Report No. 20
6. Maximum limit for application of the Act.-
We should refer to another point on which the present draft differs from the English Act. The Hire-Purchase Act, 1938 as amended in 1954, does not apply to agreements in which the hire-purchase price exceeds, in the case of live-stock. £1,000, and in other cases, £300. We have considered the question whether we should likewise impose a maximum pecuniary limit on the transactions to which this legislation should apply. There is, among the opinions received, some support for the view that the Act should be restricted in its application to hire-purchase agreements below a certain pecuniary limit.
But as against this, it has been urged that this country has just entered on an era of industrial expansion, that hire-purchase transactions would greatly facilitate such expansion and that therefore we should not impose any such restriction. The main ground on which the demand for prescribing pecuniary limit was based had reference to the provision in the draft which was circulated that the owner could not seize the goods in case of default, when one-third of the hire-purchase amount had been paid. It was said that this provision would act harshly on the owner, when high-priced goods such as trucks and lorries were given on hire-purchase agreements.
This objection loses much of its force, now that we have provide1 that the owner cannot exercise his right to seize the goods otherwise than through court where the hire-purchase price exceeds Rs. 15,000 when three-fourths thereof had been paid, and where it is Rs. 15,000 or less, when half of it had been paid. This provision will give, in our opinion, sufficient protection to the owner. To bar the application of the Act altogether when the hire-purchase price exceeds a limit would, in our opinion, impede the expansion of industrialisation, and we have accordingly decided that the legislation should apply to all hire-purchase agreements, whatever the amount payable thereunder.
1. See Appendix I, clause 18.
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