A. M. AHMADI, J. ( 1 ) IT is distressing to find that the Motor Accident Claims Tribunal has foisted liability to pay compensation on the appellant Bank by a one line statement to the effect that the hypothecating Bank the Bank of Baroda Ahmedabad which also steps into the shoes of the owner is vicariously liable. Except this statement found in paragraph 9 of the judgment we do not find any discussion in support of the statement that the hypothecating Bank steps into the shoes of the owners of the vehicle by virtue of the fact that the offending vehicle was hypothecated with the Bank. It is indeed surprising that the learned Presiding Officer constituting the Tribunal did not think it necessary to examine the relationship between the owners of the vehicle and the Bank arising out of the agreement of hypothecation. Except the ipse dixit of the learned Presiding Officer that the hypothecating Bank steps into the shoes of the owners of the offending vehicle there is nothing in the entire judgment to indicate that the Presiding Officer made any effort to understand the jural relationship between the owners of the offending vehicle and the hypothecating Bank. We will immediately point out that this averment of the Tribunal is wholly unsustainable. ( 2 ) ON 10/02/1981 at about 6. 00 p. m. a passenger bus and a motor truck collided on the Morvi-Rajkot State Highway near culvert No. 1/59 at a short distance from village Shanala. The bus GTZ 1806 was proceeding towards Morvi with a marriage party and while it was crossing the culvert the motor truck GRS 5069 came from the opposite direction and simultaneously tried to cross the culvert in the process the two vehicles grazed each other causing injuries to some of the passengers of the bus. The injured preferred separate Claim Applications which were heard and disposed of by a common judgment. ( 3 ) THE Claims Tribunal came to the conclusion that the drivers of both the vehicles involved in the accident were guilty of want of care and caution and apportioned the liability at 25 per cent so far as the bus driver and 75 per cent so far as the truck driver were concerned. Holding them both jointly and severally liable for the accident the Claims Tribunal awarded compensation to the claimants. Holding them both jointly and severally liable for the accident the Claims Tribunal awarded compensation to the claimants. So far as the question of negligence of the vehicle drivers and the quantum of compensation are concerned the appellant does not dispute the same. ( 4 ) THE appellant Bank had advanced a loan to original Respondents Nos. 4 and 6 for purchasing the motor truck GRT 5069. The deed of hypothecation was executed by the owners respondents Nos. 4 and 6 in favour of the Bank. Under that agreement the vehicle in question was pledged with the Bank for due repayment of the loan advanced by the Bank. The vehicle remained in the possession of the owners and was plied by original respondent No. 8 as the driver engaged by the owners on the date of the accident. The question which therefore arises for consideration is whether the hypothecating Bank can be held vicariously liable to pay damages to the injured for the negligent act of the driver of the said vehicle. The Claims Tribunal has opined that the hypothecating Bank steps into the shoes of the owners and since the owners become vicariously liable for the tortious act of their servant the hypothecating Bank must also be held vicariously liable It may here be mentioned that the two owners of the vehicle have also been held vicariously liable for the tortious act of their driver along with the hypothecating Bank notwithstanding the fact that in the opinion of the Claims Tribunal the hypothecating Bank had stepped into the shoes of the owners. ( 5 ) IN order to determine whether the hypothecating Bank can be held vicariously liable for the tortious act of the truck driver it is necessary to understand the exact relationship between the Bank and the owners of the offending vehicle. The Bank had advanced a loan against the security of the offending vehicle under a deed of hypothecation executed by and between the parties. By that agreement the vehicle remained in the custody of the pawner and the possession thereof was never transferred to the pawnee. Unlike in the case of a pledge where the possession of the thing pawned is delivered to the pawnee in the case of hypothecation the possession of the chattel continues to remain with the pawner. By that agreement the vehicle remained in the custody of the pawner and the possession thereof was never transferred to the pawnee. Unlike in the case of a pledge where the possession of the thing pawned is delivered to the pawnee in the case of hypothecation the possession of the chattel continues to remain with the pawner. The jural relationship which comes into existence is therefore that of a creditor and a debtor. The only right which the hypothecating Bank has under the arrangement is to have the chattel sold for realising its dues. The title in the vehicle remains with the owners. The de jure and de facto possession also remains with the owners and the only right that the creditor Bank has is to recover the amount by the sale of the vehicle in the event of default. It is therefore difficult to understand how the Claims Tribunal came to the conclusion that the hypothecating Bank stepped into the shoes of the owners to foist the liability for payment of compensation on the Bank. ( 6 ) HYPOTHECATION according to Corpus Juris Secundum (Volume XLII) means a contract of mortgage or pledge in which the subject matter is not delivered into the possession of the pledgee or pawnee; or conversely a right which