rs. 75000. The defendant passed away. The defendant's bailed commodities were missing from the bank's possession. After the time limit had passed, the bank filed a lawsuit against the defendant, requesting restitution of the funds. The bank claimed that as the Pawnee, they had the right to receive their money back, but they could not do so since they lost the plaintiff's commodities, which have a market worth of Rs. 75000. As a result, the case was rejected.
- The Supreme Court said in Lallan Prasad vs. Rehmat Ali (1967) that a pledge is a special sort of bailment in which the pledger commits his personal property to the pledged as security for a debt. Any type of movable property can be pledged, according to the Court.
Conclusion
Both bailment and pledge are contracts in which we hand over our possessions to another person or entity. However, the goal of the handover is different for both terms. In comparison to bailment, the pledge has a restricted scope. To summaries, every pledge is a bailment, but not every bailment is a pledge.
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