Section 172 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 172 defines a pledge in one sentence: it is a bailment of goods as security for payment of a debt or performance of a promise. The bailor in that case is called the pawnor, and the bailee is called the pawnee. If you are drafting a document under which goods will be handed over as security, our agreement drafting service can help.
The bailment of goods as security for payment of a debt or performance of a promise is called "pledge". The bailor is in this case called the "pawnor". The bailee is called the "pawnee". A pledge is therefore a kind of bailment: goods are delivered, and the purpose is security. Everything the chapter says about bailment applies to the relationship unless the pledge sections say otherwise, so read section 172 together with section 148.
The text
Section 172 reads: "The bailment of goods as security for payment of a debt or performance of a promise is called 'pledge'. The bailor is in this case called the 'pawnor'. The bailee is called the 'pawnee'."
It sits under the sub-heading "Bailments of Pledges" in the Act, which follows the sections on lien.
The elements
| Element | Words of the section | Plain meaning |
|---|---|---|
| Bailment | "The bailment of goods" | Delivery of goods on the terms described in section 148 |
| Purpose | "as security" | The goods are held as security |
| For what | "for payment of a debt or performance of a promise" | Either a money debt or a promise to do something |
| Parties | "pawnor" and "pawnee" | The bailor and bailee, in this case |
Bailment itself is defined in section 148: delivery of goods for some purpose, on a contract that they will be returned or otherwise disposed of according to the directions of the person delivering them. A pledge is that kind of bailment where the purpose is security.
Pledge is not the same as lien
| Lien (ss.170, 171) | Pledge (s.172) | |
|---|---|---|
| How it arises | The bailee holds goods he already has for other reasons (work done, or a general balance of account in the five listed cases) | Goods are bailed as security for a debt or promise |
| Purpose of the bailment | Something else, such as repair | Security |
| Right | To retain | To retain and, on default, to sue or sell (s.176) |
The particular lien is in section 170 and the general lien in section 171. The pawnee's rights follow in sections 173 to 176.
What a pledge covers: "debt or ... promise"
The section speaks of security for payment of a debt or performance of a promise. The Act's later sections use the same pairing: section 173 speaks of retaining for "payment of the debt or the performance of the promise"; section 176 speaks of default "in payment of the debt, or performance, at the stipulated time of the promise". So a pledge can secure a promise to do something as well as a promise to pay.
The Act prints no illustration under section 172, and none under the pledge sections that follow it (ss.173 to 176) in the source text.
The pledge sections at a glance
| Section | Subject |
|---|---|
| 172 | Pledge, pawnor and pawnee defined |
| 173 | Pawnee's right of retainer |
| 174 | Pawnee not to retain for other debts; presumption for subsequent advances |
| 175 | Pawnee's right to extraordinary expenses |
| 176 | Pawnee's rights where pawnor makes default |
| 177 | Defaulting pawnor's right to redeem |
A modern example of our own
Gopal needs a business loan from a lender, Hema Finance. He hands over a set of gold ornaments to Hema Finance as security for repayment of the loan. The ornaments are goods, the delivery is a bailment, and the purpose is security for payment of a debt. That is a pledge: Gopal is the pawnor and Hema Finance is the pawnee.
A promise example: Imran agrees to complete a building job by a stated date, and gives the customer a valuable machine to hold as security for the performance of his promise. That too falls within the words "performance of a promise".
This article describes the Act's definition only. Loans against gold or other goods may also be affected by other laws and regulations, which are outside the source text; take advice about them.
What can the parties change?
Section 172 is a definition, so it does not use words about contrary contracts. The terms of the pledge (what is pledged, what is secured, when repayment is due) are set by the parties in their agreement. Several of the later sections allow the contract to vary their effect, and each states so in its own words; see the articles on section 174 and others in the series.
What the section does not say
- It does not say whether a pledge must be in writing.
- It does not say which goods may be pledged or their value.
- It does not describe the pawnee's duty of care; the general bailment rules, such as section 151, apply to the pawnee as a bailee.
- It does not deal with documents of title or pledge by agents; sections 178 and 178A do.
Practical points
- Write down exactly what is pledged, with a description and condition, and what debt or promise it secures.
- State the repayment date or the performance date, because later sections speak of default "at the stipulated time".
- Keep a signed receipt for the goods from the pawnee and one on return.
- For the difference between a pledge and other forms of security, see what is a charge: mortgage vs hypothecation vs pledge.
Need help drafting a pledge?
A pledge should state the goods, the secured debt or promise, the due date and what happens on default. Our agreement drafting team can draft the agreement against the Act's definition. Bring the loan or contract it will secure.
Key takeaways
- Pledge is the bailment of goods as security for payment of a debt or performance of a promise (s.172).
- The bailor is the pawnor and the bailee is the pawnee.
- A pledge is a bailment, so the general bailment rules apply alongside the pledge sections.
- The Act prints no illustration under section 172.
Read next
- Section 173: pawnee's right of retainer
- Section 174: pawnee not to retain for other debts and subsequent advances
- Section 171: general lien of bankers, factors, wharfingers, attorneys and policy-brokers
Disclaimer: Based on the text of the Indian Contract Act, 1872 as consulted on 1 October 2026. Many questions under this Act turn on case law and on the wording of the particular contract, which this article does not cover. It is general information, not legal advice; check the official text and take advice before acting.