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Report No. 20

The Law of Hire-Purchase

1. Need for legislation-recommendation in the Eighth Report.-

The Law Commission has, in its Report on the Sale of Goods Act,1 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. The 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 an separate report."

This Report has been prepared in accordance with the above suggestion.

1. Eighth Report, para. 12.

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