JUDGMENT : 1. The present Appeal from Order has been filed by the appellant – Finance Company (Original Defendant) challenging the legality and validity of the order dated 14.02.2013 passed by the learned Principal Senior Civil Judge, Nadiad upon Exh.-5 application in Regular Civil Suit No.71 of 2011, whereby the learned Principal Civil Judge was pleased to allow the application Exh.-5 filed by the respondent herein (Original Plaintiff) directing the appellant herein not to take the possession of the disputed motor truck of the respondent till the final disposal of the suit. 2. The brief facts leading to the present Appeal from order are that the appellant – Finance Company is a Limited Company registered under the Companies Act and doing the business of providing finance and had entered into loan-cum-hypothecation agreement with the respondent herein who had taken loan from the appellant herein by an agreement No.NADIAD00053/002 dated 31.05.2010 for purchasing the vehicle bearing Registration No.GJ-7-Y-6697 and it was agreed by the respondent that he shall pay one installment of Rs.11,454/- and 36 installments of Rs.10,454/-. The said loan was required to be paid in 36 installments. According to the appellant, the respondent has not paid the installments regularly. There was default on the part of the respondent and therefore, he filed a suit before the trial court. 3. In support of the case, learned advocate for the appellant finance company has contended that trial court has not properly appreciated the facts and pleadings that the vehicle purchased by the plaintiff by taking vehicle loan from the defendants i.e. appellants herein and entered into an agreement and also agreed with the terms and conditions of the same. It is also contended that the trial court has erred in coming to the conclusion that the defendants cannot take possession of the vehicle when the plaintiff failed to make the payment since long. It is further contended that the defendants have appeared and have filed their reply along with the relevant documents and also drawn the attention of the trial court regarding condition of arbitration when dispute has been arise. It is also contended that the trial court has not considered the contention taken by the appellant in their reply to injunction application and also stated that the plaintiff has made payment of Rs.30,500/- only and has failed to make the payment of installments as per the agreement clause and conditions. It is also contended that the trial court has not considered the contention taken by the appellant in their reply to injunction application and also stated that the plaintiff has made payment of Rs.30,500/- only and has failed to make the payment of installments as per the agreement clause and conditions. It is also contended that the plaintiff has suppressed material facts and has not come before the court with clean hands and when there is arbitration clause, the court has no jurisdiction, however, the trial court has not considered the said fact. It is also contended that the trial court has stated that the order remain in force till final disposal or any new order under the settlement procedure before the arbitration court or the compromise as per the willful settlement before this court during the Lok-adalat and the defendants are prevented to seize the vehicle forcefully without any due procedure of law and without permission of any competent court or without the order of this court in future during pendency of the suit or arbitration proceedings. It is lastly contended that without making regular payment of the installments, how such kind of injunction may be granted when the plaintiff has already entered into agreement for purchase of vehicle and get an amount and purchased the vehicle and using the same and by using the vehicle, they are gaining an amount, but the said aspect has not been dealt with by the trial court. 4. Heard learned advocate for the appellant – Finance Company at length through video conferencing. Though served, the respondent No.1 has chosen not to appear. 5. It appears from the record that the trial court has observed that the plaintiff has challenged the loan account and the illegal penal interest and it has also observed that the defendant has not tried to submit the specific amount recoverable without the penal interest and regular charges are required to be settled at the plaintiff's end. So on that ground, the disputed property was required to be protected as per the view of the trial court. 6. So on that ground, the disputed property was required to be protected as per the view of the trial court. 6. It also appears from the loan-cum-hypothecation agreement that, if the borrower fails to make payment of any part of the loan amount or any other rate or charge due and payable under the contract, it should be considered as default as per the Clause 6(b) of the said agreement, which reads as under : “Responsibility of Asset :To take possession of the hypothecated assets from wheresoever it may be and remove the hypothecated asset including all accessories, bodywork and fittings and for the said purpose, it shall be lawful for Shriram or Shriram authorized representatives, servants, officers and agents forthwith or at any time and without notice to the Borrower(s) to enter upon the premises, or garage or godown where the hypothecated assets shall be lying or kept and to take possession or recover or receive the same and if necessary to break open such place of storage; Shriram will be within its rights to use a tow-van to carry away the assets. Any damage to the land or building caused by removal or the asset shall be the sole responsibility of the Borrower(s).” 