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Report No. 168

2.25. Section 20.-

Section 20 places a restriction on the owner's right to recover possession of goods otherwise than through Court. The 1989 (Amendment) Bill proposes to change the figures mentioned in the "Explanation" appended to sub-section (1); for the words "fifteen thousand rupees" and "five thousand rupees", wherever they occur, the words "twenty thousand rupees" and "ten thousand rupees" respectively are sought to be substituted. The only and the main objection of the Federation to this section (as put forward in the first set of objections) is that wherever it mentions 'hire-purchase price', it should be substituted by the words "net hire-purchase price".

According to the Federation, since the deposit is already paid at the inception that should not be taken into account for the purpose of determining the "statutory proportion". In the revised set of objections, however, several objections have been raised to this section. Firstly, it has been submitted that section 20 is bad altogether inasmuch as it violates the Fundamental Rights of the owner. Alternatively, it is suggested that there ought to be'a change in the amounts mentioned in the several clauses of the 'Explanation'.

The reasons given in support of these new suggestions are that by entering into a hire-purchase transaction, the owner is running a great risk and that this section has the effect of driving the owner to court where proceedings may drag on for years together, and that this would be putting him to greater-risk. It is submitted that this section is wholly biased in favour of the hirers and is prejudicial to the interest of the owners. The Law Commission does not find it possible to agree with any of these suggestions. Firstly, it may be noted that deposit too forms part of the hire-purchase price.

Secondly, the proportion at which the "statutory proportion" is fixed is fair and just. The right of the owner to recover possession is interfered with only where the 'statutory proportion' is either paid or tendered by or on behalf of the hire.- and not in all cases. Such a provision is necessary to prevent unjust and oppressive seizures by the owners. The suggestions put forward are, therefore, unacceptable. Accordingly, section 20 should remain unchanged except for the changes indicated in the 1989 (Amendment) Bill.

The Hire-Purchase Act, 1972 Back

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