Judgment K. Ahmad, J. 1. This appeal is by defendant No.1. It arises out of a suit brought for recovery of Rs.2271/- as the balance of the hire purchase money due from 16th February to the 3rd of June 1952, The facts involved in this case which are now admitted are shortly as follows. 2. There was a contract of hire purchase entered into between the plaintiff on one side and defendant No.1 on the other relating to a Ford Prefect Car of 1951 Model. The contract of hire purchase is Ext.2 on the record and it is dated the 10th September, 1961. The total price of the Car, as stated therein, is Rs.10,582/-. Out of this total consideration Rs.200/- was paid at the time of the execution of the contract. The balance of the money was to be paid as the hire amount for the car in instalments. The first instalment of Rs.641/- was paid on 15-10-51 and thereafter subsequent instalments were paid at the rate of Rs.631/- on the 15th of every month up to 15th. February, 1952. Unfortunately, thereafter, there were defaults made in the payment of the instalments as stipulated in the hire purchase contract with the result that on 3-6-52 the car was seized under one of the terms stipulated in the hire purchase contract. On 23-11-53 the present suit was brought for recovery of Rs.2271/- as the balance of the hire purchase instalments due from 16th February to 3rd June, 1952. It is said that in the meantime the plaintiff after the seizure of the car, sold it to some third party for certain consideration, but the exact amount of that consideration is not known so far as this record is concerned. 3. The main defence pleaded was that apart from the contract of hire purchase, as stipulated in the aforesaid document (Ext.2) there was an oral agreement between the parties whereunder the plaintiff had agreed to tell the car and to adjust the price towards the balance of the instalment money and to refund the balance of the sale proceeds to him. Both the courts below have concurrently negatived the defence case and decreed the suit. Hence this appeal by defendant No.1. 4. Mr. Both the courts below have concurrently negatived the defence case and decreed the suit. Hence this appeal by defendant No.1. 4. Mr. B. C. De appearing for the defendant appellant has in support of this appeal, pleaded reliance on Sec.74 of the Indian Contract Act, 1872 , and has submitted that the stipulation made in the contract of hire purchase for the payment of the arrears of the instalments left unpaid without any set off of its price after seizure towards the instalment due is by way of penalty and as such the appellant is entitled to a relief by the Court under the provision of the aforesaid section. In pupport of this contention reliance has been placed by learned counsel on a decision of the Rangoon High Court in the case of Maung Ba Oh V/s. Motor Mouse Co. Ltd. , AIR 1929 Rang 368 and on a decision of this court in the case of S, S. Pal V/s. D. Gorain, ILR 31 Pat 280: ( AIR 1952 Pat 271 ). This takes us to the question whether a contract of hire purchase of the category we have before us is at all attracted by Sec.74 of the Contract Act or the rules of equities. Now, before I go into this question, it is I think necessary to bear in mind as to what a hire purchase contract means. In law it is well established that hire purchase is a system whereby the owner of goods lets them on hire for periodic payments by the hirer upon an agreement that when a certain number of payments have been completed the absolute property in the goods will pass to the hirer, but that the hirer may return the goods at any time without any obligation to pay any balance of rent accruing after return until the conditions have been fulfilled, the property remains in the owner. In this connection my attention had been drawn on behalf of the appellant to an observation made in the case of Damodar Valley Corporation V/s. State of Bihar, 1961 BLJR 595: ( AIR 1961 SC 440 ). In this connection my attention had been drawn on behalf of the appellant to an observation made in the case of Damodar Valley Corporation V/s. State of Bihar, 1961 BLJR 595: ( AIR 1961 SC 440 ). Therein it has been observed as follows: "it is well settled that a mere contract of hiring without more, is a species of the contract of bailment, which does not create a title in the bailee, but the law of hire purchase has undergone considerable development during the last half century or more and has introduced a number of variations, thus leading to categories and it becomes a question of some nicety as to which category, a particular contract between the parties comes under, Ordinarily a contract of hire purchase confers no title on the hirer, but a mere option to purchase on fulfilment of certain conditions. But a contract of hire purchase may also provide for the agreement to purchase the thing hired by deferred payments subject to the condition that title to the things shall not pass until all the instalments have been paid. There may be other variations of contract of hire purchase depending upon the terms agreed between the parties. " Relying on this observation made in that case submission has been made before me that on the facts of this case the court below should have found as to what was the category of the contract of hire purchase made in tills case. Unfortunately, no such case was set up in either of the two courts below. On the