7. The trial court has not considered this clause of the agreement. The trial court has also not observed that the respondent plaintiff has to pay regular EMIs as agreed between the parties and there is nothing on record that the plaintiff has any financial capacity to fulfill the liability of the present appellant. The trial court has not ensured that if the injunction is granted and the vehicle is used by the respondent, the market price of the vehicle would come down day by day, the appellant would be at financial loss. The trial court has failed to establish that there is balance of convenience in his favour. The trial court has also failed to consider the irreparable loss which cannot be compensated in terms of money. 8. A perusal of clauses 5 and 6 of the hypothecation deed, Ex. 21/1, discloses that the hypothecatee has got a right to take possession of the hypothecated movable property and also a right to appoint a receiver to manage the properties and to sell the same by public auction or private contract for realisation of the amount advanced. 8. A perusal of clauses 5 and 6 of the hypothecation deed, Ex. 21/1, discloses that the hypothecatee has got a right to take possession of the hypothecated movable property and also a right to appoint a receiver to manage the properties and to sell the same by public auction or private contract for realisation of the amount advanced. The appellant is, thus, clothed with the power to take possession of the hypothecated property and to appoint a receiver and to sell the same whenever there is default. 8.1 Now, the question to be considered is; whether the hypothecates appellant has set a right to take possession of the hypothecated goods and sell the same without intervention of the Court or not. 8.2 Now let us notice the distinction between 'Mortgage', 'Pledge' and 'Hypothecation'. 8.3 Section 58 of the Transfer of Property Act, 1882, defines 'Mortgage' as under : "58. 'Mortgage', 'mortgagor’, 'mortgagee', 'mortgage-money' and 'mortgage-deed' defined-- (a) A mortgage is the transfer of an interest in specific immov-eable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being are called the mortgage-money and the instrument (if any), by which the transfer is effected is called a mortgage-deed. ..... ..... 8.4 Thus it can be seen that Section 58 of the Transfer of Property Act not only defines the mortgage but also provides for mortgage of immovable property, besides different kinds of mortgages viz., simple mortgage, mortgage by conditional sale, usufructuary mortgage, English mortgage, mortgage by deposit of title deeds and anomalous mortgage. The mortgage as per Section 58 of the Transfer of Property Act deals with transfer of interest in immovable property as security for the loan advanced, or to be advanced. 8.5 Section 172 of the Contract Act defines pledge as, under: "172. "Pledge", "Pawnor" and "Pawnee" defined- 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 "pawner". The bailee is called the "pawnee". 8.5 Section 172 of the Contract Act defines pledge as, under: "172. "Pledge", "Pawnor" and "Pawnee" defined- 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 "pawner". The bailee is called the "pawnee". In the case of pledge, the possession of pledged goods will be passed on to the pawnee from the pawnor, and the possession of moveables will be transferred to the pawnee and he will be in possession and the pawnor will not be able to enjoy the same as the possession has already been parted with the goods. So, pledge deals with transfer of possession of moveable property to the creditor as security to the loan advanced. 8.6 Hypothecation is not a statutory creation but it is in usage in mercantile field since times immemorial. The hypothecation is neither governed by any statute nor there is any law governing the same directly or indirectly. Therefore, Courts have to consider hypothecated cases purely on general conditions of the contract as per the terms of the hypothecation agreement. As there is no provision in the Contract Act regarding hypothecation nor in the Sale of Goods Act, let us find out, what the meaning of hypothecation is? It is also relevant to know what is the difference between 'pledge' and 'hypothecation'. 8.7 Hypothecation is understood in mercantile world as creation of charge on movables in favour of hypothecatee by hypothecator where possession of goods will remain with the hypothecator. Thus, the hypothecator can be in possession of goods hypothecated and enjoy the same without causing any damage to the rights of the hypothecatee. 8.8 Thus, to sum up, the distinction between pledge and hypothecation is, that in case of hypothecation the hypothecator can be in possession of the goods hypothecated and enjoy the same without causing any damage to the rights of the hypothecatee whereas in the case of pledge the possession of movables will be transferred to the pawnee and he will be in possession and the pawner will not be able to enjoy the same as the possession has already been parted with. 9. In this context it is relevant to refer to the following decisions. 9. In this context it is relevant to refer to the following decisions. 9.1 In Haripada v. Anatha Nath, AIR 1918 Cal 165, it was held by a Division Bench of the Calcutta High Court as under: "The method provided by Sec. 172, by the hypothecation of loose chattels is not only the method for creating security thereon. They may be hypothecated without transferring their possession. In such cases the only question that arises is whether there was an intention to create a security and if there was an intention to create a security, equity gives effect to it." Thus, it can be seen that apart from the pledge, security can be created on the loose chattels. 