Chapter V SUPPLY OF MACHINERY ON HIRE-PURCHASE SYSTEM

Percentages of cost to be deposited by hirer.-No machinery shall be supplied by the Government on the hire-purchase system unless the applicant therefor deposits with the Director such percentage of the cost thereof as may be prescribed and furnishes security for the unpaid portion of such cost in the same manner as for a loan granted under the provisions of Chapter IV.

Particulars to be specified in order when application is allowed.-When an application is allowed, the Director shall, subject to and in accordance with any rules that may be made under this Act, make an order specifying the following particulars, namely:-

1. (a) the amount of each instalment of rent to be paid for the hire of the machinery and the number of such instalments to be paid before the machinery shall become the property of the hirer;
2. (b) the amount of interest, if any, to be paid with each instalment of rent on the remaining unpaid instalments;
3. (c) the dates on which and the manner in which the aforesaid payments shall be made; and
4. (d) such other particulars as may be prescribed.

Conditions of supply of machinery on hire purchase system.- Until the hiring is terminated in the manner hereinafter provided, the following provisions shall apply, namely :-

1. (a) The hirer shall pay punctually and without demand the instalments of rent and amount of interest specified in the order referred to in section 37.
2. (b) The hirer shall retain the machinery in his own possession in good and serviceable order and condition and shall not, without the previous written consent of the Director, make any addition thereto or alteration therein, nor remove the machinery or any part thereof from the premises specified in the application for the supply thereof.
3. (c) The machinery shall remain the sole and absolute property of the Government and any transfer thereof or assignment of any right, title or interest therein or the creation of any mortgage, encumbrance or any other charge thereon by the hirer shall be void as against the Government unless it has been made with the previous written consent of the Director.
4. (d) The machinery shall not be liable to distraint, attachment or sale by any process under any law for the time being in force otherwise than under this Act.
5. (e) The machinery shall bear a metal plate in the prescribed form, and any person who wilfully removes or defaces such plate shall be liable to a fine not exceeding five hundred rupees. It shall be presumed until the contrary is proved that the machinery bearing such metal plate is the property of the Government hired out under this Chapter.
6. (f) The hirer shall permit the Director or any person authorised by the Director in this behalf to inspect the machinery at all reasonable times, and the Director or such other person shall have all such powers of entry as may be necessary for the purpose of making an inspection.
7. (g) In addition to the foregoing conditions the hirer shall be bound by such other conditions consistent therewith as may be prescribed by rules made under this Act, or may be imposed by the Director in any particular case.

Consequences of default by hirer.-If the hirer makes default in paying the rent of the machinery or any sum payable as interest or any other charges due from him under this chapter or fails to comply with any of the conditions which are contained in, or may be imposed under section 38, the Director may, after giving him sixteen days notice, terminate the hiring and he or any other officer authorised by him in this behalf may thereupon enter the premises in which the machinery is for the time being kept, whether such premises belong to the hirer or not and seize and take away the same.

Option of hirer to purchase machinery seized for default.-

1. (1) If the machinery is seized and taken away under section 39, the hirer shall have the option, to be exercised within one month after such a seizure or such longer period as may be allowed by the Director in this behalf, of purchasing the same by payment to the Director of the unpaid balance of the cost thereof, together with such other amounts as may be due, and the cost of and expenses incidental to such seizure and removal.
2. (2) If within the period specified in sub-section (1), the hirer does not exercise the option of purchase, the Director shall proceed to dispose of the machinery.

Liability of hirer on termination of hiring under sections 24 and 25.-If the Director terminates the hiring under section 39 and the hirer does not purchase the machinery under section 40, the hirer shall not be entitled to the refund of the sum deposited by him under section 36 or to the refund or remission of any payment made by or due from him during the hiring, and shall be liable to pay such amount, if any, as the Director may determine in respect of any loss caused by the disposal of the machinery under sub-section

1. (2) of section 40.

Termination of hiring on payment of cost of machinery.- When, after credit has been given for the amount deposited under section 36, the hirer has paid in full all the instalments of rent mentioned in clause

1. (a) of section 37 and the amount of interest, costs and other charges payable by him under this Chapter, he shall become the owner of the machinery and shall thereupon remove from the same the metal plate mentioned in clause
2. (e) of section 38 :

Penalty for non-removal of metal plate from machinery Penalty for non-removal of metal plate from machinery.- If the hirer wilfully omits, after receiving due notice, to remove the metal plate from any machinery which has become his property under section 42, he shall be liable to a fine not exceeding fifty rupees.

Sums due under this Chapter recoverable as loans under Chapter IV.-All sums payable under this Chapter shall be recoverable in the same way as loans under Chapter IV.