law: Hire-Purchase Act, 1972
  7. Limitation of hire-purchase charges.-
  (1) In this section:-
  (a) "Cash price
  
  installment", in relation to a hirer-purchase installment, means an amount
  
  which bears to the net cash price the same proportion as the amount of the
  
  hire-purchase installment bears to the total amount of hire-purchase price.
  (b)
  
  "Deposit" means any sum payable by the hirer under the hire-purchase
  
  agreement by way of deposit or other initial payment or credited or to be
  
  credited to him under the agreement on account of any such deposit or payment
  
  whether that sum is to be or has been discharged by payment of money or by
  
  transfer or delivery of goods or by any other means.
  (c) "Net cash
  
  price" in relation to goods comprised in a hire-purchase agreement, means
  
  the cash price of such goods as required to be specified in the hire-purchase
  
  agreement under clause (b) of sub-section (1) of section 4, less any deposit as
  
  defined in the clause (b).
  (d)
  
  "Net-hire-purchase charges" in relation to a hire-purchase agreement
  
  for any goods, means the different between the net hire-purchase price and the
  
  net cash price of such goods.
  (e) "Net
  
  hire-purchase price" in relation to goods comprised in a hire-purchase
  
  agreement, means the total amount of hire-purchase price of such goods as
  
  required to be specified in the hire-purchase agreement under clause (a) of
  
  sub-section (1) of section 4 less.
  (i) any amount which
  
  in payable to cover the express of delivering the goods or any of the them to
  
  or the order of the hirer and which is specified in the agreement as included
  
  in the hire-purchase price.
  (ii) any amount which
  
  is payable to cover registration or other fees under any law in respect of the
  
  goods or the agreement or both and which is specified in the agreements as
  
  included in the hire-purchase price, and
  (iii) any amount which
  
  is payable for insurance (other than third party insurance) in respect of the
  
  goods and which is specified in the agreement as included in the hire-purchase
  
  price.
  (f) "statutory
  
  charges" in relation to hire-purchase agreement, means the aggregate of
  
  the amounts calculated in accordance with the provisions of sub-section (2) as
  
  statutory charges in respect of each of the cash price installments
  
  corresponding to each of the hire-purchase installments under the agreement.
  (2) The statutory charges, in respect of a
  
  cash price installment, shall be an amount calculated at the rate of thirty per
  
  centum per annum or, if a lower rate is specified under sub-section (3) as such
  
  lower rate, in accordance with the following formula :-
  Cl x RxT
  SC = ____________
  100
  Where SC.- represents the statutory charges,
  C!,- represents the amount of cash price
  
  installment expressed in rupees fractions of rupees
  R.- represents that rate, and
  T,- repress the time, expressed in years and
  
  fractions of years, that elapses between the date of the agreement and the date
  
  on which the hire-purchase installment corresponding to the cash price
  
  installment is payable under the agreement.
  (3) The Central Government may, by
  
  notification in the Official Gazette, and after consultation with Reserve Bank
  
  of India, specify the rate per centum per annum, being a rate which shall not
  
  be less than ten per centum per annum, at which statutory charges may be calculated
  
  under sub-section (2) and different rates may be so specified in respect of
  
  hire-purchase agreements relating to different classes or sub-classes of goods.
  
  
  Where the net hire-purchase charges in
  
  relation to a hire-purchase agreement exceed the statutory charges in relation
  
  to such agreement calculated in accordance with the provisions of sub-section
  
  (2), the hirer may notice in writing to the owner, either elect to treat the
  
  agreement as void or to have his liability reduced by the amount by which the
  
  net hire-purchase charges exceed the statuary charges aforesaid.
  Where a hirer elects, in accordance with the
  
  provision of sub-section (4), to treat the hire -purchase agreement as void,
  
  the agreement shall be void and the amount paid or provided whether by cash,
  
  cheque or other consideration by or on behalf of the hirer in relation to the
  
  agreement shall be recoverable by the hirer as a debt due to him by the owner.
  Where the hirer elects have his liability
  
  reduced by the amount referred to in sub-section (4), his liability shall be
  
  reduced by that amount and that amount may be set off by the hirer against the
  
  amount that would otherwise be due under the agreement and, to the extent to
  
  which it is not so set off, may be recovered by the hirer as a debt due to him
  
  by the owner.