9911796707
TMI Blog1999 (11) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... Act") against the Haryana Suraj Maltings Limited (hereinafter described as "the respondent-company"). It has been asserted that in the month of August, 1995, the respondent-company approached the petitioner-company and represented that it was in need of a vapour absorption system. It expressed its desire to take the same on hire-purchase. The respondent-company further represented to the petitioner-company that it was a financially sound company and would be able to meet its commitments devolving upon it under the arrangement that would be entered into. Both the parties agreed to the terms and conditions of the hire-purchase facility and entered into a hire-purchase agreement on September 14, 1995. Shri Mukesh Aggarwal executed a persona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. The respondent-company again defaulted in the payment of hire instalments and continued to enjoy the use of the equipment. The petitioner-company served a legal notice and demanded the balance amount of Rs. 22,13,244. The same had not been paid. Presently, it was stated that the respondent-company is indebted to the petitioner-company for a sum of Rs. 25,10,505 under the aforesaid hire-purchase agreement. The factory of the respondent-company had been taken over by the Haryana State Industrial Corporation Limited. It came out with a public notice offering for sale the unit of the respondent-company including the machinery given on hire-purchase. The petitioner-company filed a civil suit before the Delhi High Court. The Delhi High Court r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule of payment, permission has been given to the respondent-company to advertise, negotiate and sell the vapour absorption system which is the subject-matter of the hire-purchase agreement under written prior communication to the petitioner-company. It will be the discretion of the petitioner-company to participate in the negotiation. The petitioner-company was allowed to have a first charge on the machinery till the entire amount in terms of the compromise is paid. At that stage, an application (C.A. No. 460 of 1999) was filed by the Haryana Financial Corporation (for short "the Corporation"). It wanted that the Corporation should be impleaded as a party. It was asserted that it had disbursed a total amount of Rs. 20 lakhs as loan to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as its very name implies has two aspects. There is first an aspect of bailment of the goods subjected to the hire-purchase agreement, and there is next an element of sale which fructifies when the option to purchase, which is usually a term of hire-purchase agreements, is exercised by the intending purchaser. Thus, the intending purchaser is known as the hirer so long as the option to purchase is not exercised, and the essence of a hire-purchase agreement properly so called is that the property in the goods does not pass at the time of the agreement but remains in the intending seller, and only passes later when the option is exercised by the intending purchaser. The distinguishing feature of a typical hire-purchase agreement, therefore, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery, machinery spares, tools and accessories, present and future, subject to prior charges created and/or to be created : ( i )In favour of the borrower's bankers on the borrower's stocks of raw materials, semi-finished and finished goods, consumable stores and such other movables as may be agreed to by the lender for securing the borrowings for working capital requirements in the ordinary course of business ; and ( ii )The borrower shall make out a good and marketable title to its properties to the satisfaction of the lender and comply with all formalities as may be necessary or required for the said purpose." The said terms would make it clear that it is only the property of the respondent-company, present and future, which would b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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