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Report No. 168

2.23. Section 18.-

Section 18, which is the first section in Chapter V dealing with the rights and obligations of the owner, entitles the owner to terminate the hire-purchase agreement for default in payment of hire or any unauthorised act or breach of express condition. Sub-section (1) provides that in case of more than one default in the payment of hire as provided in the agreement, the owner shall be entitled to terminate the agreement subject to section 21 and after giving the hirer a notice in writing of not less than one week in case the hire is payable at weekly or lesser intervals and two weeks' notice in any other case.

In its first set of objections, the Federation stated that in case of even a single default, the owner shall be entitled to terminate the agreement. The Federation is also opposed to the provision of giving the hirer a notice in writing of not less than one week or two weeks, as the case may be, as provided in sub-section (1). The only reason given is that since the hirer knows the dates on which he has to make the payment, even a single default should entitle the owner to terminate the agreement subject of course to section 21.

In the revised set of objections, the plea of a single default is dropped but the objection to the requirement of notice is reiterated. Acceptance of this suggestion made by the Federation would result in making the provision in sub-section (1) very harsh. The law must take note of the actual prevailing conditions. Sub-section (1) of section 18 as proposed to be amended by the 1989 (Amendment) Bill is, therefore, eminently reasonable and should remain unchanged.

2.23.1. The amendments suggested in sub-section (2) of section 18 are merely formal. The Federation wants the expression "agreement", wherever it occurs to be substituted by the expression "hiring". No good reasons are assigned for this phraseological change. The only amendment proposed by the 1989 (Amendment) Bill in this behalf is the substitution of the words "together with such incidental charges and expenses" in the place of the words "together with such interest thereon" occurring in the proviso to sub-section (1). This amendment is perfectly reasonable and should be accepted. Accordingly, section 18 should remain unchanged except for the amendments suggested by the 1989 (Amendment) Bill.

The Hire-Purchase Act, 1972 Back

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