Section 636: The owner of goods may terminate contract

1) If the hirer defaults to pay more than one installment of the hire-purchase price to be paid to the owner of goods according to the hire-purchase or terminate contract, the owner of goods shall be entitled to terminate the hire-purchase contract at any time, by giving an advance notice as follows to the hirer:

(a) If the installment is to be paid within or less than an interval of one week, a period of one week.

(b) In the cases other than those referred to in clause (a), a period of fifteen days.

2) Notwithstanding anything contained in sub-section (1), if the hirer makes payment of the installment and the interest, if any, to be accrued thereon according to the hire-purchase, terminate contract before the expiry of the period for giving an advance notice pursuant to the said sub-section, the hire-purchase contract cannot be terminated.

3) If the hirer fails to perform the hire-purchase contract or the terms and conditions referred to in Section 629 or 635, the concerned owner of goods may terminate the hire-purchase, terminate contract by giving a notice of at least fifteen days.

4) In the event of termination of the contract pursuant to sub-section (1) or (3), the owner of goods may exercise the following rights in relation to the hired goods:

(a) To take back the goods wherever and in whatever situation they may be, and if the goods cannot be so taken back, to forfeit them,

(b) To determine the amount of rent that he or she can recover out of the amount paid in lieu of such goods, and inform the hirer to take back of the exceeding amount,

(c) To forfeit the amount, if any, taken as a deposit from the hirer at the time of hiring the goods,

(d) To enter the house where the goods are located with the assistance of the police in the course of seizing the hired goods,

(e) To recover compensation from the amount paid or make a claim for the loss or damage caused from the failure to return the hired goods in time or failure to perform the contract or the terms and conditions referred to in Section 629 or 635.

5) Notwithstanding anything contained elsewhere in this Section, if the hirer, surety or investor has already paid at least the basic price of the hired goods, the owner of the goods shall not be entitled to terminate the hire-purchase contract under this Section.

Explanation:  For the purposes of this Section, the term “basic price” means three-fourths of the amount if the hire-price amounts to up to fifty thousand rupees and at least half the price if the hire-purchase price is more than that amount.

6) If the owner of goods terminate contract the hire-purchase contract in contravention of sub-section (5), the hirer or surety shall be in discharge of all liabilities to be fulfilled according to the hire-purchase contract and shall be entitled to a refund of the entire amount paid for the goods hired by him or her.

Provided that the hirer shall return the hired goods to the concerned owner of the goods.

7) Notwithstanding anything contained in sub-section (5), a restriction to terminate the hire-purchase contract shall not be deemed to bar in any manner the right to make a claim for the hire-purchase price to be received from the hirer according to the contract.

8) Notwithstanding anything contained elsewhere in this Section, the owner of goods may terminate the hire-purchase contract entered into with the person who does not give information referred to in Section 635 and, if any loss or damage is caused to such goods, make a claim for the same as well.