Hire Purchase Agreement for Machinery for the Garden

This indenture is made this 30th day of September 2005 between AB Ltd., a company registered under the Companies Act 1956 and having its office at………in the town of…………hereinafter called the owner (which term shall unless excluded by or repugnant to the subject or context be deemed to include its successors) of the one part, Darjeeling Tea Ltd., a company registered under the Companies Act 1956 having its Registered Office at……..in the town of……being the owner of a Tea Garden/Tea Factory in the District of Darjeeling hereinafter called the hirer (which term shall unless excluded by or repugnant to the subject or context be deemed to include its successors) of the other part.
Whereas the owner carries on business of Hire-Purchase and lets out plants and machinery required by particular business organisation.
And whereas the hirer is the owner of a Tea Garden/Tea Factory known as Darjeeling Tea Estate.
And whereas the hirer with a view to improving the production of tea in its garden is desirous of installing machinery and equipment in its garden/ factory but does not have the necessary funds with which to purchase the same.
And whereas the hirer has applied to the owner for obtaining the plants and machinery on Hire-Purchase basis.
And whereas the owner has agreed to supply the hirer the requisite plant and machinery on Hire-Purchase on terms and conditions mentioned herein.
Now this indenture witnesseth and it is hereby agreed and declared by and between the parties as follows:
1. The owner shall purchase the specified plant, machinery and equipment described in the Schedule hereunder written (hereinafter called the machinery) at such time in such manner and on such terms and conditions as the owner thinks fit.
2. The hirer has agreed to the description and specifications of the machinery. The estimated total cost of the said machinery is Rs. 5,20,000. To the said amount shall be added estimated amount of all charges, expenses, freight, insurance charges, customs duty, sales tax including central sales tax, if payable, bank charges, charges for technical supervision of installation of the machinery by the Suppliers/Manufacturers or Engineers nominated by them and cost and expenses of installation in the case of driers, withering equipment, C.T.C. machine, roller equipment, dust extraction plant, oil burning equipment and steam engines and all other usual charges and expenses and interest on all moneys spent by the owner as hereinafter mentioned.
3. The owner shall let to the hirer and the hirer shall take on hire from the owner the said machinery or such of them as may be available after the purchase aforesaid.
4. The hirer has paid as earnest money to the owner on the 20th day of September 2005 a sum of Rs. 60,000 (Rupees sixty thousand only) being approximately 10% of the estimated amounts of charges, expenses, etc. mentioned in clause 1 hereof.
5. The hirer shall also pay to the owner the further sum of Rs. 60,000 (Rupees sixty thousand only) being 10% of the cost of machinery and of charges, expenses, etc. mentioned in clause 1 hereof immediately on completion of installation of all the machinery which are available in the opinion of the owner such opinion being final and binding on the parties provided however that payment of the said further sum of Rs. 60,000 (Rupees sixty thousand) shall in any event be made within 9 months from the date of completion of delivery. In the case of loss or destruction of machinery or any part thereof after delivery as mentioned in clause 6 hereof but prior to installation the time taken in obtaining machinery or parts for replacing those lost or destroyed shall not be taken into account for the purpose of calculating time for completion of delivery of Machinery.
6. Immediately on receipt of advice from the suppliers the owner will send intimation to the hirer that the machinery or equipment are ready for inspection and the hirer shall send a representative to accompany the Owner's Engineer when the latter goes to inspect the machinery or equipment. The inspection should normally be carried out in Calcutta within three days from the date of advice that the equipment is ready. Should the representative of the hirer fail to attend the inspection, such inspection will be held by the Engineer of the owner and his report will be final and binding on the hirer. Immediately after such inspection a copy of the specification and inspection certificate will be sent to the hirer.
7. Each machinery or equipment or part thereof shall be deemed to be delivered to the hirer as soon as each Railway Receipt, Bill of Lading or Air Consignment in respect thereof is delivered to it by or on behalf of the owner and delivery shall be completed or deemed to be completed as soon as the Railway Receipt, Bill of Lading or Air Consignment note in respect of the last machinery or equipment which in the opinion of the owner is available is delivered to the hirer.
8. The hirer shall pay the owner without demand during each year the sum of Rs. 50,000 (Rupees fifty thousand only) (being approximately 1/8th of the balance of the amount, charges etc. mentioned in clause 1 hereof) by way of hire rent for the said machinery, the first of such payment to be made after one year from the date the payment of 10% under clause 4 hereof becomes due and payable and every subsequent payment during the next 7 years to be made on the like day of each and every succeeding year provided further that in the event of one-eighth of the total cost of the machinery together with all charges, expenses, freight, insurance charges, customs duty, sales tax, central sales tax, if any, bank charges, costs and expenses of installation and all other usual charges and expenses and interest being less than or exceeding the said sum of Rs. 50,000 (Rupees fifty thousand only) the amount of yearly payment shall be proportionately reduced or increased.