9.2 While considering the question whether a non-possessory hypothecation of movables is a valid contract or not, the Nagpur Judicial Commissioner's Court in Nanhuji v. Chimna, (1911) 10 Ind Cas 869, held as under: "Neither the Transfer of Property Act nor the Indian Contract Act recognise the non-possessory hypothecation of moveables. The rights and remedies of the parties to such a transaction must be regulated by the Courts according to general law of contract, subject to those principles of justice, equity and good conscience, governing Courts in this country under the authority of the highest tribunal. A non-possessory hypothecation of moveables is a valid contract and should be recongised and enforced by the Courts. The rights of the hypothecatee are entirely regulated by the terms of the contract between the parties. On default in payment of the debt, he can compel delivery of the property or obtain a decree for sale of the property, if so stipulated in the contract. If the property is simply hypothecated without any stipulation as to the manner in which it is to be dealt with, the only remedy open to the creditor is to obtain a money-decree declaring his lien on the property and his right to sell." 9.3 In Co-operative Hindusthan Bank v. Surendra Nath, AIR 1932 Cal 524, it was held that a hypothecation of movables, though not accompanied by delivery of possession, is valid. Creation of a charge on future crop to be produced, which is a movable property, was recognised as permissible under the Indian Law. Creation of a charge on future crop to be produced, which is a movable property, was recognised as permissible under the Indian Law. 9.4 In Venkatachalam v. Venkatrami, AIR 1940 Mad 929 , a Division Bench of the Madras High Court held as follows: "Under the Indian Law there can be a valid mortgage of moveable property. Under Section 3, T. P. Act, immoveable property does not include growing crops. Therefore a deed of mortgage of immoveable property and also of the produce realised therefrom every year operates in respect of the produce on the land as a mortgage of moveable property. The moment the crop comes into existence the mortgagee gets title to the crop." 9.5 In Simla Banking Etc. Co. v. M/s. Pritams, , while making a distinction between pledge and hypothecation, a Division Bench of the Punjab High Court held as follows (AIR 1960 P.H. 42): "The civil law recognises two kinds of pledges, viz., the "pignus" (pawn) in which the possession of the thing is actually delivered to the person for whose benefit the pledge was made, and "hypotheca" (hypothecation) in which the possession of the thing pledged remained with the debtor, the obligation resting in mere contract without delivery. In one case possession was actually delivered to the creditor or pawnee, in the other it remained with the debtor. Hypothecation has been defined as a right which a creditor has over a thing belonging to another, and which consists in the power to cause it to be sold in order to be paid his claims out of the proceeds. It is an act of pledging a thing as security for a debt or demand without parting with the possession. It follows as a consequence that although the property remains in the possession of the debtor, it cannot be transferred to a third party without the express consent or permission of the creditor.'' 9.6 In Nadar Bank Ltd. v. Canara Bank Ltd., a Division Bench of Madras High Court held as follows [ AIR 1961 Mad 326 ] : "In order to constitute a valid pledge, what is essential is that there must be a delivery of the article, either actual or constructive, to the pawnee. Possession is an equivocal term; it may mean either mere manual possession, or the mere right to possession. Possession is an equivocal term; it may mean either mere manual possession, or the mere right to possession. Constructive delivery is adequate to constitute a pledge and it applies to all those cases where the pledger remains in possession of the goods under the specific authority of the pledgee. There cannot be any rigid delimitation of the purpose for which the pledger is permitted to retain possession of the goods. The essential test is not the purpose, but whether the dominion over the goods of the pledgee is retained, and the physical possession or handling of the goods by the pledger is under the delegated authority of the pledgee, or is independent. (English case law referred). The borrower delivered goods to the bank as security for the payment of loan. Under the agreement the borrower was, with the previous consent of the bank, at liberty from time to time to withdraw any goods pledged to the bank provided the advance value of the said goods was paid or a margin of 40 per cent on the value of the goods was maintained. The borrower was to furnish statements and returns to the bank of the current market value and other particulars of the goods left with him as the bank might require from time to time. The goods were also insured by the borrower in favour of the Bank. Held that this was a case of pledge of goods to the bank and not a mere hypothecation of moveables. The form of the juridical relationship was very important, and it could not be divorced from the substance, merely because in mercantile practice, there was a certain flexibility and freedom for the borrower under the "open credit" system. Held that this was a case of pledge of goods to the bank and not a mere hypothecation of moveables. The form of the juridical relationship was very important, and it could not be divorced from the substance, merely because in mercantile practice, there was a certain flexibility and freedom for the borrower under the "open credit" system. The term of condition that even for dealing with the goods, the prior consent of the creditor bank was necessary insured the constructive possession as well as the character of pledge." 