26 February, 2016

Distinguish between Pledge and Mortgage

Pledge and Mortgage can be distinguished as follows:-
1.      Pledge is defined under Section 172 of the Contract Act, 1872.
2.      Movable property can only be the subject-matter of the pledge under the Contract Act.
3.      Pledge is a kind of bailment and security.
4.      The main purpose of the pledge is to put the goods pledged in the power of the pawnee to reimburse himself for the money advanced by selling the goods after giving due notice to the pawner. The pawnee at no time becomes the owner of the goods pledged. He can only retain the goods until his claim for the money advanced thereon has been satisfied.
1.      Mortgage is defined under Section 58 of the Transfer of Property Act 1882.
2. Immovable property can only be the subject-matter of the mortgage under the Transfer of Property Act.
3.      A mortgage is not so.

4.  In a mortgage, an interest in the mortgaged property is transferred in favour of the mortgagee which is subject to the right of redemption of the mortgagor.
Courtesy:- Legal Point Foundation

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