Rights of Pawnor and Pawnee:
I. Rights of Pawnor
The following are the rights of Pawnor:
1. Right to receive back the goods: The pawnor has the right to receive the goods back after he has
paid the loan or interest or performed his promise.
2. Right to the redemption of debt: If the pawnor fails to perform the promise of repayment of time, debt
within the time, the pawnor still has the right to redeem his goods before their sale. However, he needs to
pay the expenses that arise due to him.
3. Right to maintenance and preservation of goods: The pledgor has the right to see whether the
pawnee is preserving and maintaining the goods properly or not.
4. Rights of the ordinary debtor. He will have all the rights similar to those of the ordinary debtor
provided by various Indian laws.
II. Rights of Pawnee:
The following are the rights of the Pawnee, to whom the goods are pledged.
1. Right to Retain Goods: According to Section 173, he has a right to retain the goods pledged until the
loan is repaid. He can also retain them for the interest of the debt and all expenses incurred while
preserving the goods. He has only the right to a particular lien on goods.
2. Right to retain subsequent advance: The Pawnee has the right to retain the pledged goods,
including money lent by him, after the date of the pledge if there is no agreement contrary to it.
3. Right to Unordinary Expense: According to section 175, the pawnee has a right to claim the
extraordinary expenses incurred by him in preserving the goods. He does not have the right to lien over
these goods but can approach the court for recovery.
4. Right against true owner: According to Section 178A, if there is any defect in the title of pledgor to the
pledged goods that makes the contract voidable, the pawnor still has the right to acquire good title to the
goods if it is in good faith.
Duties Of the Pawnor
The duties of a pawnor in the case of the contract for the pledge are explained below.
To compensate for the expenses, – The pawnor must compensate all the ordinary and extraordinary
expenses incurred by the pawnee for maintaining the well-being of the pledged goods.
To repay the entire amount along with interest, – It is the responsibility of the pawnor to repay the amount
due to the pawnee. This amount could be the principal amount or the interest that has occurred during the
contract.
To disclose the faults in the goods: Before entering into the contract, the pawnor must state all the
material facts and faults in the goods to the pawnee. If the pawnor does not disclose the faults and the
pawnee suffers losses, the pawnor must cover all the damages.
Duties of the Pawnee
A few of the important duties of the pawnee are stated below.
To take reasonable care of the goods under consideration, the pawnee must take reasonable care of
them and pledge them as his own. He should take care of the goods as his personal belongings. If any
losses are incurred due to irresponsibility or negligence in the case of the pawnee, then he is liable to
cover all the damages.
To use the goods only for the authorized purpose, the pawnee must use the goods only for the purpose
that has been stated in the contract. If the pawnee uses the goods for unauthorized purposes, the
pawnee must compensate for the damages.
Return the goods: When the purpose of the contract of the pledge is fulfilled, the pawnee must return the
goods to the pawnor. The goods should be returned to the pawner as per his instructions.
Return the profits arising from the goods. During the contract of pledge, if any profits have been incurred
on the pledged goods, then the pawnee must return the profits to the pawner.
To keep the goods separate, the pawnee must keep the pledged goods separate from the pawnor’s
goods. If the pawnee mixes his goods with the pawnor’s goods, then the pawnee is liable for the
expenses of the separation of goods.
