What are the differences among Mortgage, Pledge and
Hypothecation ? please any body reply me in simple language
as I have read many articals on it still I find my self
anble to explain it, I always get confused.
If want to tell personally please send me email or add me
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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.
in case of pledge the physical possession of the property
is parted and the pledgee has a right to sell the pledged
item if the conditions of the pledge is violated.
in case of Hypothecation whcih is alwasys for moveable
property the owner of the Goods will continue to enjoy the
possession of the same untill and unless the other person
takes action to seize the goods Hypothecated.
Mortgage:- In mortgage,the asset is given as a security to obtain a loan.The physical possession of the asset can be parted(but transfer of possession is NOT necessary).The owner of the asset has NO RIGHT TO SELL THE ASSET.
Pledge:- The assets are PHYSICALLY TRANSFERRED as security to obtain a loan.
Hypothecation:- In this case the asset remains with the borrower.However, he has the RIGHT TO SELL the asset in NORMAL COURSE OF BUSINESS