- Date : 27/06/2020
- Read: 5 mins
We often overlook the bureaucratic hurdles when selling a car. But here's why you need to pay careful attention to the process and its legal requirements.
Few things can surpass the joy one feels when buying a new car. You suddenly feel very grown up, and more importantly, it’s a sign that you’re moving ahead in your career and your life. Well, at least that’s what I felt at the time.
After a few years, I felt it was time to ‘trade up’. I was married, my wife and I were about to become parents for the first time, and I’d got a new job, which also meant moving cities. In the madness that followed – packing, selling our car, moving, changing bank accounts, finding accommodation for our soon-to-be-family, buying a new car, settling into a new city etc. – it’s easy to overlook a few things.
Most of the things one overlooks don’t really have much of a fallout, except for increasing the time spent in jumping through bureaucratic hoops. But I soon found that the one aspect one should not overlook is completing the paperwork necessary for transferring car ownership.
A junior colleague of mine had his eye on my car, and when I told him he was in luck, he was overjoyed. To me, it was a simple matter of cashing the cheque he gave me, exchanging letters saying he was the new owner, and handing over the keys and vehicle documents to him. I remember breathing a sigh of relief then as it was one less thing to take care of.
Consequences
Little did I know the consequences of our friendly transaction. Late one evening, my friend was stopped at a regular nakabandi that the Mumbai police frequently conduct. I always thought this initiative was a great idea – though enforcement was often patchy, the action was real. And it did have a marked effect in reducing the amount of drunken driving cases in the city, though many still took a chance.
The next day my friend called me in a panic. He had been booked for the offence of drink and drive but said that I too was in trouble as the car was still registered in my name. In the game called life, he had neglected to make the necessary changes on the registration certificate, and as far as the police – and the law – was concerned, I was still the owner of the car.
Although the police were sympathetic to our circumstances, the reality was that my friend and I hadn’t complied with the procedures, and the long arm of the law had us both ensnared. This was the last thing I needed. My wife and I had just become parents to a beautiful baby girl, and like all first-time parents, we were struggling with the requirements of bringing up a new-born.
Fortunately for me, my brother-in-law proved to be our saviour! He’s a lawyer in Mumbai, and though his area of expertise is real estate, he had good connections, and that’s when I found out that if any person who sells their car doesn’t bother to change the ownership in the registration records, the original owner is liable for compensation claims arising from situations involving the vehicle, even if another person owns and drives the car.
Related: Bought a new car? Here’s what you need to do next.
Legal aspects
This comes from the highest court in the land, no less, when the Supreme Court ruled, “In a situation where the registered owner has purported to have transferred the vehicle but continues to be reflected in the records of the registering authority as the owner of the vehicle, he would not stand absolved of liability.” The Court went on to say, “A claimant for compensation ought not to be burdened with following a trail of successive transfers, which are not registered with the registering authority. To hold otherwise would be to defeat the statutory object and purpose of the Act.”
Related: Things to keep in mind when buying a used car
Motor Vehicles Act 1950
According to the Indian Motor Vehicles Act 1950, the transferor has to intimate the appropriate Regional Transport Office (RTO) within 14 days of the transfer of ownership. The Act also instructs the transferee to inform the RTO about the change in vehicle ownership, and produce all the required documents within 30 days of the transfer.
As my brother-in-law told me, traffic police officials said they have no option but to seize the vehicle; the person named in the RC book will be sent notices and held responsible if the vehicle is involved in any incident. Can you imagine the trouble I might have got into if the incident was more serious? I still shudder at the thought.
Related: Checklist for buying/selling a second hand car
Fortunately for me, with the help of my brother-in-law, my friend, and – it has to be said – the traffic police, the matter was sorted out, but not without some serious heartburn, sleepless nights, and some I-told-you-so looks from my wife. The last was, of course, the most difficult to deal with!
I learnt my lesson, but for the many out there who tend to ignore the necessary bureaucratic ‘hurdles’, do so at your own risk. The process for transfer of ownership of a vehicle is pretty straightforward, so just take a few extra minutes and do what’s necessary.
Related: Taking a car loan vs buying a second-hand car
Related: How to maximise the resale value of your used car
Modification of a car
Finally, and even though it didn’t apply to me, I was also made aware that if you change the colour or modify the car in any manner, it is your responsibility to ensure the RC book is updated accordingly. And if you’re planning to sell your car as scrap, you need the permission of the RTO, to whom you must also surrender the RC book.
To those out there looking to sell their existing vehicle – forewarned is forearmed! Follow the procedures laid down and you can enjoy the car you’re driving now, with nary a thought – except fond ones – of the car you used to drive.
