Pledge
kalpesh1963
(Querist) 25 February 2012
This query is : Resolved
Please advise in case of pledge of goods against short term loan taken from the banks.
Now, it is whose responsibility to check the quality of the goods kept in possession of the banks.
either pledgor or pledgee??
If the materials is damage/inferior in quality then how to resolve the issue??
we do not want to take back the goods as it has no value?
kindly advise
V R SHROFF
(Expert) 25 February 2012
Bank is not liable for Quality of goods.
Bank do not change material.
do you want bank be blamed for t?? In whose godown / physical custody the material was ??
kalpesh1963
(Querist) 25 February 2012
materials under the custodian of the appointed person by bank and it is under their supervision.
Raj Kumar Makkad
(Expert) 25 February 2012
In the given matter only banker is liable as the goods were kept under the supervision and custody of bank.
RAJU O.F.,
(Expert) 26 February 2012
Bank gives loan against the pledge of goods considering its quality and quantity and also its market value, keeping a margin. Before keeping the goods under pledge, both the borrower and banker have to ensure maintainance of its quality during the passing of days and months. The pledge would be only for a specified period, before which the borrower has to repay and take back the goods. If the borrower failed in releasing the pledge, after giving notice to the borrower banker had to sell the goods for recovery of the money. A good trader would not cause the banker to do that.
J K Agrawal
(Expert) 26 February 2012
Dear Sirs
The Law is somewhat differ.
As per section 150 of the Indian Contract Act it is only bailor (Here Borrower) who is liable to disclose faults of the goods. The Bailee is to take only "reasonable care" as per section 151 and if he has taken so, he is not liable for damage and only bailor is liable under section 152.
Borrower does not seems to be non accountable if the bank not kept the goods exposed in open and uncared.
shivam......
(Expert) 27 February 2012
Bank is liable to maintain reasonable care of goods under its possession.. and in case of probability of the damage to the goods bank may sale to recover its dues under notice to the pledger
malipeddi jaggarao
(Expert) 28 February 2012
You have not given the full facts. Generally Banks discourage pledge facility nowadays. If hypothecation is converted into pledge by the bank apprehending misuse of sale proceeds and not repaying the debt, the banks convert the hypothecation into pledge. Yes, in such case bank has to take reasonable care as a prudent man takes care of his own goods. But you have to prove the negligence on the part of the Bank, which may not be easy all times.
R Trivedi
(Expert) 29 February 2012
we do not want to take back the goods as it has no value?
What do you mean no value ??
Is the goods damaged while in the custody of Bank ? In general Bank will not keep any perishable material pledge.
Is the price of the goods crashed after it is pledged ?
If it is not the Bank fault, then Bank can realize the money by auctioning the goods and if this money is short, bank can further initiate legal recovery from you. The law is very clear if the value of mortgaged property got reduced due to any reasons (not the negligence on the part of Bank in maintaining the same, in case if it is under Bank direct control), then Bank is at liberty to get the full dues legally. The process is onerous for the bank, but then they do it. For example if you keep your non movable assets like land or building mortgaged against certain loan, and the value of this asset get reduced even due to natural calamity, still it is your liability to clear the full dues. Please read the terms & conditions of the loan.
