Basis of distinction between bailment and pledge

The main basis of distinction between bailment and pledge lies in the purpose of the transaction. Let's explore this in detail:

Bailment:
- A bailment refers to a legal relationship where one party (the bailor) delivers possession of goods to another party (the bailee) for a specific purpose.
- The bailee is entrusted with the goods and is responsible for their care and safekeeping.
- The bailee does not gain ownership of the goods and must return them to the bailor once the purpose of the bailment is fulfilled.
- The bailor retains ownership and control over the goods throughout the bailment period.
- The primary focus of bailment is the safekeeping and return of the goods to the bailor.

Pledge:
- Pledge, on the other hand, is a type of bailment where the delivery of goods is made as security for a debt or obligation.
- In a pledge, the bailor (pledgor) delivers possession of goods to the bailee (pledgee) to secure the performance of a contract or the repayment of a debt.
- The pledgor retains ownership of the goods, but the pledgee has the right to possess and sell the goods in case of default.
- The key purpose of a pledge is to provide security for the fulfillment of an obligation.

Key differences:
1. Purpose: The primary difference between bailment and pledge lies in their purpose. Bailment focuses on safekeeping and return of goods, while pledge is aimed at securing an obligation.
2. Ownership transfer: In bailment, ownership of the goods remains with the bailor, whereas in pledge, ownership also remains with the pledgor.
3. Rights of the bailee: In bailment, the bailee has the responsibility to take care of the goods, but does not have the right to sell or dispose of them. In pledge, the pledgee has the right to possess and sell the goods in case of default.
4. Consent: The consent of the bailee is not a distinguishing factor between bailment and pledge, as both require the consent of the bailee.

Conclusion:
In summary, the main basis of distinction between bailment and pledge lies in the purpose of the transaction. Bailment focuses on safekeeping and return of goods, while pledge is aimed at securing an obligation. Ownership remains with the bailor in both cases, but the pledgee has additional rights in a pledge. The consent of the bailee is required in both bailment and pledge.