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Report No. 168

The Hire-Purchase Act, 1972

Chapter I


1.1. The subject.-

The Law Commission had, in its eighth report on the Sale of Goods Act1 observed as follows:

"There is no provision in the Act regulating a transaction of hire-purchase, which is also a method of selling goods. It is a transaction of hire at the inception with an option to purchase.

In the English Sale of Goods Act of 1893, there was no provision for such a transaction. Hence provision was made by a separate Act, namely, the Hire-Purchase Act of 1938 (1 and 2 Geo. 6, c. 53), with a view to affording protection to the buyer of the goods on hire-purchase, or on similar terms, against certain abuses which had become apparent in the practice of hire-purchase trading. This Act has been supplemented by the Hire-Purchase Act, 1954 (2 and 3 Eliz. 2, c. 51).

In our opinion, it is desirable that a separate Act on the lines of the English Hire-Purchase Acts and other similar laws should be enacted in India to regulate hire-purchase transactions. The Commission will make its recommendations in this connection in a separate report."

1. Eighth Report, para. 12.

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