TaxTMI 
TaxTMI 
1969 (2) TMI 193
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....lue of Rs.100 per share originally stood in the joint names of respondent No. 2 and his brothers respondents Nos. 3 and 4. Respondent No. 2 entered into a partnership with the appellant under the name of New Shares Corporation. 3. This firm, New Shares Corporation, had an overdraft account with the Hindustan Commercial Bank Ltd., respondent No. 5. As a security in the said account, 91 shares out of the said 101 shares of the Punjab National Bank Ltd. were pledged by the said firm with respondent No. 5, who, in a suit for the recovery of money due, obtained a decree for the amount found due to it. It was however, held by the High Court in the said suit, that only l/3rd right of respondent No. 2 in those shares had been pledged, as the ....
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....id, as also in the accumulated dividends. Respondent No. 5 was the main contesting party in the suit. According to it, respondents Nos. 3 and 1 had no interest in the original shares, all of them having been pledged in Its favor by the New Shares Corporation as rightful owner. The decision in the earlier suit No. 179/55. according to it, was not binding upon it and, at any rate, ill the interest of the appellant and respondent No. 2 in the said shares including their interest in the bonus and right shares and in the accumulated dividends was subject to its pledge. Hence, no partition could take place at all. The following issues were framed: -- 1. Whether the defendant No. 5 (now respondent No. 5) is not bound by th....
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.... what he calls as 'principle of law in the case of mortgages and has also discussed the rights, as between the buyer and seller in the case of a transfer of shares. The distinction between the pledge, the mortgage and the sale has not been properly appreciated by him. Pledge is defined in S. 172 of the Indian Contract Act which is reproduced as follows:-- "The bailment of goods as security for payment of a debt or performance of a promise is called 'pledge'. The bailor is in this case called the 'pawner.' The bailee is called the 'pawnee'." Under S. 176 of the Contract Act- "If the pawner makes default in payment of the debt, or performance, at the stipulated time of....
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.... K. V. S. Sundara Narasayyamma Garu v. Andhra Bank Ltd., AIR1960AP273 . It was observed in the said case: "The essential distinction, Therefore, between a pledge and a mortgage is that unlike a pledge a mortgage acquires general property in the thing mortgaged subject to the right of redemption of the mortgagor. In other words, the legal estate in the goods mortgaged passes on to the mortgage. But a pledge has only the special property in the goods pledged, namely, the right of retainer of the goods as security, and in case of default he must either bring a suit against the pawner or sell the goods after giving a reasonable notice." 11. It will, thus, be seen that the pawnee acquires a right, after notice, to ....