Definition
The delivery of goods by one person to another for a specific purpose, with a condition to return them. In banking, hypothecation and pledge involve bailment-like relationships. Under a pledge, goods are physically delivered to the bank (bailment), giving the bank a right to sell on default without court order. Under hypothecation, goods remain with the borrower (no bailment).
Related Terms
Pledge
The delivery of movable goods (shares, FDRs, gold, commodities) by a borrower (pledgor) to a lender …
Hypothecation
A charge created on movable assets (machinery, vehicles, stock, receivables) as security for a loan,…
Security Interest
A right, title, or interest of any kind upon property created in favour of a secured creditor as a s…
Need Expert Advice on Bailment?
For specific advice on how Bailment applies to your debt recovery matter, consult Advocate Subodh Bajpai — LLM, MBA (XLRI Jamshedpur). 25+ years of exclusive banking and debt recovery practice across DRT, SARFAESI, IBC, and NI Act.
Defined by Advocate Subodh Bajpai, Senior Partner, Unified Chambers and Associates