Few things can surpass the joy one feels when buying a new car. You suddenly feel very grown up, and more importantly, it’s a sign that you’re moving ahead in your career and your life. Well, at least that’s what I felt at the time.
After a few years, I felt it was time to ‘trade up’. I was married, my wife and I were about to become parents for the first time, and I’d got a new job, which also meant moving cities. In the madness that followed – packing, selling our car, moving, changing bank accounts, finding accommodation for our soon-to-be-family, buying a new car, settling into a new city etc. – it’s easy to overlook a few things.
Most of the things one overlooks don’t really have much of a fallout, except for increasing the time spent in jumping through bureaucratic hoops. But I soon found that the one aspect one should not overlook is completing the paperwork necessary for transferring car ownership.
A junior colleague of mine had his eye on my car, and when I told him he was in luck, he was overjoyed. To me, it was a simple matter of cashing the cheque he gave me, exchanging letters saying he was the new owner, and handing over the keys and vehicle documents to him. I remember breathing a sigh of relief then as it was one less thing to take care of.
Consequences
Little did I know the consequences of our friendly transaction. Late one evening, my friend was stopped at a regular nakabandi that the Mumbai police frequently conduct. I always thought this initiative was a great idea – though enforcement was often patchy, the action was real. And it did have a marked effect in reducing the amount of drunken driving cases in the city, though many still took a chance.
The next day my friend called me in a panic. He had been booked for the offence of drink and drive but said that I too was in trouble as the car was still registered in my name. In the game called life, he had neglected to make the necessary changes on the registration certificate, and as far as the police – and the law – was concerned, I was still the owner of the car.
Although the police were sympathetic to our circumstances, the reality was that my friend and I hadn’t complied with the procedures, and the long arm of the law had us both ensnared. This was the last thing I needed. My wife and I had just become parents to a beautiful baby girl, and like all first-time parents, we were struggling with the requirements of bringing up a new-born.
Fortunately for me, my brother-in-law proved to be our saviour! He’s a lawyer in Mumbai, and though his area of expertise is real estate, he had good connections, and that’s when I found out that if any person who sells their car doesn’t bother to change the ownership in the registration records, the original owner is liable for compensation claims arising from situations involving the vehicle, even if another person owns and drives the car.
Related: Bought a new car? Here’s what you need to do next.
Legal aspects
This comes from the highest court in the land, no less, when the Supreme Court ruled, “In a situation where the registered owner has purported to have transferred the vehicle but continues to be reflected in the records of the registering authority as the owner of the vehicle, he would not stand absolved of liability.” The Court went on to say, “A claimant for compensation ought not to be burdened with following a trail of successive transfers, which are not registered with the registering authority. To hold otherwise would be to defeat the statutory object and purpose of the Act.”
Related: Things to keep in mind when buying a used car
Motor Vehicles Act 1950
According to the Indian Motor Vehicles Act 1950, the transferor has to intimate the appropriate Regional Transport Office (RTO) within 14 days of the transfer of ownership. The Act also instructs the transferee to inform the RTO about the change in vehicle ownership, and produce all the required documents within 30 days of the transfer.
As my brother-in-law told me, traffic police officials said they have no option but to seize the vehicle; the person named in the RC book will be sent notices and held responsible if the vehicle is involved in any incident. Can you imagine the trouble I might have got into if the incident was more serious? I still shudder at the thought.
Related: Checklist for buying/selling a second hand car
Fortunately for me, with the help of my brother-in-law, my friend, and – it has to be said – the traffic police, the matter was sorted out, but not without some serious heartburn, sleepless nights, and some I-told-you-so looks from my wife. The last was, of course, the most difficult to deal with!
I learnt my lesson, but for the many out there who tend to ignore the necessary bureaucratic ‘hurdles’, do so at your own risk. The process for transfer of ownership of a vehicle is pretty straightforward, so just take a few extra minutes and do what’s necessary.
Related: Taking a car loan vs buying a second-hand car
Related: How to maximise the resale value of your used car
Modification of a car
Finally, and even though it didn’t apply to me, I was also made aware that if you change the colour or modify the car in any manner, it is your responsibility to ensure the RC book is updated accordingly. And if you’re planning to sell your car as scrap, you need the permission of the RTO, to whom you must also surrender the RC book.
To those out there looking to sell their existing vehicle – forewarned is forearmed! Follow the procedures laid down and you can enjoy the car you’re driving now, with nary a thought – except fond ones – of the car you used to drive.
