Hire-Purchase
Agreement
THIS
AGREEMENT is made at... this... day of... between M/s. XYZ & Co. Ltd., a
Company having registered office at... hereinafter referred to as 'the Company'
of the One Part and Mr.... of... hereinafter referred to as 'the Hirer' of the
Other Part.
WHEREAS
the Company is the owner of certain machinery and equipment intended for
manufacturing........ and which is more particularly described In the Schedule
hereunder written.
AND
WHEREAS the Hirer has requested the Company to give the said machinery and
equipment on hire to enable the Hirer to carry on the business of
manufacturing... with an option to the Hirer to purchase the same.
AND
WHEREAS the Company has agreed to do so on the following terms and conditions
agreed upon between the parties.
NOW
IT IS AGREED BY AND BETWEEN THE PARTIES AS FOLLOWS:
1. The Company agrees to
give and deliver over to the Hirer the said machinery and equipment described
in the Schedule hereunder written on hire on the terms and conditions
hereinafter mentioned and pursuant to the said Agreement the Company has
delivered possession of the said machinery and equipment to the Hirer.
2. The Hirer confirms
that he has inspected the said machinery and equipment before taking possession
and is satisfied that it is in good and working condition and acknowledges
delivery of the same to him by the Company and agrees to hold it on the terms
and conditions hereinafter mentioned.
3. The hire-purchase
price of the said machinery and equipment fixed at Rs............... exclusive
of the deposit amount mentioned in the next clause and the cost price fixed at
Rs......... is accepted by both the parties hereto.
4. The Hirer has paid to
the Company on the execution of this agreement a sum of Rs..... as deposit or
earnest which will be adjusted against the hire purchase price of the said
machinery and equipment, If the Hirer exercises the option to purchase the same
as hereinafter mentioned. If the Hirer does not exercise the said option or the
agreement is terminated before the exercise of such option then the said amount
of deposit will be returned to the Hirer by the Company on the expiration or
sooner determination of this agreement, subject to deduction of any claim which
the Company may have against the Hirer under or by virtue of this agreement or
in law, including the cost price of the said machinery and equipment.
5. During the pendency
of this agreement the Hirer shall pay to the Company by equal monthly
installments a sum of Rs.... as hire charges, in advance, the first of such
payments to be made on the execution of this agreement and each subsequent
monthly payment will be made on or before the... day of such each succeeding
month hereafter. The payment will be made at the registered office of the
Company by cash only or by cheque in the name of the Company.
6. If the Hirer fails to
pay any monthly installment of hire charges on the due date thereof then the
Hirer shall be liable to pay interest thereon at the rate of........% per annum
from the date of default till payment thereof. This is however, without
prejudice to the right of the Company to terminate this agreement for default
in payment of the monthly Installments as hereinafter provided.
7. During the pendency
of this agreement the Hirer shall keep the said machinery and equipment in good
working condition and shall maintain It properly as a man of prudence would do
and shall replace any of the parts thereof lost or disused or out-of-use or
broken.
8. The Hirer agrees to
indemnify and keep Indemnified the Company against any loss the Company may
suffer due to any damage done to the said machinery and equipment by any reason
whatsoever.
9. The Company through
its authorised representative shall be entitled to inspect the said machinery
and equipment during working hours at any time and for that purpose to enter
into the premises where the said machinery and equipment will be installed or
kept and the Hirer shall allow the Company and its representative to do so.
10. The Company does not
give any warranty as to the quality or fitness of the mechanism of the said
machinery and equipment and will not be responsible or liable for any defect
found therein.
11. The Hirer proposes to
install the said machinery and equipment at....... and agrees and undertakes
not to remove the same to any other place without the prior written consent of
the Company. The Hirer shall not remove the nameplates fixed to the machinery
for the purpose of identification of the property of the Company during the
pendency of this agreement.
12. The Hirer shall keep
the said machinery and equipment insured in the name of the Company with any
recognised Insurance Company and shall pay the premium as and when due and
payable regularly. The Policy of Insurance will be handed over to the Company
and the Hirer shall produce the premium receipt or furnish true or photocopies
thereof to the Company from time to time. If the Hirer fails to insure the said
machinery and equipment or fails to pay the premium at any time the Company
will be entitled to insure (without prejudice to Its other rights under this
agreement) the same or to pay the premium as the case may be and the costs
incurred by the Company will be paid by the Hirer to the Company as and when
demanded.
13. The Hirer shall use
the said machinery and equipment for the manufacture of and not for any other
purpose without the prior consent of the Company.
14. The Hirer shall not
give the said machinery and equipment on hire or on any other basis or to allow
it to be used by any other person without the prior written consent of the
Company and shall not hypothecate or pledge the same with any person to secure
payment of any moneys.
15. The ownership or
property of the Company in the said machinery and equipment will continue to
remain unaffected during the pendency of this agreement and the Hirer shall be
considered as the bailer thereof with all the-duties and obligations of a
bailee in law, until the Hirer exercises his option to purchase hereinafter
provided.
16. If any taxes or other
dues are required to be paid in respect of the said machinery and equipment,
the same will be paid by the Hirer and if any permit or licence to use the said
machinery and equipment is required to be obtained from any Government or any
local authority the same will be obtained by the Hirer at his costs and
responsibility.
17. If the said machinery
and equipment or any part thereof goes out of order and requires repairs of a
substantial nature the work of repairs will be carried only through a mechanic
appointed by the Company and the Hirer shall pay his charges.
18. The Hirer shall be liable
to pay the hire charges every month not- withstanding whether the said
machinery and equipment is working or remains idle for want of work or for any
other reason.
