Hire-Purchase Act 1972

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 Background of Hire-Purchase
The Concept was originated in England during the
mid-19th century, against the backdrop of the
Industrial Revolution.
Singer Sewing Machine company (US)
 Murphy Radio dealers (UK).
Started in India by:
1. Auto Supply Company (Commercial Credit
Corporation in Madras in 1920
2. Motor and General Finance (MGF) in 1930 in Delhi.
3. Instalment Supply Company in 1930 in Delhi.

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 Hire-Purchase & Sale
Lee v. Butler [1893] 2 QB 318.
Helby v. Matthews [1895] AC 471.
Sundaram Finance Ltd. v. State of Kerala, AIR 1966 SC
1178.
Damodar Valley Corporation v. State of Bihar, 1961 AIR
440: Tests to determine whether an agreement to be
one of hire-purchase as opposed to sale:-
1. Whether there is a Binding Obligation upon the
Hirer to Purchase the Goods?
2. Whether there is a Right reserved to the Hirer to
Return the Goods at any time during the Subsistence
of the Contract?
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 Hire Purchase and Sales Tax Liability and the
Constitution of India

1958: 8th Law Commission Report.

Commercial Credit Corporation v. Deputy Income
Tax Officer, AIR 1958 Mad 561.
K.L. Johar & Co. v. Deputy Commercial Tax Officer,
AIR 1965 SC 1082.
1974: 61st Law Commission Report.
1982: 46th Amendment Passed.
Insertion of Clause 29A into Article 366 of the
Constitution of India.
1999: 168th Law Commission Report.
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 Major Definitions
Section 2 ©: Hire Purchase Agreement.
Section 2 (e): Hirer.
Section 2 (f): Owner.
Section 3: Form and Signature.
Section 4: Contents of Hire Purchase Agreements.

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 Warranties and Conditions
 Sec 6: Implied Warranties
1. Warranty of Quiet Possession.
2. Free from Charge or Encumbrance.

 Sec 6: Implied Conditions

1. Sec 6 (2): Condition as to Title:
 Mercantile Union Guarantee Corpn. V. Wheatley,
[1938] 1 KB 490.
 Warman v. Southern Countries Car Finance
Corpn. Ltd., [1949] 2 KB 576.

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2. Sec 6 (2) (b): Merchantable Quality:
 Shine v. General Guarantee Corpn. Ltd., [1988] 1
All ER CA.
3. Sec 6 (3): Fitness for Hirer’s Purpose:
4. Sec 6 (4): Letting according to Sample:
5. Sec 6 (5): Letting under Description.

Sec 8: Passing of Property

 Jay Bharat Credit & Investment Co. Ltd. v.
Commissioner of Sales-Tax & anr, (2000) 7 SCC
165.
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