A Burnt-Out Sewing Machine on Hire Purchase
Meena runs a tailoring unit from one room at home and earns about ₹9,000 a month. In March she bought a sewing machine on hire purchase: cash price ₹18,000, down payment ₹4,000, and 12 monthly instalments of ₹1,350. In July, after four instalments, the motor burnt out during a rush order. The dealer says the warranty covers only the machine head, not the motor, and that she must keep paying the instalments. Her receipt is intact, but the warranty card was never filled in or stamped; the dealer kept it 'for registration'. Her husband wants to stop paying and abandon the machine, fearing a bad credit record. Another dealer offers a new machine for ₹14,000 cash with a one-year warranty. Meena has ₹6,000 in savings and a pending order worth ₹5,000 that needs a working machine within ten days.
1. Work out what the hire-purchase arrangement actually costs her, and explain why the instalment amount alone is the wrong way to judge it.
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Total payable = ₹4,000 + (12 × ₹1,350) = ₹4,000 + ₹16,200 = ₹20,200.
Extra over the cash price = ₹20,200 − ₹18,000 = ₹2,200, about 12.2% of the cash price. On a ₹9,000 monthly income, the instalment is 15% of earnings - affordable only while the machine is earning.
The ₹2,200 is the price of not paying cash; it is not the main problem. The real loss is a machine that is not producing. Each month of breakdown costs the ₹1,350 instalment plus the tailoring income she cannot earn, perhaps ₹3,000–4,000. That is the figure that should drive the decision, and it argues for solving the problem in days, not months.
2. Evaluate her three realistic options - repair, abandon, or buy the ₹14,000 machine - and state the sequence you would advise.
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- Abandon and stop paying. Worst option. Under hire purchase, ownership passes only on the last instalment; the dealer can repossess the machine and she loses the ₹4,000 down payment and ₹5,400 already paid, plus the pending order and possibly her credit record. Reject.
- Have the motor rewound locally (roughly ₹1,200–1,500) and claim the cost. Fastest route. Restores earning within days and protects the ₹5,000 order. Keep the burnt-out motor and a written repair bill as evidence. Recommended as the immediate step.
- Buy the ₹14,000 machine using ₹6,000 savings. She would still owe the old instalments and take on new debt on one income. Sensible only if the dealer agrees in writing to cancel the old contract.
Advised sequence: repair now → written complaint to the dealer claiming repair cost and compensation → continue instalments under written protest so that the default is his, not hers.
3. Explain her consumer rights in this situation, the correct forum and time limit, and how much the unfilled warranty card matters.
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Rights: as a consumer she can claim repair, replacement or compensation for a defect present at supply, and can allege unfair trade practice if warranty terms were withheld. The hire-purchase format does not remove these rights; it only affects when ownership passes.
The warranty card: its being unfilled does not destroy her claim. The receipt proves purchase and date. The dealer, who kept the card, cannot benefit from his own omission. The burden is on him to show misuse rather than manufacturing defect.
Forum and time limit: the value is small, so the District Consumer Commission (claims up to ₹50 lakh). The complaint must be filed within two years of the cause of action. She can file online through e-Daakhil, in the local language, attaching the receipt, repair bill and any messages.
Practical step: send a written notice giving the dealer 15 days to settle. Most such disputes end at the notice stage, which is cheaper and faster than a hearing.