Delhi Transport Dept tells Dealers to stop "Handling Charges" SCAM

[tanwaramit]

I am not sure if this is covered here, but following a PIL by one person in the court, the Delhi Transport Dept has asked dealers in Delhi to stop charging incidental charges on purchase of new vehicle and also asked buyers to stop paying for that.

Worthful of sharing with BHPians who are getting deliveries for their vehicles.

Link to the earlier article here - Fleecing by car dealers, notice to transport dept - Hindustan Times

Notice by the ministry was printed on HT - 31st Dec 2011. p19

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Delhi Transport Dept Notice.pdf

Also, here's a great post from Vijayraj:

Originally Posted by Vijayraj1890

The Supreme Court of India on the 20th of April, 2012 has issued a directive to car dealers striking down and handling charges the dealers charge over and above the amount required to register the vehicle.

This means that if you find any fishy or illogical amount in your final bill, you have the right to ask what its for and refuse to pay if it is over and above the registration charges already mentioned to you.



HISTORY:
In the year 1996, an amendment was made to the Delhi Motor Vehicles Rules which authorized Car dealers to register the cars for the convenience of the general public. The rule clearly stated that the dealers are not to charge the customers A SINGLE RUPEE over and above the amount it takes to register the vehicles. The dealers are required to issue and undertaking to the Government of India saying that they will not charge anything more that the price of the vehicle, registration charges and road tax.

However, just like a lot of other things in our beloved country this is not followed and dealers easily demand an extra sum of money disguised in the form of "Misc charges", "Holding Charges", "Handling Charges" etc.
This has been going on for years and the lack of any mechanism to deal with such cases has left customers with no choice but to bite the bullet and pay whatever the dealer asks them to. Hence a PIL was filed challenging this practice.


The million dollar question:-

Where does this money go?

Good Question, the dealer is already making money by selling you the car, why would he charge a measly (compared to the price of the car) sum over and above the registration?

What Dealers Unofficially Claim:-
The unofficial answer to this question is that the Officers in the Transport and Registration departments take money from the dealers to "ensure a smooth process". This amount is passed over to the customers. Well, at least that's what the dealers unofficially claim. Whether this is true or not, you be the judge.

What Dealers Officially Claim:-
According to an article in the Times of India, dated January 5th, 2012; an association od dealers in Delhi approached the Delhi High Court. The court then asked them to file a counter affidavit in response to the PIL in which they stated that the dealers are charging the registrants only the registration fee, road tax and municipal parking charges (supra); that the handling charges / logistic charges which is in violation of their undertaking given to the Government of India is not related to registration of vehicles but are towards stockyard services / warehousing charges, driving costs in terms of fuel consumed and people engaged, fuel given following delivery, transit risk insurance from stockyard to dealer's showroom, polishing and / or waxing and towards other handling costs and have nothing to do with the collection by the said dealers of the registration fee, road tax and municipal parking charges.


The Supreme Court Held:-

"The position which emerges is that while the petitioner avers that the 'extras' so charged by the dealers are for providing the services of registration and which the dealers are not entitled to charge, the dealers deny the extras to be on account of providing the services of registration and claim the same to be on other accounts. The respondents No.1&2 as aforesaid have no authority to intervene in the charge by the dealers even if illegal of the said extras so long as they are not on account of commission or for providing service of registration. The said question thus becomes a question of fact to be adjudicated on a case to case basis and no general direction with respect thereto can be issued in this public interest litigation. The petitioners who are themselves advocates have of course demonstrated that upon the petitioners issuing legal notice in this regard a particular dealer has refunded the amount so claimed but the same cannot be indicative of any illegal practice being followed and cannot lead to a general direction. It is well nigh possible that considering the meager amount involved, that particular dealer may not have wanted to battle with an advocate and chose to refund the amount."

"We accordingly dispose of this writ petition with the direction that in the event of the respondents No.1&2 Transport Department / GNCTD receiving any complaint of any vehicle dealer charging anything extra / commission from the vehicle purchaser for providing the services of registration, the respondents No.1&2 shall enquire into the said complaint and if find any merit therein, shall take action in accordance with law against such vehicle dealers."


The Situation as of Today:-

This judgment did not receive as much publicity as the judgment on tints. However, the dealers are now telling their customers that the matter is still pending in the Supreme Court and they have to pay handling charges.

This happened with my uncle when he went to take delivery of his W8 Mahindra XUV 500 from a dealer in Delhi. The dealer was shown the judgment and they did not charge any Handling Charges which they were claiming before.


FYI:-

What exactly are Handling Charges?
The handling charges were levied by dealers for transferring the vehicles between the office of the transport department and the dealer offices, as well as for keeping the vehicle in the dealer's property till it was picked up by the customer.