a creditor has over a thing belonging to another and which consists in a power to cause it to be sold in order to be paid his claim out of the proceeds. In paragraph 635 of Halsburys Laws of England (Fourth Edition) at page 438 the expression hypothecation of the cargo has been explained as a pledge of the cargo without immediate change of possession; it gives right to the person making advances on the faith of it to have the possession of the goods if the advances are not paid at the stipulated time; but it leaves to the owner of the goods hypothecated the power of making the repayment and thereby freeing them from the obligation. Boubiers Dictionary (Reprint 1983) describes hypothecation as a right which a creditor has over a thing belonging to another and which consists in a power to cause it to be sold in order to be paid his claim out of the proceeds. Boubiers Dictionary (Reprint 1983) describes hypothecation as a right which a creditor has over a thing belonging to another and which consists in a power to cause it to be sold in order to be paid his claim out of the proceeds. Venkataramaiyas Law Lexicon (Fifth Edition) Volume I page 568 explains hypothecation as under:"a pledge in which the pledgor retained possession of the thing pledged as security for a debt. . . It differs from a mortgage in that there is no actual or executory conveyance or assurance of the property hypothecated for payment of the debt or loan and from a pledge in that there is no actual or constructive delivery of the properly. Hypothecation is a mode of creating a security whereby not merely the ownership but also the possession of the thing remains with the owner". Thomsons Dictionary of Banking (Twelfth Edition) at page 309 Observes: In banking matters the term hypothecation is sometimes used to denote an agreement to give a charge over goods or documents of title thereto without conferring possession but undertaking to give a pledge when the goods or documents are to hand. It is not necessary to multiply by quoting from various other dictionaries or decided cases as it is sufficiently clear from what we have stated earlier that when a property is hypothecated with a creditor it is pledged as security or collateral for a debt without physical transfer thereof to the creditor. The title to the property does not pass to the creditor but the creditor has merely the right to sell the pawn upon default. In other words hypothecation is a transaction whereunder goods are made available as security for a debt without actual transfer of either the property or the possession thereof to the creditor. The owners are under an obligation to discharge the debt within the stipulated time and if they fail to do so the creditor has the right of re-entry for the limited purpose of re-payment of the loan. The title in the goods remains with the pledgor; the de jure and de facto possession continues to remain with him and the pledgee/creditor has merely the right to recover his dues if need be by the sale of the security that is the pawn. The title in the goods remains with the pledgor; the de jure and de facto possession continues to remain with him and the pledgee/creditor has merely the right to recover his dues if need be by the sale of the security that is the pawn. It is therefore difficult to understand how the Claims Tribunal took the view that the hypothecating Bank stepped into the shoes of the owners of the offending vehicle and was therefore vicariously liable to pay compensation to the victims of the accident. If the title to the property that is the vehicle remained with the owners and if the de jure as well as de facto possession remained with them they had the absolute control of the vehicle and at the relevant point of time when the accident occurred the vehicle was being driven by the driver employed by them. The hypothecating Bank a creditor had merely advanced a loan against the security of that vehicle and had special right to recover its dues in the event of default by if need be the sale of the vehicle. It had therefore no title over the vehicle. It was not even in constructive possession of the vehicle but it had merely a right to recover its dues by the sale of that vehicle. So long as there was no default in the payment of the loan amount it could not exercise that special right to sell the vehicle for realisation of its dues. Under the circumstances we feel that the view taken by the Claims Tribunal is contrary to law and ignores the elementary fact that under the agreement of hypothecation neither the title in the property nor the possession thereof stands transferred to the creditor Bank. The Claims Tribunal has betrayed total non-application of mind as regards the jural relationship which comes into existence on the hypothecation of the vehicle for securing the debt. We are therefore of the opinion that the Claims Tribunal committed a gross error in law in holding that the hypothecating Bank had stepped into the shoes of the owners for having advanced a loan against the security of the vehicle in question. ( 7 ) WE therefore allow these appeals and set aside the order of the Claims Tribunal insofar as it holds the appellant-Bank vicariously liable to answer judgment in the aforesaid Claims Applications. ( 7 ) WE therefore allow these appeals and set aside the order of the Claims Tribunal insofar as it holds the appellant-Bank vicariously liable to answer judgment in the aforesaid Claims Applications. We hold that the Bank is not liable to pay compensation to the victims of the. accident. We therefore direct that the Claim Applications against the Bank shall stand dismissed with no order as to costs throughout. (RJS) appeals allowed. .