contrary, the only defence pleaded was that subsequently there was an oral agreement made between the parties whereunder the plaintiff had agreed to sell the car and to adjust the price towards the balance of the instalment money and to refund the balance of the sale proceeds to him. This defence, on the very face of it, presupposes that originally the contract between the parties was one of simple hire purchase whereunder the title in the property of the car was not to pass to the appellant and was to remain in the plaintiff until all the instalments as undertaken under the hire purchase contract was paid. This defence, on the very face of it, presupposes that originally the contract between the parties was one of simple hire purchase whereunder the title in the property of the car was not to pass to the appellant and was to remain in the plaintiff until all the instalments as undertaken under the hire purchase contract was paid. That being so, it cannot be said that in the present case the property in the car had ever passed to the appellant and that after its seizure effected on 3-6-52 on the default made in the payment of the hire purchase instalment, there was any claim of the appellant left in the car. That being so, once the defence case as, to the subsequent oral agreement is disbelieved, as has been disbelieved by both the courts below, I there is nothing left on the record to give support to the claim of the appellant that the price of the car seized from him should have been set off as against the hire instalments which were still left due against the appellant relating to the period from 16th February, to 3rd June, 1952 or that the balance, if any, that was left thereafter should have been paid to him. This, therefore, disposes of the claim of the appellant on the ground, that the category of the hire purchase contract in the present case was any way different to the contract of bailment. 5. Then so fur as the submission made by Mr. De on the footing of the provision under Sec.74 of the Contract Act is concerned, that, as already stated above, raises the question whether a con tract of a simple hire purchase form is attracted by Sec.74 of the Contract Act or by the rules of Equities or not. It is true that Brown J. while dealing with this question in the case reported in AIR 1929 Rang 368 has observed: "now, the agreement in the present case is on the face of it an agreement to hire with an option of purchase but, as pointed out in the Upper Burma Case of Singer Manufacturing Co. It is true that Brown J. while dealing with this question in the case reported in AIR 1929 Rang 368 has observed: "now, the agreement in the present case is on the face of it an agreement to hire with an option of purchase but, as pointed out in the Upper Burma Case of Singer Manufacturing Co. V/s. Elahi Khan, 2 Upp Bur Rul 291 at p.294: in construing a contract it is, of course the duty of the court to look not merely at the surface and form but also into the heart of the matter and to ascertain its true meaning and the actual intention of the parties. Although the agreement is in form one of hire the object of the parties in drawing up the agreement was to enter into a contract for sale providing at the same time security to the seller for due payment of the purchase price. " But it seems that on the facts of that case the contract of hire purchase was not a simple hire purchase contract but there was also along with it some sort of agreement For the purchase of the property. This is evident from the view taken about this decision in the cases of Abdul Quadeer V/s. Watson and Sons Ltd. , ILR 8 Rang 236: (AIR 1930 Rang 193); S. S. Tiwari V/s. Remington Rand Incorporated, AIR 1934 Nag 151 and Nathulal Ramprasad V/s. Balkrishna Jugalkishore (S) AIR 1955 Nag 269. In all these three cases the aforesaid decision as reported in AIR 1929 Rang 368 has been distinguished on the ground that the facts involved therein were different and that was not a ease of simple hire purchase contract. In the ease reported in AIR 1934 Nag 151, it has been observed as follows: "it is clear from col.2 of the agreement, by which the hirer is entitled to put an end to the contract by return of the machine at any time, forfeiting former payments, that it is a contract for hire purchase and not a contract for sale--Lee V/s. Butler (1893) 62 LJQB 593 and Helby V/s. Mathews (1895) 64 LJQB 465. The learned Judge of the Court of Small Causes has accordingly correctly applied the reasoning advanced in Auto Supply Co. The learned Judge of the Court of Small Causes has accordingly correctly applied the reasoning advanced in Auto Supply Co. Ltd. V/s. Raghunath Chetty, AIR 1929 Mad 884 and there is nothing illegal or in quitable in the company enforcing its rights on the contract to recover the arrears of the instalments while recovering the machine at the same time. The fact that the company was fortunate enough to recover the machine in the course of the criminal case against Gideon and sell it in no way affects their right to recover the amount due for the hire of the machine, if the machine had not been recovered, they would under Clause 7 of the agreement have been entitled to recover the value of the machine at the time of the wrongful conversion of it by Gideon allowing for depreciation. Once the machine was in their possession, whether it was handed over by the hirer or recovered