9.7 Dealing with the question whether a creditor is entitled to retain possession and can exercise right of private sale without intervention of Court, the High Court of Mysore in Re, S.Y.C.W. and S. Mills, AIR 1969 Mys 280, held as follows: "In the case of hypothecation or pledge of moveable goods, there is no doubt about the creditor's right to take possession, to retain possession and to sell the goods directly without the intervention of Court for the purpose of recovering his dues. Hypothecation is only extended idea of a pledge, the creditor permitting the debtor to retain possession either on behalf of or in trust for himself (the creditor). Hence so far as the moveables actually covered by the hypothecation deeds are concerned, there can be no doubt that the Bank is entitled to retain possession and also to exercise the right of private sale." 9.8 While approving the aforesaid decision of the High Court of Mysore (AIR 1969 Mys 280) (supra), the Court in Jayant T. Shah v. Andhra Bank Ltd., (1977) 2 Andh WR (HC) 129) observed as under: "There is a distinction between "Hypothecation" and "Pledge". In the Indian Contract Act (9th editfon) by Pollock and Mulla' at page 688, the difference between 'hypothecation' and 'pledge' is neatly stated: 'In hypothecation the possession of the property is restrained by the owner and certain rights in that moveable property are transferred to the person in whose favour the property is hypothecated. But in a pledge the possession of goods also passes to the pledgee by way of security though the possession may be constructive. But in a pledge the possession of goods also passes to the pledgee by way of security though the possession may be constructive. The true distinction from hypothecation is that the constructive possession of the goods in the case of pledge is specifically secured by the terms of the contract and is continued unabated throughout." It is not disputed that in the case of hypothecation, the creditor has the right to take possession of the goods and to sell it without the intervention of the Court. But the question is whether it is a security within the meaning of Sec. 141 of the Contract Act so that if the creditor were to lose or part with the goods given in security, to that extent the surety is discharged." 9.9 In M/s. Gopal Singh v. Punjab National Bank, a distinction between pledge and hypothecation of goods with the Bank has been made. While construing that the hypothecated goods are not only constructive but actually in the possession of the Bank and the borrower has actual physical possession of the goods as an agent, the Delhi High Court observed as under (AIR 1976 Delhi 115): "A reference to Ex. D1 / 7 leaves no manner of doubt as to the terms and conditions incorporated in it. This agreement partakes the character of the usual document drawn between the bank and the borrower during the material period and, inter alia, provides for the pledge of goods by way of security for the amount to be advanced by the bank from time to time, the margin that must be maintained between the value of the goods and the amount of drawing, the manner in which the goods must remain under the lock and key of the bank through the godown-keeper, the liability of the borrower to submit reports with regard to the additions and withdrawls from the stocks pledged with the bank to enable the bank to verify through its godown-keeper. It must, however, be pointed out that in case of pledged goods, the goods are stored in the godown under the lock and key of the bank under the supervision of the bank's godown-keeper and the goods are undoubtedly in the possession, physical and otherwise, of the bank and no withdrawals or additions of the stocks are permissible without their permission. The position with regard to hypothecatedgoods is, however, different because these goods are strictly speaking not under the lock and key of the bank but are allowed to be kept at the factory or the premises of the borrower without any lock and key of the bank as such, but are supposed to be under the constructive possession of the bank by virtue of the deed of hypothecation which obliges the borrower to submit a regular return to the bank indicating the increase and decrease in the value of the said goods to enable the bank from time to time to determine the drawing of the borrower with regard to it. In law, however, there is no difference with regard to the legal possession of the bank. In both the cases, the goods are under the constructive possession of the bank while in the case of pledge they are also in the actual physical possession of the bank but in the case of hypothecated goods, they arc in the actual physical possession of the borrower but subject to the restriction mentioned above. In a sense, the borrower in the case of hypothecated goods has actual physical possession of the goods as an agent, as it were, of the bank and in the limited sense the hypothecated goods are also not only constructive but actually in the possession of the bank." 9.10 While holding that in the case of hypothecation possession remains with the hypothecator but the hypothecatee has a right to take possession of the hypothecated property and to sell it for realisation of the debt secured by it, in the decision in Syndicate Bank v. Official Liquidator, , it was held as follows (AIR 1985 Delhi 256): "Unlike a mortgage, a pledge or hypothecation does not have the effect of transferring any interest" in the property in favour of the pledgee or the hypothecatee. The