19. This agreement shall
be deemed to have commenced from the date hereof and will remain in force for a
period of... years from the date hereof that is up to the day of... and (unless
the Hirer exercises the option to purchase as hereinafter provided), on the
expiration of the said period or earlier termination thereof as hereinafter
provided the Hirer shall hand over back the said machinery and equipment in
good working condition subject to normal wear and tear at his costs at the
place of business of the Company or as may be directed by the Company provided
that, the Hirer shall continue to be liable to pay hire charges until the said
machinery and equipment is actually delivered over to or taken over by the
Company.
20. If the Hirer commits
breach of any term of this Agreement or fails to pay any two monthly
installments of hire charges, the Company will have the right to terminate this
agreement by giving one month's prior notice to that effect and unless in the
meanwhile the breach is remedied and the hire charges are paid as the case may
be. This agreement shall, on the expiration of the notice period stand
terminated. If the agreement is terminated as aforesaid the Hirer's option to
purchase as hereinafter mentioned shall stand forfeited or cancelled.
21. If the Hirer is
adjudged insolvent or he allows the said machinery and equipment to be attached
in execution of a decree or an order of a court or for recovery of any
Government dues or if a Receiver thereof is appointed by Court or any creditor,
this agreement, on the happening of any such event shall stand terminated.
22. The Hirer shall have
also a right to terminate this agreement at any time by giving not less thin
fourteen days' prior notice to the company to that effect but in such a case
the Hirer will be liable to pay to the Company the amounts which have accrued due
towards hire charges have not been paid and the amount of hire charges payable
for the period from the date of termination till the stipulated period of this
agreement would expire as and by way of compensation for the loss suffered by
the Company, subject to the provisions of S. 10 (2) of the Hire Purchase Act.
23. On the termination of
this agreement by efflux of time or earlier termination by the Company or the
Hirer or otherwise as aforesaid, the Company shall return to the Hirer the
amount of deposit less the amounts payable by the Hirer to the Company for hire
charges or otherwise and the expenses to be paid or Incurred by the Hirer in
terms of these presents and not paid by him.
24. If the said machinery
and equipment is lost or wholly destroyed or damaged beyond repairs by fire,
floods or earthquake or for any other reason, the Hirer shall make good the
loss suffered by the Company, the loss being the market price of the machinery
and equipment then existing or the hire-purchase price mentioned in clause (3)
above, whichever is more, Provided that, the amount of Insurance claim received
if any will be adjusted against such price.
25. The Hirer shall have
the option to purchase the said machinery and equipment, and the option shall
be exercised by giving one month's prior notice to the Company. The option to
purchase can be exercised from the date of expiration of the stipulated period
of this agreement or from any earlier date. In the former case the Hirer shall
be liable to pay to the Company a sum equal to the Hire purchase price of the
machinery and equipment mentioned in Clause (3) above, less the aggregate
amount of installments paid up to that date or Rupee one whichever is higher.
In the latter case that is if the option to purchase is exercised before the expiration
of the period of this agreement, the Hirer shall be liable to pay a sum equal
to the said Hire-Purchase price or the balance thereof payable by monthly
installments of hire charges up to the date of the stipulated period of the
agreement as reduced by a rebate which will be equal to two third of an amount
which bears to the hire purchase charges the same proportion as the balance of
the hire purchase price not due till then bears to the hire purchase price.
26. On the Hirer
exercising the option and paying the price of the machinery and equipment and
other moneys as mentioned in clause (25) above to the Company the sale of the
said machinery and equipment to the Hirer shall be deemed to be complete as on
the date the option comes into operation. But until then, the Company will
continue to be the owner thereof. If, however, the Hirer fails to pay the
amount due and payable to the Company as aforesaid at or before the date from
which the option is to become effective, this agreement shall stand terminated
and the Hirer will return the machinery and equipment to the Company forthwith
in good working condition as aforesaid.
27. Notwithstanding the
completion of sale of the machinery and equipment, the Company shall have a
lien or charge on the same for all the moneys due and payable by the Hirer
under this Agreement.
28. The Company declares
that
a. The Hirer shall have
and enjoy quiet possession of the said machinery and equipment during the
subsistence of this agreement.
b. That the said
machinery and equipment is free from any charge or encumbrance in favour of any
third person.
c. The Company has a
right to sell the said machinery and equipment.
d. The said machinery
and equipment is new/second hand.
29. The Hirer shall not
assign the benefits and rights under this Agreement to any other person without
the prior written consent of the Company which consent shall not be
unreasonably withheld or refused.
30. If on the
determination of this agreement by efflux of time or otherwise, the Hirer fails
to deliver the said machinery and equipment to the Company, without there being
any dispute the Company will be entitled to file a suit or take other
proceedings to recover possession thereof and the Hirer will be liable to pay
all the costs, charges and expenses incurred by the Company, in that behalf
subject to any order of the Court.
31. If any dispute arises
between the parties out of or in connection with the agreement whether in the
nature of interpretation or meaning of any term hereof or as to any claim by
one against the other, or otherwise the same shall be referred to arbitration
of a common arbitrator if agreed upon. Otherwise in case two arbitrators are
appointed, one to be appointed by each party hereto and the arbitration shall
be governed by the Arbitration Act, 1996.
THE
SCHEDULE ABOVE REFERRED TO
(List
/Description of machinery & equipment)
Signed
and delivered for and
on
behalf of M/s. A B & Co. Ltd., by Mr.... a Director of the Company duly
authorised by a Resolution of the Board of Directors dated...
in
the presence of...
Signed
and delivered by the within named Hirer Mr. in the presence of...
