Report No. 168
2.22. Section 17.-
Section 17 provides for the rights of the hirer in case of seizure of goods by the owner. This section has been proposed to be amended in several particulars by the 1989 (Amendment) Bill. In particular sub-section (5) is proposed to be inserted in the said section. These proposed amendments are acceptable and are accordingly adopted by the Law Commission.
2.22.1. Though no objections were raised in the first response, objections have been raised with respect sub-sections (1), (2) or (3) of this section in the revised set of objections. It has been submitted that the words "falls short" in sub-section (1) should be substituted with the word "exceed". No reasons are given in support of this change and hence the Law Commission is unable to consider this suggestion.
The other suggestion addition of certain words in clause (1) of this sub-sectio.- is really superfluous since those words are already added by the Amendment Bill in the main limb of the sub-section. The substitution of certain words suggested in sub-section (2) is also unacceptable for the reason that the words proposed to be substituted do not fit into the structure or scheme of the sub-section. With respect to suggestion for adding certain words in sub-section (3), no reasons have been given in support thereof. Accordingly, the suggestions given with respect to sub-sections (2) and (3) cannot be accepted.
2.22.2. In sub-section (4) of section 17, the Federation has suggested that after the words "that could be reasonably obtained by him", the following words "in case where the goods are required by any law for the time being in force to be registered in the owners name, on the date of such registration and in other cases" should be substituted. We have not really been able to comprehend the reasons for addition of the words suggested. The only reason given by the Federation in its first response was to the following effect:
"But for the goods which is subject to registration to be made by the Government, the date of registration in the name of the owner has been considered as the date for such valuation, vide amendment sub-section (2) under the forthcoming Bill. Hence, in compliance with the said section, the sub-section (4) also equally requires to be amended accordingly, for such goods." The purpose behind the provision in sub-section (2) and the provision contained in sub-section (4) is, however, not identified by the Federation. The substitution suggested in sub-section (4) is therefore not acceptable.
2.22.3. So far as sub-section (5) which is sought to be inserted by the Amendment Bill in section 17 is concerned, the Federation had suggested in its first set of objections that after the words "the owner at his discretion" in the last limb of sub-section, the words "on his reinstating the hiring" should be inserted. It has been further suggested that the following words "as if the agreement had not been terminated and the owner had not taken possession of the goods" occurring at the end of sub-section should be deleted. The reasons given in support of these suggestions are wholly unacceptable.
Sub-section (5) provides for a relief to a hirer in case of seizure of goods by the owner under clause (c) of section 19. In such a situation, the suggestions put-forth by the Federation cannot be accepted. In the revised set of objections, while the aforesaid suggestion is not reiterated, a new suggestion is put forward viz., substitution of clause (iii) of sub-section (5). In effect, by means of this substitution, the Federation seeks to bring in the concept of 'reinstatement of hiring' under the hire-purchase agreement. A distinction is sought to be made between the 'agreement' and the 'hiring', which has no basis in principle. We are unable to accede to these suggestions.
2.22.4. The Government of Haryana has suggested that the words "the owner, at his discretion may" should be substituted with the words "the owner shall". The Law Commission agrees with the reasoning behind this change. Once the hirer has rectified the default (on account of which the goods were seized) there should be no further discretion left in the owner either to return the goods or not. He should return the goods-unless of course, he has disposed of the said goods before the hirer makes the payment or remedies the breach as contemplated by this section. Accordingly, the last para in sub-section (5) of section 17 may be recast as follows:
"the owner shall return the goods to the hirer, except in a case where the goods are disposed of by way of sale or by way of hire-purchase as the case may be before the hirer makes the payment or remedies the breach as contemplated by this sub-section, and on such return the goods shall be recovered and held by the hirer pursuant to the terms of the hire-purchase agreement as if the agreement had not been terminated and the owner had not taken possession of the goods."