pledge and hypothecation, however, create a special property in the goods in favour of the pledgee or the hypothecatee. In the case of pledge, the special property is to keep possession of the pledged goods and to dispose them of for the realisation of the debts for which it is held as security. The pledge and hypothecation, however, create a special property in the goods in favour of the pledgee or the hypothecatee. In the case of pledge, the special property is to keep possession of the pledged goods and to dispose them of for the realisation of the debts for which it is held as security. In the case of hypothecation, possession remains with the hypothecator but the hypothecatee has the right to lake possession of the hypothecated property and to sell it for the realisation of the debt secured by hypo-thecation. It was open to the Bank to take possession of the hypothecated property on its own or through the Court, but it failed to do so. It was also open to the Bank to enforce the security by the suit that it filed but there again the Bank chose to seek a simple money decree. Mere mention of hypothecation in the suit was not sufficient. The Bank would, therefore, be deemed to have waived its right as hypothecatee and was satisfied with a simple money decree. The Bank having filed a suit for the recovery of money and having failed to make a claim on the security, any claim on the security or the sale proceeds thereof would now be barred under Order 2, Rule 2 of the Code with the result that the Bank has no subsisting claim on the machinery or any part of the sale proceeds thereof and must rank as an unsecured creditor along with the other creditors of the Company, and prove its claim before the official liquidator at the appropriate time. The Bank is itself to blame for the course that it chose to adopt." 9.11 While dealing with the question whether hypothecation amounts to constructive possession or not, while approving the decision of the High Court of Mysore, (AIR 1969 Mysore 280) (supra), a Division Bench of the Andhra Pradesh High Court in State v. Andhra Bank Ltd., observed as under ( AIR 1988 A.P. 18 ) : "The next aspect that is to be considered is whether such a transaction viz., a hypothecation can be recognised as valid as to conferring rights though not provided for in the statutes. The rules of common law relating to substantive rights have been recognised and adopted and enforced by judicial decisions and treated to be 'law in force' in the country within the meaning of Art. 372(1) of the Constitution of India. In Builders Supply Corporation v. Union of India, their Lordships considered the concept of 'law in force' as contained in Art. 372(1) of the Constitution and laid down this principle.” 9.12 It is fairly well settled that there are various forms of mortgage recognised by courts though there may not be statutory recognition. In Tehilram v. D' Mello, AIR 1916 Bom 77 at page 80 it is held-thus: 'In the statute law of India it would be difficult to find anything making it imperative upon courts to acknowledge any such doctrine. In the 3rd Section of Transfer of Property Act, amongst other definitions, the definition of a chose in action mentions the hypothecation of moveables as though that were an accepted part of the law of this country, and again, in the Stamp Act Section 2, Cl. 7, the like words are to be found. Elsewhere I do not believe that it would be easy to discover in the sufficiently voluminous statute law of this country any warrant for the assertion that the courts of India are bound to recognise a mortgage of moveables. Nor after having considered the case law, both of this country and England which has gone to establish that doctrine, very carefully and critically for many years, am I able to discover any authority, in reason or equity, adequate to establish it. Nor after having considered the case law, both of this country and England which has gone to establish that doctrine, very carefully and critically for many years, am I able to discover any authority, in reason or equity, adequate to establish it. If, however, it is to be taken as a part of the law of India, and in the existing state of the case-law, I suppose it must be, then it is very necessary to examine the essential ingredients of the mortgage of moveables and so arrive at a clear understanding not only of the nature of the legal notion but of all its legal consequences in relation to others." The Division Bench further held as under: "Where a suit was filed by the Bank against a Sugar Mill for recovery of cash credit amount advanced on hypothecation of stock of sugar in the godown of the mill, but before a decree could be passed the stock of sugar was attached on behalf of State for recovery of sugarcane purchase tax, it was held that the transaction being a hypothecation, the hypo-thecatee, viz., the Bank had a lien on the goods which were held by way of security and the bank had a preferential claim as a secured creditor even against the Government's demand of taxes. It is true the hypothecation as such is not defined in the Contract Act and there is no provision dealing with such a transaction. But the difference between "Hypothecation" and "Pledge" is that in hypothecation the possession of the property is retained by the owner and certain rights in that moveable property are transferred to the person in whose favour of the property is hypothecated. But in a pledge the possession of goods also passes to the pledgees by way of security though the possession may be constructive. The true distinction between pledge and hypothecation is that the constructive possession of the goods in the case of pledge is specifically secured by the terms of the