A pawnee is not bound by the rigours of Section 73 of the Contract Act, 1872 and can choose his own time to sell the pledged goods after giving due notice to the pawnor.

Debangsu Basak, J.

The suit is for recovery of money lent and advanced against pledge of shares.

The plaintiff contends that, it had lent and advanced a sum of Rs.1,10,00,000/- to the defendant against security of shares pledged by the defendant with the plaintiff. According to the plaintiff, from time to time between June 2000 to January 2001 the plaintiff had advanced a sum of Rs.1,10,00,000/- to the defendant and the defendant had pledged shares from time to time as security thereof.

The plaintiff states that the shares pledged by the defendant lost their value substantially. The plaintiff had requested the defendant to pledge further shares. The defendant however, did not do so. The defendant had paid interest up to March 31, 2001 with such payment being made on April 24, 2001.

The plaintiff had, thereafter, issued a demand letter dated January 14, 2001. The defendant did not pay in spite of such demand. The plaintiff, thereafter, sold the pledged shares for the value of Rs.8,55,400/-. The plaintiff claims decree for the balance amount from the defendant along with interest and costs.

The defendant has filed its written statement. The defendant contends that, the transactions were had through a broker. The defendant had pledged shares to the plaintiff as security for the loans advanced. The defendant points out that, the shares pledged were actually transferred in the dematerialized account of the plaintiff by the defendant. The defendant by a letter February 7, 2001 had called upon the plaintiff to sell the shares pledged with it. The defendant was informed by the broker that the pledged shares were sold and that on payment of Rs.1,68,000/- the account would stand squared up. The defendant had paid the said sum of Rs.1,68,000/- by cheque on April 20, 2001 as full and final settlement of the accounts between the parties. The defendant refers to the transactions had by the defendant with the sister concern of the plaintiff and claims that the accounts was squared up by the payment of the sum of Rs.1,68,000/- by the defendant to the plaintiff. The defendant denies receipt of the letter dated February 14, 2002. The defendant claims that the plaintiff had sold the shares on February 20, 2001 when the defendant was asked the plaintiff to do so, the plaintiff would have received a far greater value in such shares. The defendant also contends that the plaintiff was obliged to mitigate its damages under Section 73 of the Indian Contract Act, 1862.

The issues were settled by the Order dated December 3, 2013.

The issues are as follows:-

1. (a) Was there any agreement between the plaintiff and the defendant as alleged in paragraph 1 of the plaint?

(b) Did the plaintiff lend and advance any amount pursuant to such agreement?

2. Was there any agreement between the parties as alleged in paragraph 2 of the written statement?

3. Did the defendant receive the notice dated 14th January, 2002?

4. Was the plaintiff entitled to sell the shares pledged by the defendant to the plaintiff as security for the loan rendered by the plaintiff to the defendant of a sum of Rs.1,10,00,000/-?

5. Is the plaintiff entitled to decree as claimed in the plaint?

6. Did the plaintiff receive the letters dated 7th February, 2001 and 20th April, 2001?

7. To what other reliefs is the plaintiff entitled?

The plaintiff examined one witness in support of his case. The defendant also examined one witness on its behalf.

The issue nos. 1 and 2 are taken up together for the sake of convenience. On these two issues, the learned Senior Advocate for the plaintiff contends the agreement between the parties is stated in paragraphs 1, 2 and 3 of the plaint. Issue no. 1(a) should be read in such context. He points out that, the plaintiff has stated in paragraph 2 of the plaint that it had lent and advanced the sum of Rs.1,10,00,000/- between the period June 2000 to January 2001. He refers to Exhibits ‘C’ to ‘G’ and submits that, a sum of Rs.1,10,00,000/- was paid by t