Section 176 in The Indian Contract Act, 1872
Title: Pawnee's right where pawnor makes default.
If the pawnor makes default in payment of the debt, or performance, at the stipulated time of the promise, in respect of which the goods were pledged, the pawnee may bring a suit against the pawnor upon the debt or promise, and retain the goods pledge as a collateral security; or he may sell the thing pledged, on giving the pawnor reasonable notice of the sale.
If the proceeds of such sale are less than the amount due in respect of the debt or promise, the pawnor is still liable to pay the balance. If the proceeds of the sale are greater than the amount so due, the pawnee shall pay over the surplus to the pawnor.
Title: Defaulting pawnor's right to redeem.
If a time is stipulated for the payment of the debt, of performance of the promise, for which the pledge is made, and the pawnor makes default in payment of the debt or performance of the promise at the stipulated time, he may redeem the goods pledged at any subsequent time before the actual sale of them1; but he must, in that case, pay, in addition, any expenses which have arisen from his default.
1. For limitation, see the Limitation Act, 1963 (36 of 1963), the Second Schedule.
Title: Pledge by mercantile agent.
1Where a mercantile agent is, with the consent of the owner, in possession of goods or the document of title to goods, any pledge made by him, when acting in the ordinary course of business of a mercantile agent, shall be as valid as if he were expressly authorised by the owner of the goods to make the same; provided that the pawnee acts in good faith and has not at the time of the pledge notice that the pawnor has not authority to pledge.
Explanation.-- In this section, the expressions mercantile agent and "documents of title" shall have the meanings assigned to them in the Indian Sale of Goods Act, 1930 (3 of 1930).
1. Ss. 178 and 178A subs. by Act 4 of 1930, s. 2, for the original s. 178.
Title: Pledge by person in possession under voidable contract.
When the pawnor has obtained possession of the goods pledged by him under a contract voidable under section 19 or section 19A, but the contract has not been rescinded at the time of the pledge, the pawnee acquires a good title to the goods, provided he acts in good faith and without notice of the pawnor's defect of title.]
Title: Pledge where pawnor has only a limited interest.
Where a person pledges goods in which he has only a limited interest, the pledge is valid to the extent of that interest.