contract and is continued unabated throughout. The hypothecation of moveable property is also a recognised form of mortgage. Hence, it has to be recognised although such hypothecation or mortgage of moveables are not specifically dealt with in the Contract Act, but these transactions have long been recognised as valid in law and they have to be given effect to. The hypothecation of moveable property is also a recognised form of mortgage. Hence, it has to be recognised although such hypothecation or mortgage of moveables are not specifically dealt with in the Contract Act, but these transactions have long been recognised as valid in law and they have to be given effect to. In the absene of specific rules, the recognised principles in the Civil Courts is . that courts should decide according to justice, equity and goods conscience which is underlying recognised principle of common law courts." 9.13 In Union of India v. CT. Shentila-nathan (1978) 48 Com Cas 640 a Division Bench of Madras High Court held: "Hypothecation of goods is a concept which is not expressly provided for in the law of contracts, but is accepted in the law merchant by long usage and practice. Hypothecation is not a pledge and there is no transfer of interest or property in the goods by the hypothecator to the hypothecatee. It only creates a notional and an equitable charge in favour of the hypothecatee and the right of the hypothecatee, as already stated, is only to sue on the debt and proceed in execution against the hypothecated goods, if they are available. As delivery of possession is not a sine qua non for the creation of a notional charge under a deed of hypothecation and as possession of the hypotecated goods is always with the hypothecator, a wide door is open to the owner to deal with the goods without reference to the hypothecantee. If, however, the hypothecator, contrary to the stipulation under the hypothecation bond, deals with the property, the breach on his part would certainly be noticed by the hypothecatee and he would be dealt with independently by him. It is in this context that the rights of a bona fide transferee for value of such goods are protected in law, for, the hypothecatee who fails to bequester the goods and reduced them into his custody, takes the risk of such clandestine dealings of the hypothecator. If the hypothecatee expressly or constructively notifies the equitable charge, matters would be different; even so, when the hypothecatee has constructive possession of the goods, though not phyiscal possession of the same. If the hypothecatee expressly or constructively notifies the equitable charge, matters would be different; even so, when the hypothecatee has constructive possession of the goods, though not phyiscal possession of the same. In the absence of such a constructive notice or express notice to the public at large, the right of the hypothecatee is that of a bare private money-creditor with the ancillary right to proceed against the goods hypothecated after obtaining a decree in a court of law. Thus, a hypothecation is a right in creditor over a thing belonging to another and which consists in the power in him to cause the goods to be sold in order that his debt might be paid to him from the sale proceeds and this right is distinguishable from a mortgage of chattels." 9.14 The rights of a mortgagee of movable property are not in any way inferior to the rights of a pledgee because the mortgagee has the general interest in the property which is mortgaged to him. In Ahmed Alimohomed Khoja, in Re AIR 1932 Bom 613 wherein Kania, J. of the Bombay High Court relying on the judgment in Deverges v. Sandeman, Clark & Co. (1902) 1 Ch 579, held: "Where the mortgagee is in fact in possession of the mortgaged property, without any objection from the mortgagors, the mortgagee has on the mortgagor's insolvency a right to sell the property without the intervention of the Court. The rights of a mortgagee of moveable property are not in any way inferior to the rights of a pledgee because the mortgagee has the general estate in the property which is mortgaged to him. Besides, he has the right to sell the property without the intervention of the Court if the mortgagor, after a proper notice is given to-him to repay the money, fails to do so."- 9.15 From the aforesaid decisions it is clear that pledge and hypothecation are two different transactions -- in the former possession of goods is parted with by the owner in favour of the creditor, whereas in the latter, possession of goods is retained by the borrower. 10. 10. From the aforesaid decisions, the following points will also emerge: (1) So far as the moveables actually covered by the hypotehcation deeds are concerned, there can be no doubt that the Bank is entitled to retain possession and also to exercise the right of private sale as hypothecation is only extended idea of a pledge, the creditor permitting the debtor to retain possession either on behalf of or in trust for himself (the creditor). (2) According to the deed of hypothecation the borrower is in actual physical possession whereas the constructive possession is still with the hypothecator. (3) In the case of pledge, the special feature is to the possession of the pledged goods with the pledgee and to dispose them of for the realisation of the debt for which it is held as security. In the case of hypothecation, possession remains with the hypotehcator but the hypothecatee has the right to take possession of the hypothecated property and to sell it for the realisation of the debt secured by hypothecation. It is open to the appellant to take possession of the hypothecated property on its own or through the court as per the terms of hypothecation. 