Merchant Banking

1. Hire
purchase
Presentation by
Abdulkarim M Khanapuri
Under the guidance of
Dr. N Maruti Rao

2. Contents
▪ Hire purchase
▪ Conditions and Warranties
▪ Market players and Products offered
▪ Hire purchase agreement photocopy

3. Introduction
Hire Purchase is an agreement to hire an goods over a
predefined period with an option to purchase at the end of
the agreement.
Definition
According to the Hire Purchase Act of 1972, the term ‘hire
purchase’ is defined as, “an agreement under which goods
are let on hire and under which the hirer has an option to
purchase them in accordance with the terms of the
agreement.

4. Terms and conditions
• Payment of periodic installments
• Ownership of asset remains with vendor until the last
installment
• In the event of default the vendor can repossess the asset
• Treatment of each installment as hire charge till the
payment of the last installment
• The person has the right to terminate the agreement any
time before the property so passes to him
• Right of protection; hire vendor cannot terminate the
agreement without sending notice in writing to the hirer

5. Conditions and Warranties
Implied conditions
• Implied condition that if the seller’s title turns out to be
defective, he may reject the goods.
• An implied condition that the owner has the right to sell
the goods at the time when the property is to pass-
S.7(1)(b)
• S.7(2) provides that there shall be an implied condition
that the goods shall be of Merchantable quality.
• Merchantable quality: Goods sold are reasonably fit for
the purpose for which they are required. The hirer has
made known to the owner the particular purpose for
which the goods are required.

6. Implied Warranties
• An implied warranty that the goods shall be free from any
charge or encumbrance when the property in the goods is to
pass- S. 7(1)(c)
• An implied warranty that the hirer shall have and enjoy quiet
possession of the goods- S.7(1)(a)
Such conditions shall not be implied
• Where the hirer has examined the goods or a sample thereof,
as regards defects which the examination ought to revealed.
• If the goods are second-hand goods and the agreement
contains a statement to the effect that:
• The goods are second-hand
• The hirer has acknowledged in writing that he had been
notified
Continued…

7. Shriram Transport Finance Corporation
▪ Established in 21st November 1983 in Delhi
▪ Products offered
▪ Heavy duty truck hire purchase
▪ Medium intermediate and light duty truck hire
purchase
▪ Pick up trucks and mini truck hire purchase
▪ Passenger vehicle hire purchase
▪ Farm equipment hire purchase

8. Escorts Finance Limited
▪ Incorporated on 9th February, 1987.
▪ Products offered
▪ finance for cars
▪ construction equipment
▪ agricultural tractors.

9. Agreement copy