Saturday, April 29, 2017

What are the differences among Mortgage, Pledge and Hypothecation?

Answer


 Ø  Mortgage is made as a security for the repayment of a debt- present or past, an interest of the owner in the property. Mortgaged is to some extent parted or transfer. The physical possession of the property may or may not be parted.

Ø  Pledge is the bailment of goods (under the possession of the Bank)  as security for payment of a debt. Title & ownership is not transferred but the pledgee has a right to sell the pledged item if the condition of the pledge is violated.

Ø  Hypothecation is a floating charge against stock of goods. It is used in case of advance against movable goods.In case of hypothecation neither ownership nor possession is transferred.
 

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