9. In arriving at the amount of balance payable, interest has been calculated on the amount spent by the owner (after deducting the amount received by the owner under clause 3 hereof) from the date the same has been incurred at the rate of 12% (twelve percent only) per annum and such interest has been added to each of the yearly amounts hereinbefore mentioned and calculated upto the date of each payment. In the event of non-payment of any yearly amount on the respective due date the hirer shall be bound to pay the additional interest on the amount which is in default at the rate of 2% per month or part thereof but without prejudice to the right of the owner to enforce all other rights and power under this agreement or under law.
10.The owner hereby agrees that so long as the hirer shall perform its obligations under this agreement and this agreement shall be subsisting the hirer shall on payment of the full amount paid by the owner for purchasing the machinery and all charges, expenses, freight, insurance charges, customs duty, State sales tax, Central sales tax, bank charges and all other expenses incurred by the owner in respect of the said machinery plus a margin of 20% have the option of purchasing all the machinery at any time before the entire amount due to the owner has been fully paid. If the hirer shall exercise such option the owner will give the hirer credit against such purchase price to the extent of all payments which have been made by the hirer under the provisions of clauses 3, 4 and 7 hereof, but until such price and expenses and the charges herein mentioned shall have been paid in full, the machinery shall remain absolutely the property of the owner. The hirer shall in addition pay all sales tax that may be payable for such sale and all other amounts due under this clause.
11. The hirer shall at its own expenses transport each machinery equipment or part thereof immediately on arrival thereof at the railway station, steamer ghat, or air port of destination from the said railway station, steamer ghat or air port to its tea garden where the machinery are to be installed and shall within 3 days of each such arrival at railway station, steamer ghat or air port, send intimation in writing by registered post to the owner of such arrival and of the arrangement made by it for such transport. The hirer shall after receipt of the Railway Receipt, Bill of Lading or Air Consignment note in respect of such machinery send written intimation at least once every week as to whether the machinery has reached the railway station, steamer ghat or air port of the destination or not.
12. Within 20 days from the date of receipt of the machinery or any part thereof in the tea garden of the hirer where they are to be installed the hirer shall deliver by registered post a report to the owner about the condition thereof and shall point out therein any defect in the condition thereof. If the hirer fails to deliver such report within 20 days from the date of receipt of each machinery or any part thereof it shall be presumed that the machinery and every part thereof is in good condition and no complaint about the condition of the machinery or any part thereof shall be entertained after the said period of 20 days and the hirer shall be deemed to have waived all objections regarding the machinery and the condition thereof.
13. The manufacturers of all machinery and equipment normally guarantee their products against faulty materials and/or workmanship for a period of six months except in the case of scientific instruments which must be tested immediately on arrival at destination. The guarantee operates from the date of arrival of the machinery or equipment at destination. Items of proprietary manufacture such as electric motors, switch gear, control gear, etc. are guaranteed only by the makers of the equipments. The OWNER does not give any guarantee whatsoever in respect of the machinery or equipment but the hirer shall be entitled to the benefit of the guarantees given by the manufacturers or makers and to enforce the same.
14. All machinery or equipment shall be insured by the supplier in their own name against the following risks viz. theft, pilferage, non-delivery, rain or fresh water damage, breakages and denting, strikes, riot or civil commotion, the cover to begin from the time of despatch and to continue until delivered at final destination. The hirer shall not have any claim against the owner for any loss of or damage to the machinery or equipment.
15. Each machinery after arrival at the tea garden shall be installed therein with reasonable speed and the hirer shall once in every fortnight from the date of such arrival send intimation to the owner about the progress of installation of each machinery until completion of such installation.
16. Erection of driers, withering equipment C.T.C. machine, roller equipment, steam engines, etc. shall be carried out by the manufacturers or suppliers otherwise their guarantee will be voidable.
17. A brass plate showing that the said machinery belongs to the owner company shall be affixed on each machine, the cost, if any, of such plate being borne by the owner and the plate shall not be removed by the hirer so long as the said machinery remain the property of the owner.
18. It shall be lawful for the owner and all persons authorised by it at all times to enter upon the said tea garden/tea factory or any other place where the said machinery may be or believed to be for the purpose of examining the same.
19. The hirer hereby agrees with the owner that until payment of the entire amount due to the owner in the manner herein provided:
20. The machinery shall be kept in good and serviceable order and condition and the hirer shall maintain and protect the same from loss and damage by fire or accident, inundation, pilferage or any other cause whatsoever. The said machinery shall at all times remain at the risk of the HIRER and it shall be liable for all losses and damages thereto howsoever caused.
21. The said machinery and each and every one of them shall be kept in the possession of the hirer at the said Tea Garden/Tea Factory or at such other address as the hirer may by writing authorise free from distress, execution or other legal process whatsoever and the hirer shall on no occasion sell, mortgage, pledge, assign, let or otherwise deal with nor shall the hirer part with possession thereof or any portion thereof.