11. Now, it is relevant to refer to some of the rulings and judgments of the foreign Courts. 11.1 In England earlier to 1882 hypothecation and pledge were on the same lines as in India, to say the practice prevailing in England earlier to 1882 was followed in India and the judgments were also followed. The hypothecated property was brought to sale through a Court or where there was a right to take possession as per the clauses of the agreement, possession of the same was taken from the hypothecator and was sold for realisation of the borrowed amounts. Therefore, there arose a necessity to lay down the norms as to when the property can be taken. Therefore, there arose a necessity to lay down the norms as to when the property can be taken. Therefore, the Bills of Sale Act, 1878 was enacted and it was further amended in the year 1882 by providing Section 7, which is as under: "Section 7: "Personal chattels assigned under a bill of sale shall not be liable to be seized or taken possession of by the grantee for any other than the following causes:-- "(1) If the grantor shall make default, in payment of the sum or sums of money thereby secured at the time therein provided for payment, or in the performance of any covenant or agreement contained in the bill of sale and necessary for maintaining the security; (2) If the grantor shall become a bankrupt, or suffer the said goods or any of them to be distrained for rent, rates, or taxes; (3) If the grantor shall fraudulently either remove of suffer the said goods, or any of them, to be removed from the premises; (4) If the grantor shall not without reasonable excuse, upon demand in writing by the grantee, produce to him his last receipts for rent, rates and taxes; (5) If execution shall have been levied against the goods of the grantor under any judgment at law; Provided that the grantor may within five days from the seizure or taking possession of any "chattels on account of any of the above mentioned causes, apply to the High Court or to a judge thereof in chambers, and such court or judge, if satisfied that by payment of money or otherwise the said cause of seizure no longer exists may restrain the grantee from removing or selling the said chattels, or may make such other order as may deem just." Thus the conditions, under which the personal chattels assigned under the bill can be seized or taken possession under certain specified contingencies. Thus, the right to take possession or seize the goods hypothecated to hypothecator in the event of default in payment of the amount due as per the agreement, was well recognised in England.” 11.2 In Watkins v. Evans (1887) 18 QBD 386 a Bill of Sale, given as security for money, was in the form set forth in the schedule to the Bills of Sale Act, 1882, except that, the mortgage debt (instead of being made payable by installments) was made payable, with interest, in one sum, a month after the date of the deed, and there was a covenant by the grantor, in case the principal money should not be then paid, to pay interest half-yearly on the principal money remaining unpaid. There was also a covenant by the grantor to insure the chattels comprised in the deed, and to produce the receipts for premium to the grantee. Therein it was held as follows: "The bill of sale was valid, and that, interest being in arrear for more than two months, the grantee had power to seize the chatties, and to sell them after the expiration of five days from the seizure. Per Bowen and Fry. L. JJ. The power of sale was conferred by S: 19 of the Conveyancing Act, 1881, subject to the restrictions imposed by S. 20 of that Act and by S. 13 of the Bills Sale Act of 1882. Per Lord Esher, M.R. ,the Conveyancing Act did not apply, but there was an implied power to seize and sell under the Act of 1882. A bill of sale given as security for money, by which the mortage debt is made payable in one entire sum, is "in accordance with" the statutory form". Per Lord Esher, M.R. ,the Conveyancing Act did not apply, but there was an implied power to seize and sell under the Act of 1882. A bill of sale given as security for money, by which the mortage debt is made payable in one entire sum, is "in accordance with" the statutory form". 11.3 In Ex Parte Official Receiver v. In Re Morritt (1886) 18 BBD 222 a Bill of Sale of personal chattels, given as security for money lent, contained a provision : "that the power of sale conferred on the mortgagees by the Conveyancing Act, 1881, shall be exercisable by them in every respect as if the 20th Section of the said Act had not been enacted." 11.4 Effect of the clause 'for possession till default' as incorporated in the mortgage deed has been analysed in Coote's Law of Mortgages, VIII Edition, Volume I at page 182 and is to operate as a redemise by the mortgagee, who cannot sue for the chattels until default has been made or the expiration of the time for payment; and the mortgagor may maintain an action if his possession is interfered Within the interval. But the mortgagor is only entitled to the use of the chattels; if he or his trustee in bankruptcy sell them during the term, it will be a disclaimer of the tenancy, and the mortgagee or his assignees can sue for the conversion. 11.5 The proviso for the mortgagor to retain possession until default is not inconsistent with a proviso for taking possession on the happening of a certain event. [Re Francis (1878) 10 Ch D 408 CA]. 11.6 It is, however, now settled that the right of seizure and of sale are derived not from the general law but exclusively from the Bills of Sale Act, 1882. (Vide the Law of Mortgages by C.H.M. Waldock at page 101). 