Posted February 1, 2014 by advocateguru in Learning Centre

Rights of Pawnee

No property in goods pawned passes to the pawnee, but the pawnee gets a “special property to retain possession even against the true owner until the payment of the debt, interest on the debt, and any other expense incurred in respect of the possession or for preservation of the goods” (Section 173). The Pawnee must return the goods to the Pawnor on the tender of all that is due to him. The Pawnee cannot confer a good title upon a bona fide purchaser for value.

Should the pawnor make a default in payment of the debt or performance of the promise, at the stipulated time, the Pawnee may:

(i) file a suit for the recovery of the amount due to him while retaining the      goods pledged as collateral security; or

(ii) Sue for the sale of the goods and the realisation of money due to him; or

(iii) Himself sell the goods pawned, after giving reasonable notice to the pawnor, sue for the deficiency, if any, after the sale.

If the sale is made in execution of a decree, the Pawnee may buy the goods at the sale. But he cannot sell them to himself in a sale made by him. If after sale of the goods, there is surplus, the Pawnee must pay it to the pawnor.