As per the case facts, the appellant, a Non-Banking Finance Company, had advanced a loan to a company and the primary legal issue concerned the effect of the Depositories Act ... and its regulations on the provisions related to contracts of pledge under the Indian Contract Act and common law in India. The question arose whether the Depositories Act and its regulations override the pledge provisions of the Indian Contract Act and common law, specifically regarding the rights of a pawnee, the nature of pledge versus mortgage, and the validity of a pawnee selling pledged goods to themselves in the context of dematerialized shares. Finally, the Supreme Court allowed the appeal, setting aside the impugned order. It held that the transfer of dematerialized shares in favor of the pawnee as the 'beneficial owner' does not constitute a sale of shares by the pawnee. The pledge remains undischarged, and the pawnee is not required to account for sale proceeds until an 'actual sale' occurs. The two options available to the pawnee under Section 176 of the Contract Act (selling the pawn after reasonable notice or suing the pawnor for the debt while retaining the pawn as collateral security) are not exhausted. The Court emphasized that a pawnee has only a special right of possession, not general ownership, and unlike a mortgagee, the legal estate does not pass to the pawnee. It also clarified that the Contract Act does not contemplate the pawnee selling the pawn to themselves, and such a self-sale, if accepted, would be unlawful and amount to conversion, applicable even to dematerialized securities.