11.7 The mortgagee of personal chattels, if they are in his possession, and in any case the mortgagee of stocks and shares has a power of sale implied at common law. When the mortgage is by deed the common law power is displaced by the power given by Section 101 of the L.P.A., but the implied power is still serviceable when there is no deed. If the mortgage fixed a day for payment, the implied power is exercisable immediately after default on that date. When the mortgage is by deed the common law power is displaced by the power given by Section 101 of the L.P.A., but the implied power is still serviceable when there is no deed. If the mortgage fixed a day for payment, the implied power is exercisable immediately after default on that date. (Vide The Law of Mortgages by C.H.M. Waldock, Second Edition, page 259). 11.8 A creditor will some times have a right to seize his debtor's chattels, usually with the added power to sell the chattels for the satisfaction of his debt. (Vide The Law of Mortgages by C.H.M. Waldock, Second Edition, page 12). 11.9 In England the powers of seizure and sale of hypothecated chattels are governed by the provisions of the Bills of Sale Act, 1882, whereas, in India, the same is governed by the terms and conditions of the contract entered into between the parties, as was in vogue in England in common law earlier to enactment of Bills of Sale Act, 1882. 11.10 Thus, from the foregoing decisions and the principles laid down therein, it is clear that the Intervention of the Court is not necessary and compulsory for enjoyment of a rights and the intervention of Court arises only when there is an infringement of right, and when there is no infringement, there is no lis and no suit. In the hypothecation agreement, the rights of the hypothecates are governed by the terms of the agreement. Where the goods are hypothecated only by creating a charge, then the hypothecatee has to take action to enforce the said charge according to law. Therefore, it cannot be said that the hypothecatee has to approach the Court even though the deed provides for taking of possession in case of default of the hypothecator. If there is any violation of the terms of the deed it will not, however, bar the hypothecator to approach the Court and seek proper relief. 11.11 A mortgage is not less than a pledge. Hypothecation is not defined in any statute. It has been in vogue in mercantile field. The same has been interpreted by the Courts in India as well as in foreign countries as referred to supra. Thus, a distinction has also been brought out between pledge and hypothecation. 11.11 A mortgage is not less than a pledge. Hypothecation is not defined in any statute. It has been in vogue in mercantile field. The same has been interpreted by the Courts in India as well as in foreign countries as referred to supra. Thus, a distinction has also been brought out between pledge and hypothecation. In the circumstances, the decisions, relied upon by the learned single Judge in Jayant T. Shah v. The Andhra Bank Limited (1977 (2) Andh WR (HC) 129) (supra) and Ahmed Ali Mohomed Khoja, in Re (AIR 1932 Bombay 613) (supra) have not been properly analysed and inasmuch as the Maritime laws are totally different from other laws all over the world, reliance placed by the learned single Judge on paragraph 635 of Volme 43 of Halsbury's Laws of England (4th Edition) is of no consequence. 11.12 A notice as contemplated under Section 176 of the Contract Act, 1872 has to be issued by the appellant-Bank before the sale of the lorry. In Prabhat Bank v. Babu Ram ( AIR 1966 All 134 ) wherein it was held: "An agreement under which the pawnee bank has been authorised to sell the securities pledged with it without notice to the pawner in case the credit balance of the pawner fell below the margin, cannot avail the pawnee in acting contrary to law. Such an agreement would be inconsistent with the provisions of the Contract Act, and therefore, would be wholly void and unenforceable. Consequently, the sale of the securities by the pawnee bank without giving reasonable notice to the pawner is bad and not binding on him. What Section 176 contemplates is not merely a notice but a reasonable notice, of intended sale of the security by the creditor within a certain date so as to afford an opportunity to the debtor to pay up the amount within the time mentioned in the notice." 12. So it can be deduced from the principle laid down by the aforesaid decisions is that where there is a mere charge in hypothecation agreement, the hypothecatee has to approach the Court and seek intervention of the Court for obtaining money decree and for bringing the hypothecated goods for sale through the Court. So it can be deduced from the principle laid down by the aforesaid decisions is that where there is a mere charge in hypothecation agreement, the hypothecatee has to approach the Court and seek intervention of the Court for obtaining money decree and for bringing the hypothecated goods for sale through the Court. But when there is any specific clause in the hypothecation agreement empowering the hypothecatee to take possession of the goods and sell the same, in the event of default in payment, as per the said terms the hypothecatee can proceed ahead without intervention of the Court. 13. Under the circumstances, I am of the view that the order passed by the trial court cannot sustain in the eyes of law and required to be quashed and set aside. 14. The learned advocate for the appellant has contended at this stage that they would obtain the possession in accordance with law. 15. As a result, the present appeal is allowed. The impugned order dated 14.02.2013 passed by the learned Principal Senior Civil Judge, Nadiad upon Exh.-5 application in Regular Civil Suit No.71 of 2011 is hereby quashed and set aside.