Distinguish between the following: Hypothecation and Pledge.

Distinguish between Hypothecation and Pledge Hypothecation is a form of transfer of property in goods. In hypothecation, there must be an intention of the parties to create a security on the property on which the money has been lent. A hypothecation not merely of moveable existing on the premises at the time also in respect of moveable which might be subsequently acquired and brought there, is valid though it is not governed by the Transfer of Property Act, 1882 or by the Indian Contract Act, 1872. An oral or written hypothecation is permitted under the law in India. Pledge has been defined by the Indian Contract Act, 1872. Under Section 172, a pledge is a bailment of the goods as security for payment of a debt or performance of a promise. Section 172 entitles a Pawnee to retain the goods pledged as security for payment of a debt and under Section 175 he is entitled to receive from the pawnor or the pledger any extra-ordinary expenses he incurs for the preservation of the goods pledged with him. Section 176 deals with the rights of a Pawnee and in case of default by the pawnor, the Pawnee has the right to sue upon the debt to retain the goods as collateral security and to sell the goods after reasonable notice of the intended sale to the pawnor. In hypothecation delivery of possession of goods is not essential. In pledge delivery of possession of goods is essential. As against pledge of goods, the transfer of legal title in the goods in the case of a hypothecation, the rights of the lender and the borrower are strictly governed by the terms and conditions of the hypothecation agreement executed by the parties.