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of <h1>Pawnee Rights: Section 176 of Indian Contract Act Allows Sale of Pledged Goods After Pawnor Defaults</h1> Section 176 of the Indian Contract Act, 1872, addresses the rights of a pawnee when a pawnor defaults on a debt or promise for which goods were pledged. The pawnee can either sue the pawnor for the debt or retain the pledged goods as collateral. Alternatively, the pawnee may sell the pledged goods after giving reasonable notice to the pawnor. If the sale proceeds are less than the debt, the pawnor remains liable for the balance. If the proceeds exceed the debt, the surplus must be returned to the pawnor.
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