Legal Question in Banking Law in India

Invocation of pledged shares

I would like to know whether a lender to whom shares have been pledged as security would become the owner of such shares after they are invoked by the lender for breach of the agreement. This aspect may be analysed particularly in respect of shares held in demat form


Asked on 2/25/09, 11:49 pm

3 Answers from Attorneys
Pranav Desai PD Legal & Associates

Re: Invocation of pledged shares

Irrespective of the form the lender can sell the pledged shares for recovery of money.

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Answered on 2/27/09, 12:54 pm
Sudershan Goel India Law Offices of Sudershan Goel - Advocate

Re: Invocation of pledged shares

The lender may be entitled to sell the pledged shares for recovery of his dues.

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Answered on 2/26/09, 10:33 am
J. Radhakrishnan independent Practice

Re: Invocation of pledged shares

whether the shares were in physical form or demat form, if they have been pledged, the pawnee/creditor i.e. the person to whom they are pledged has a special property in the same to sell the same by public auction or private sale, if default happens after issue of notice to the pledgor to pay up and redeem the shares. The creditor does not become owner automatically.

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Answered on 2/26/09, 7:52 pm


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