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Rights of Pawnee and Pawnor

The bailment of goods as a security for payment of a debt or performance of promise is called ‘pledge’. The person with whom the goods are pledged is known as ‘Pawnee’ or Pledgee’. The person pledging the goods is known as ‘Pawnor’.

The rights of the pledgee or pawnee are mentioned in Section 173 to 176 of the Indian Contract Act,1872.

Rights of Pawnee

  1. Right to retain the goods pledged (Section 173 and 174): According to Sec. 173, the right of a pawnee to retain the goods pledged shall not be only for payment of the debt or the performance of the promise, but he can also exercise this right for interest on the debt and all necessary expenses incurred by him in respect of the possession or for the preservation of the goods pledged. According to Section 174, a pawnee can retain the goods pledged only as a security for that debt or promise for which they are pledged, but there is a presumption that if there are subsequent advances, they are also the part of the original debt and the pawnee may retain the goods and to recover subsequent advamces also. This is merely a presumption which could be rebutted by contract to the contrary. The pawnee is bound to redeliver the goods after he gets what is due to him.
  2. Right to recover extraordinary expenses incurred by pawnee (Section 175) : According to section 175, the pawnee is entitled to receive extraordinary expenses incurred by him for the preservation of the goods pledged from the pawnor.
  3. Right of suit to recover debt etc., and sale of the pledged goods (Section 176) : Section 176 confers right on the pawnee, including right of selling the pledged goods if the pawnor makes a default in payment of debt or performance of promise at the stipulated time. This section confers following rights on pawnee on the pawnor’s default in fulfilling promise:-. a) he may bring a suit against the pawnor upon the debt or promise and retain the goods pledged as collateral security. b) he may sell the good pledged on giving reasonable notice of the sale to the pawnor.

Right of Pawnor

Right of Pawnor to Redeem (Section 177): The pawnor has right to redeem the goods pledged, i.e., take back the goods from pawnee on payment of the agreed debt or performance of the promise in accordance with the agreement. He can exercise the right to redeem before the pawnee has made an actual sale of the goods.

Legal Heir’s Right to Redeem: In case of death of a pawnor, the pledge made by him can be redeemed by his legal heirs on meeting the liabilities concerning the pledge.

QUASAI- CONTRACT

Introduction:- There are many situations in which law, as well as justice, require that a person be required to conform to an obligation, although he has neither broken any contract nor committed any tort. Chapter V of the Indian Contract Act deals with the situations under the heading “Of certain relations resembling those created by Contract”. The chapter avoids the word “Quasi-contract” and given the clear statutory authorization, the courts in India are not hindered in allowing relief under the different sections of the Act by the theoretical considerations concerning quasi-contracts.

Conditions of quasi- contract:-

(1) A legal agreement created by the courts between two parties who did not a previous obligation to each other.

(2) A normal contract requires two parties to consent to mutually agreeable terms under a quasi-contract neither party is originally intended to create an agreement. Instead, an agreement is imposed by a judge to rectify an occurrence of unjust enrichment.

(3) Courts create quasi-contracts to protect the unjust enrichment of the parties in dispute over payments of goods and services.

Salient Features of quasi-contractual rights:-

(a) Firstly, it does not arise from any agreement of the parties concerned but is imposed by the law, and

(b) Secondly, it is a right that is available not against the entire world but a particular person or persons only.

Kinds of quasi-contractual Obligations:- Section 68 to 72 provide for 5 kinds of quasi-contractual obligations are as follows:

(1) Supply of necessaries

S.68. Claim for necessaries supplied to a person incapable of contracting, or on his account.

Persons incapable of contracting includes:

• a minor

• person of unsound mind

• person disqualified by law to which they are subjected

Illustration:- A supplies B, a lunatic, with necessaries suitable to his condition in life. A is entitled to be reimbursed from B‘s property.

(2) Payment by interested person

S.69. Reimbursement of person paying money due to another, in payment of which he is interested.

Essential requirements of section 69:

• payer must be interested in making payment

• but should not be bound to pay

• defendant should be under legal compulsion to pay

• payment should be by one to another

(3) Liability to pay for non-gratuitous acts

S.70. Obligation of person enjoying the benefit of non-gratuitous act.

Essentials:

• a person should lawfully do something for another person or deliver something to him;

• in doing the said thing or delivered the said thing he must not intend to act gratuitously;

• the other person for whom something is done or to whom something is delivered must enjoy the benefit thereof.

(4) Finder of goods

S.71. Responsibility of finder of goods.

• Entitled to retain the goods until he receives the lawful charges or consequences for retaining the goods and taking care of them.

• However, he cannot sue for such compensation unless a specified reward has been advertised by the owner.

• Entitled to possess the goods until the true owner was found.

(5) Mistake or coercion

S.72. Liability of person to whom money is paid, or thing delivered by mistake or under coercion- A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it.

Illustration: A and B jointly owe 100 rupees to C. A alone pays the amount to C, and B, not knowing this fact, pats 100 rupees over again to C. C is bound to repay the amount to B.