LALLAN PRASAD vs RAHMAT ALI & ANR.

The Supreme Court held that under Section 176 of the Indian Contract Act, 1872, a pawnee has the right to sue for the debt and retain the pledged goods as collateral. However, if the pawnee denies the existence of the pledge and fails to offer to redeliver the goods, he cannot obtain a decree for the debt. The Court found that the appellant, having received the goods, could not claim the amount due under the promissory note while retaining the goods, thus upholding the High Court's decision to deny the appellant's claim.