otherwise, it was the companys property to be disposed of by them as they wished and such disposal can have no bearing whatever on the arrears which are arrears for hire and not instalments of the purchase money in respect of a purchase which the hirer was bound to fulfil. The ruling in AIR 1029 Rang 368 has been cited on behalf of the applicant. "the facts in that case were in no way comparable with the facts of the case before me. In that case a Motor truck had been partly paid for and when the purchaser was unable to pay the balance, he entered into an agreement with the company; that agreement was held to be an agreement for sale and not an agreement for hire purchase. The terms of the agreement were that the balance of the money was to be paid in nine monthly instalments and that if the hirer should make any default in monthly payment, the whole sum remaining unpaid was to become due and payable forthwith and the company to have the right to take possession of the truck. There was no question, as in the case before me, of the forfeiture of previous instalments; it was of the right to seize the truck and to claim the whole of the balance due under the agreement. It was this stipulation which was held to be penal. There was no question, as in the case before me, of the forfeiture of previous instalments; it was of the right to seize the truck and to claim the whole of the balance due under the agreement. It was this stipulation which was held to be penal. Here there is no question of claiming the whole amount which was eventually to be paid, but only of the recovery of the previous instalments which constituted rent for the use of the machine. It follows that there is no question of any penalty or of the application of Sec.74 of the Contract Act. " The same is the view taken in the two other cases, namely, ILR 8 Rang 236: (AIR 1930 Rang 193) and (S) AIR 1935 Nag 269. In the last case the learned Judge while dealing with this ease has observed: "the terms and the conditions attached to the agreement from (Ex. D 14) give an unqualified option to the plaintiffs to terminate the hiring by returning the vehicle to the owner at any time. Conditions 4 and 5 provide that until the exercise of the option to purchase the plaintiffs were to hold the vehicle as bailees of the owner without any property or interest as purchaser therein and that in the event of default in observing the conditions of the agreement the owner was to be entitled to terminate the contract of hiring and forthwith retake and recover possession of the vehicle. " "it is thus clear, that the transaction between the parties was at the inception one of hire with the option to purchase at the end. The property in the truck did not pass to the plaintiffs merely on the execution of the agreement the provision enabling the owner to resume possession on default in payment is enforceable, if the agreement is bona fide hire purchase agreement and equity, will not release the hirer from the effect of his default, even if nearly all the instalments have been paid and the arrears are tendered before action brought, the provision not being in the nature of the penalty: Halsburrys Law of England Hailsham, Vol.16, Para 778" in fact, the leading case on the subject is the case of 1895 A. C.471. There in, one of the Noble Lords while delivering the judgment observed: "apart from the arrangement for hire of the piano, the only right given to Browster by the agreement in question was the option to become a purchaser. It is true that whilst he was under no obligation to buy, the appellant was legally bound to give him that option, and could not retract it, if the other stipulations of the contract were duly observed by the hirer. But the possession of such a right of option was, in no sense an agreement by Brewster to buy the piano; and the appellants obligation to give the option was not, in the sense of law an agreement by him to sell, In order to constitute an agreement or sale and purchase, there must be two parties who are mutually bound by it. From a legal point of view the appellant was in exactly the same position as if he had made an offer to sell on certain terms, and had undertaken to keep it open for a definite period. Until acceptance by the person to whom the offer is made, there can be no contract to buy. So long as the agreement stood unaltered there could, in this case, be no contract to purchase by Brewster until he had complied with the terms of the option given him, and had duly made the thirty-six monthly payments which it prescribes as the condition of his becoming owner of the piano. " Looked at, therefore, from the law, as laid down in these decisions, it is clear that on 3-6-52, when the car was seized the appellant had defaulted in making payments of the instalments money as undertaken under the hire purchase contract, and therefore, it was open to the plaintiff to seize the car and deal with it as his own property and at the same time to sue the appellant for the recovery of the instalments that were -still left unpaid up to the date of seizure. For these reasons I think that in a case like this there is no scope cither of the operation of the principle enunciated in Sec.74 of the Contract Act or any principle of equity in order to give any relief to the hirer. The appeal is, therefore, dismissed, but in the circumstances of the case there will be no order as to costs.