2022 accident case exposes gaps in RC transfer system

A road accident involving a commercial ‘Gramin Sewa’ vehicle in Delhi has exposed glaring loopholes in India’s vehicle ownership transfer system after the vehicle changed hands multiple times without the Registration Certificate (RC) being updated.  
 
The issue came into focus after a Delhi Motor Accident Claims Tribunal flagged the case in an order dated May 12 while deciding a compensation claim arising from a 2022 accident involving the uninsured vehicle. 
 
In the order, Judge Dr. Abhilash Malhotra questioned how a ‘Gramin Sewa’ vehicle, whose permit is issued only after due diligence in the name of the registered owner, could change hands multiple times without the RC records being updated.  
The tribunal noted that the vehicle was first sold by the registered owner to another person, who subsequently sold it again before it eventually came into the possession of a third owner. Despite the successive transactions, the RC records were never updated. 
Calling the situation alarming, the tribunal said the transactions violated Section 50 of the Motor Vehicles Act, 1988, which mandates that transfer of vehicle ownership be formally recorded with transport authorities within the prescribed period. 
The tribunal also questioned why transport authorities failed to detect ownership discrepancies during permit renewals and annual fitness certification, particularly for commercial vehicles that operate under stricter regulatory requirements. 
“There is an urgent need to plug these loopholes,” the tribunal observed, directing the Delhi Police and the State transport authority to deliberate on policy measures and evolve a mechanism for sharing information on unauthorised vehicle sales. 
Outdated and inconsistent framework  

According to an independent CRISIL report published in July 2025, sales of used cars in India are expected to cross six million units. However, the case has renewed attention on delays and failures in RC transfers. 
Under the existing legal framework, liability for a vehicle remains with the person whose name appears on the RC, irrespective of whether the vehicle has been sold. As a result, failure to record ownership transfers can leave the original owner exposed to liabilities arising from accidents, traffic violations or criminal misuse of the vehicle. 
Yashvardhan Verma, Head of Public Policy and Corporate Affairs at Cars24, told The Hindu that widespread delays in RC transfers and the absence of uniform national standards continue to plague the system. 
 
Mr. Verma said neither the Central Motor Vehicles Rules (CMVR) nor most State regulations prescribe fixed timelines for registering authorities to complete RC transfers or other RTO services, resulting in prolonged delays and legal uncertainty for buyers and sellers.  
Citing industry data, including that of Cars24, he said fewer than 70% of RC transfers are completed even within 60 days, while several cases take years, leaving sellers vulnerable during the intervening period. 
Security concerns  
In December last year, the Delhi High Court questioned the Delhi government over its failure to regulate the sale and transfer of used vehicles, while referring to the use of a second-hand car in the bomb blast near the Red Fort. 
 
“A car changes four hands but the original owner has not changed. Therefore, what happens? That man (the original owner) goes to the slaughterhouse? What is this? How are you permitting this? You will take a call when two-three more bomb blasts take place?” the court had asked the Delhi government’s counsel. 
 
The car used in the blast on November 10, 2025, had changed hands multiple times, but the changes were not reflected in the official records. 
 
Mr. Verma also flagged law enforcement concerns, saying vehicles with incomplete ownership transfers are often exploited for illegal activities. 
He further pointed to non-standardised documentation requirements as another major hurdle in RC transfers. “The list of documents required for most RTO services is generally codified in the CMVR or State motor vehicle rules. However, most RTOs still routinely demand additional documents at the time of the visit,” he said.