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Report No. 20

18. Restriction on owner's right to recover possession of goods otherwise than through Court.-

(1) Where goods have been let under a hire-purchase agreement and the statutory proportion of the hire-purchase price has been paid, whether in pursuance of a judgment or otherwise, or tendered by or on behalf of the hirer or any surety, the owner shall not enforce any right to recover possession of the goods from the hirer otherwise than by petition under sub-section (3) or by suit.

Explanation.-In this section, "statutory proportion" means-

(a) one-half, where the hire-purchase price is fifteen thousand rupees or less, and

(b) three-fourth, in other cases.

(2) If the owner recovers possession of goods in contravention of the provisions of sub-section (1), the hire-purchase agreement, if not previously terminated, shall terminate, and-

(a) the hirer shall be released from all liability under the agreement and shall be entitled to recover from the owners all sums paid by the hirer under the agreement or under any security given by him in respect thereof; and

(b) any surety shall be entitled to recover from the owner1 all sums paid by him under the contract of guarantee or under any security given by him in respect thereof.

(3) Where, by virtue of the provisions of sub-section (1), the owner is precluded from enforcing a right to recover possession of the goods, he may present a petition for recovery of possession of the goods to any court having jurisdiction to entertain a suit for the same relief.

(4) The provisions of this section shall not apply in any case in which the hirer has terminated the agreement2 by virtue of any right vested in him.

1. The words "in a suit for money had and received" occurring in the English Act have been omitted, as unnecessary.

2. The words "or the bailment" occurring in the English Act, have been omitted, as unnecessary.

(Cf. section 11, H.P.A., 1938)



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