Report No. 168
2.8. Section 2(d): definition of "hire-purchase price".-
The only addition the Federation had asked for in its original set of objections is of the words "authorised by the owner" after the.words "to the owner or to any other person" and before the words "or is to be or has been discharged". The Law Commission sees no objection to the addition of the said words which are merely clarificatory in nature. The Federation has also suggested that the words "hire-purchase charges" should be substituted with the words "hire charges". The reason given in support of this change is an extension of its objection to the definition of the expression "hire-purchase agreement" which has been found to be unacceptable.
2.8.1. It may be mentioned that the Law Commission had proposed the substitution of the said definition with a view to simplifying it but on a further consideration, the Commission has decided to retain the definition as it is contained in the original Act with the amendment indicated in the Hire-Purchase (Amendment) Bill, 1989. Accordingly, the definition of the expression "hire-purchase price" in clause (d) of section 2 shall read as follows:-
"(d) "hire-purchase price" means the total sum payable by the hirer under a hire-purchase agreement in order to complete the purchase of or the acquisition of property in, the goods to which the agreement relates; and includes any sum so payable by the hirer under the hire-purchase agreement by way of a deposit or other initial payment, or credited or to be credited to him under such agreement on account of any such deposit or payment, whether that sum is to be or has been paid to the owner or to any other person authorised by the owner or is to be or has been discharged by payment of money or by transfer or delivery of goods or by any other means; but does not include any sum payable as a penalty or as compensation or damage for a breach of the agreement, and also does not include any sum-
(i) payable as expenses for delivering the goods to the hirer and the installation thereof, in accordance with the terms of the agreement, or
(iii) payable as any fee, in respect of the goods and the agreement, for the purposes of registration or otherwise under any law for the time being in force, or
(iii) payable as insurance premium, or
(iv) payable as penalty, compensation or damages for a breach of the agreement."
2.9. The 1989 (Amendment) Bill has added clause (c) in sub-section (1) of section 3 which sets out the requirements of a hire-purchase agreement. The AIHPA wants this clause to be deleted. At the same time, it wants the addition of the following words: "containing the main rights and obligations of the parties thereto" at the end of clause (a) of sub-section (1). The Law Commission sees no reason to agree to the said suggestion. The Federation has also suggested addition of certain words in sub-section (1) which suggestion is fully given effect to by the Law Commission by introducing sub-section (4) in this section.
Yet another objection, which is repeated ad naseum is that the expression "surety" be substituted by the expression "guarantor" for which there does not appear to be any good or substantial reason. Section 3 as contained in the original Act.and as proposed to be amended in 1909 (Amendment) Bill is wholly appropriate and needs no change. Accordingly, section 3 should read as follows:-
"3. Hire-purchase agreement to be in writing and signed by parties thereto.-
(1) Every hire-purchase agreement shall be-
(a) in writing;
(b) signed by all parties thereto; and
(c) accompanied by a declaration in the prescribed form containing the main rights and obligations of the hirer and signed by all the parties to the agreement.
(2) A hire-purchase agreement shall be void against the hirer if any of the requirements specified in sub-section (1) has not been compiled with.
(3) Where there is a contract of guarantee, the hire-purchase agreement shall be signed by the surety also, and if the hire-purchase agreement is not so signed, it shall be voidable at the option of owner."
2.10. The Law Commission had suggested addition of sub-section (1A) in section 4. The Federation has not objected to it but has submitted that this provision should be incorporated in section 3. This suggestion is accepted. Accordingly, it is recommended that a new sub-section, namely, sub-section (4) be added in section 3 to the following effect:
"(4) The Hire-purchase Agreement and the declaration shall be executed in two sets, duly signed by the parties. One such set shall be handed over to the hirer and where there is a surety, yet another set to the surety, immediately after the execution of the Agreement."