What is a PIL?
http://en.wikipedia.org/wiki/Public-...igation_(India)

The Supreme Court Judgment:-
% C. Rajaram, Advocate & Anr vs Gnct Of Delhi & Ors on 20 April, 2012

An article in the Times of India:-
Government to car dealers: Waive handling charges - Times Of India


Fine Print:-
All contents of this post above are in exercise of my Right to Freedom of Expression granted and guaranteed to me by Article 19 of the Constitution of India. The content above is cited from credible and official sources of the Government of India and the Press available to every citizen on the Internet.
The contents above are in accordance with Clause (2) of Article 19 of the Constitution of India which imposes reasonable restrictions to the Right to Freedom of Speech and Expression in the instance of public order,decency and morality, security of the State, Sovereignty and Integrity of India and defamation.
The views above are mine personally and in accordance of the posting privileges granted to me by Team-BHP.com and do not necessarily reflect the views of Team-BHP.com, its members and/or administrators.

[ms001]

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[lancer_rit]

Sounds a good move, if it actually ends up reducing bribes at RTO, and also the dealer making some extra bucks. I think we as consumers, need to push the dealers to have any chance of success ...

[condor]

That amount is charged even if the registration is standard -with out special numbers etc. And it is the case no matter what's the price of the car you are purchasing. So the more expensive the car you buy, the more money the dealer makes.

[Jidousha]

This is good news and hope the new car buyers are aware of this and use it to their advantage while negotiating with the dealers.
It is very surprising that the auto companies who are actually responsible for appointing and managing their dealers are keeping silent and maintain "close eyes" policy.
There seems to be a larger gang who is thriving on this money

[mahadev_kc]

Good step in the right direction.

Actually when I bought Palio, I asked them to reduce it, as I'd made only temp registration, so they reduced from 3500/- to 800/- only.

Then when buying YAMAHA FZS, I asked the dealer and he says 'sir, if you go to any showroom/dealer in bangalore, they will charge this money and you have to pay it.'

It is a daylight robbery and also dealer cartel which is making customer to pay. Hope this order should make the each state goverment wake up and issue such notice.

[drmohitg]

Hi,

I came across this interesting piece of news today in Times of India. The Government has directed the car dealers to waive off the Handling charges levied by them. This is not pemitted by Law but till now the RTO was not strict regarding the enforcement but not have finally sent a directive to all dealers regarding the same. Here is the complete new article:

Government to car dealers: Waive handling charges - The Times of India

I think this is a welcome move since these charges vary hugely from dealer to dealer and there is no consistency or transparency in it. Buying a Car is just like buying any other commodity and the Dealer should bear the handling costs.

[shankar.balan]

This is a good initiative.

I support this completely. Dealers charge bombs of money for their handling charges which "break-up" is completely "opaque".

They also charge extra for the Number that one may want to total up to some lucky number etc and for the actual number plates themselves.

Most consumers pay up all these charges because we are by then, too far gone into the buying process and want the vehicle asap!
All this should be forbidden.

The same diligence should be placed on Fuel pricing, car pricing and excise, entry and local taxes - if we are "One India" then why on earth should we be paying different prices for the same vehicles in different states?

About time we had an uniform policy on these things!

It is unfair for a Bangalore or Bombay resident to be paying more for the same Fuel/ product/ variant that his counterpart in New Delhi/ NCR or Pondicherry.

[supremeBaleno]

This is a big scam in TN and Kerala where dealers add a few thousand rupees to the price citing handling charges. If you are persistent, you can get this waived off. Ofcourse first time buyers would ofcourse assume this is a normal charge and pay up.

Good that the Govt. has intervened.

[sgiitk]

I am all for it. I hope they can do away with the Suvidha Shulk in the RTOs. All that will happen is that the dealer discounts will become that much smaller.

[mjothi]

Good initiative. But it will only reappear in a different name. Like the name "Donations" are long gone, but still parents pay it in the name of Admission + Registration fees

Originally Posted by shankar.balan

They also charge extra for the Number that one may want to total up to some lucky number etc and for the actual number plates themselves.

I think this is legal. Unless they charge "extra" then the RTO charge for the required number.

[ms001]

discussion on in this thread

http://www.team-bhp.com/forum/indian...l-charges.html (Delhi Transport Dept asks dealers to stop charging incidental charges)

and for now this will be implemented only in new delhi

[Rudra Sen]

Mods note: Thread merged.

[ghodlur]

This incidental/logistics charges was there since long and it was upto the consumer to be alert to get these charges waived off/negotiated during the car buying process. Thank God now there is a law for that.

I feel it is insenstitive on the part of the dealer to make such exorbitant charges. I remember during my Fiesta buying process I was charged 5K as logistics charges which I flatly refused to pay mainly due to the flimsy reason of "running the showroom/Paying the employees etc" given by the dealer.

Never have I seen a dealer give a straight forward ex showroom cost, the breakup is always missing and not provided until and unless asked for.

[ntomer]

Originally Posted by sgiitk

I am all for it. I hope they can do away with the Suvidha Shulk in the RTOs. All that will happen is that the dealer discounts will become that much smaller.

RTOs are amongst the most corrupt of all government departments. One can't get anything done there without paying bribes. Heck, even if you have all the required documentation to register a car, you are still asked to pay 4-5K in bribes. Or they will entangle you in such a web of bureaucracy that ultimately you'll get frustrated and will end paying even more.

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