Rights of Hirers

As per the Hire Purchase Agreement, the hirer has got the right to return the goods to the vendor. Apart from this, the Hire Purchase Act gives the following rights to the hirer.

1)    The owner (or the vendor) cannot terminate the hire purchase agreement for default in payment of hire or due to an unauthorised act or breach of expressed conditions unless a notice in this regard in writing is given to the hirer. The notice period is

(i) one week where the hire is payable at weekly or less than that interval, and

(ii) two weeks in other cases.


2)    In the following cases, the right to repossess the goods will not exist unless it is sanctioned by the court.

i)     Where the hire-purchase price is less than Rs. 15, 000 and one half of the hire purchase price has been paid.

ii)     Where the hire purchase price is higher, three-quarters of the hire purchase price has been paid. However, the right of repossession will lapse in case of motor vehicles where the hire purchase price is less than Rs. 5,000 and one-half of the amount has been paid. In other cases (where H.P. price is Rs. 5,000 or more), it happens if three-quarters of the hire purchase price has been paid. The Central Government has the power of raising the limit to nine-tenths where the hire purchase price is Rs. 15,000 or more.

3)    The hirer has the right of receiving from the owner, on payment of Re. 1 for expenses, a statement showing the amount paid by or on behalf of the hirer, the amount which has become due under the agreement which remains unpaid together with the dates concerned and the amount which has not yet become payable under the agreement and the dates and the modes concerned.

4)    If the amount paid by the hirer till the date of the repossession of the goods and the value of the goods on the date of the repossession taken together exceeds the hire purchase price, the excess is payable to the hirer. For ascertaining the value of the goods, the owner or the vendor has the right of deducting reasonable expenses for repossessing the goods for storing the goods or repairing them, for selling them, and for payment of arrears of taxes.

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