22. All rents, rates, taxes and other outgoings payable by the hirer in respect of the said tea garden/tea factory shall be fully and punctually paid and discharged by the hirer and the current receipt therefor shall be produced before the owner by the hirer on demand.
23. The machinery shall be used for the purpose of production and manufacture of tea only and for no other purpose whatsoever save with the previous consent of the owner in writing.
24. The machinery and equipment imported from outside India have been obtained by the owner under an Actual Users Licence and it is a condition of this agreement that the HIRER shall observe and perform all the terms and conditions of the Actual Users Licence not only so long as the OWNER remains the OWNER of the said imported machinery and equipment but also after the hirer becomes the owner on full payment of the purchase money and the hirer shall even after becoming the owner use the machinery and equipment solely for the purposes for which the same were purchased and no portion thereof shall be sold or used or permitted to be used by any other person or for any other purpose.
25. It is hereby declared that the owner has entered into this Agreement upon the express declaration by the hirer and hirer hereby expressly warrants that the said tea garden/tea factory in which the said machinery are to be located are free from mortgage, encumbrances, lis pendens and other charges whatsoever except in favour of its Bankers for cash credit facilities.
26. The hirer shall not so long as any money remains due and payable to the owner under the provisions hereof create or purport or agree to create any mortgage or charge on the said tea garden/tea factory or any of the lands and buildings thereof without previous consent in writing of the owner.
27. The hirer shall keep the machinery insured from the date of arrival at destination against damages or loss by fire, accident, pilferage, riot, civil commotion or such of them as the owner from time to time require, in the sum of Rs. 6,00,000 (Rupees six lakhs only) or such less sum as the owner may direct with some insurance office of repute to be approved by the owner in the joint names of the hirer and the owner. The hirer shall duly and punctually pay all premia for such policies of insurance at least 20 days before the same becomes due and shall produce to the owner or to its representatives all receipts for such premia paid on such policies of insurance at least 10 days before the same becomes due.
28. If any machinery or any portion thereof be lost or damaged all moneys received or receivable in respect of the machinery from the Insurance shall be received by the owner who may apply the same either in making good the damage done and/or in replacing the said machinery by other articles of similar description and value and such substituted articles shall become subject to the provisions of these presents in the same manner as the machinery for which they have been substituted. The owner may instead if it so desires apply the money in whole or in part in payment of the amounts payable by the hirer under the provisions of clause 7 hereof whether it has fallen due or not.
29. If the hirer shall make default in punctual payment of any instalment payable under the provisions of clause 7 hereof or any interest due thereunder or goes into liquidation or be wound up or a petition for its winding up is filed or the hirer amalgamates with any company or enters into any composition or a scheme or arrangement with its creditors or any distress or execution is levied or a Receiver is appointed on any of its properties or assets or if the hirer fails to observe or perform any of the terms and conditions herein contained and on its part to be observed and performed then and in any of such cases it shall be lawful for the owner in addition to its other rights and powers hereunder forthwith to terminate this agreement and to forfeit all payments made by the hirer to the owner if any and also to enter upon the said tea garden/tea factory or any other places where the said machinery might be located or believed by the owner or its officer to be located and if necessary to break open any door or locks and to take possession of the machinery and to remove the same without being liable to any action for trespass or otherwise whatsoever. All costs of taking possession and of removal thereof shall be paid by the hirer to the owner.
30. The owner may at its option extend the due date for the payment of any instalment under clause 7 hereof but such extension shall not in any event exceed six months from the date fixed under the said clause. Such extension shall be subject to such terms and conditions as the owner may in its absolute discretion determine, including payment of additional interest at the rate of 2% per month or part thereof for the period of the extension. If the owner shall grant to the hirer any time or indulgence the same shall not affect or prejudice any of the rights or powers of the owner hereunder.
31. In the event of the owner terminating this agreement and taking possession of the machinery for any cause whatsoever the owner shall be entitled to sell the machinery by private treaty or public auction or by any other means at its discretion, and if the net resale proceeds of the machinery fall short of the balance outstanding on the hirer's account the resultant loss shall be made good by the hirer.
32. All rights and powers of the owner hereunder may be exercised by a Director or any other officer thereof authorised by the Managing Director from time to time.
The Schedule
One Kirloskar 50 KW, 72 KVA, 400/230 Volts, 3 phase, 50 cycles, 4 wire, 8 power factor, self-regulating diesel alternator set complete with Model JH 6, tank-cooled, six cylinder in line, vertical cold starting, etc. etc. complete in all respects.
In witness whereof the parties herein have executed these presents on the day, month and year first above-written.
Signed, sealed and delivered by
Mr. pursuant to
Board Resolution dated
of AB Ltd. in the presence of:	
                                                                                                                            Signature 
Signed, sealed and delivered by
Mr. pursuant to
Board Resolution of Darjeeling
Tea Ltd. in the presence of:                                                                               Signature