Car sold but not transferred kills a person: Legal nightmare for owner

It's a Maruti 800 which we sold to a Hyundai dealer a decade ago. Apparently, the buyer did obtain an NOC from the RTO but failed to complete the registration process.

BHPian vroom5346 recently shared this with other enthusiasts.

Dear Community Members,

I hope this message finds you well. I am reaching out to share a troubling experience my family has faced concerning the sale of our Maruti 800 car back in 2011-2012, and I am seeking your guidance on the best course of action moving forward.

In summary, we sold our vehicle to a Hyundai dealership used cars during that time and received payment via cheque, with the understanding that the dealership would handle the transfer of car registration to the new buyer. However, what appeared to be a straightforward transaction has turned into a legal nightmare that has left us in shock and distress.

Recently, the police served my dad a court notice indicating that a pedestrian was killed by the driver of the car, resulting in the driver being accused 1 and my father being named as accused 2. This situation was incredibly distressing, especially considering that the individual who purchased the car remained unaffected. Consequently, my father, who is 73 years old, had to undertake a journey from Bangalore to Chikmagalur to present all the necessary documentation proving that the car had been sold to a Hyundai dealership in Bengaluru. Fortunately, we had meticulously maintained all relevant paperwork.

Upon investigation, it became evident that the buyer had obtained a No Objection Certificate (NOC) from the Bangalore RTO but failed to complete the registration process in Chikmagalur, leaving the vehicle legally in my father's name. This failure to transfer ownership appears to be a common issue, as highlighted by the police during their examination of our case.

Despite our efforts to seek clarification and resolution from the concerned Hyundai dealership, they have been unresponsive and unable to provide satisfactory answers regarding the ownership transfer lapse. Consequently, my father was fined for the oversight during court proceedings.

Now, we are faced with yet another legal notice from the family of the deceased, seeking compensation for their loss.

Given these circumstances, I humbly request your advice and suggestions on the best course of action to address this complex situation. Any insights or guidance from your experiences would be greatly appreciated.

Thank you for your attention and support.

Here's what BHPian anjan_c2007 had to say about the matter:

Due to negligence, apathy with mischief is not ruled out, it's a nightmare that is making you and your family members suffer mental agony and also torture.

Please attend all the court hearings where a lawyer must represent you. Perhaps it's the Motor Accident Claims Tribunal (MACT) where the suit for financial compensation and claim is filed. Now these MACTs act very swiftly unlike the other courts. Not a single hearing should be missed.

In the meantime, you need to issue notices through a lawyer to both the Hyundai dealership and the new owner of the M800 stating that if the transfer of the car is not effected within two weeks, you shall be constrained to file a civil suit to claim a hefty compensation for the mental agony and torture caused and also praying to the court to issue directions and strictures against these two respondents.

I would suggest that this writ petition be filed in the High Court under Articles 226 and 227. Directions can also be prayed for in the High Court (HC) to stay proceedings of the MACT claims suit till this HC writ petition is heard and decided. Also in case any other new lower court suit is filed by these people/entities the HC can always issue directions.

Here's what BHPian Raghu M had to say about the matter:

Sir, I am not a legal expert but have been involved in something similar. I was the driver of the car that was in a fatal accident. Since I owned the car, I was the one who took all the legal courses and went through every process.

Although the car was not transferred from your dad's name, since he was not driving the car, he is mostly not going to be troubled in any way. You need to react only if you get a court's notice. That will only be a procedure but if they have the driver in custody, then your father has nothing to do with it except some basic paperwork.

Please hire a lawyer immediately and DO NOT reach out to the deceased's family. They will ask you for money in lakhs which you will not be able to negotiate. Your father was not the driver, he was nowhere around the accident spot - that's the alibi you need.

Like I mentioned earlier, if the driver of the car at the time of the mishap has been arrested, then the police might have already seized the vehicle. Talk to the police only through your lawyer. Do not just keep visiting the place as and when they call you, they do not have the authority to do so. It should all be done through courts. You have a lot of time to think, respond and act on this. I would say, keep calm. Just because the car is still in your father's name doesn't make you both the accused. Marking as A2 is only a formality. Let me know the updates from time to time.

Here's what BHPian androdev had to say about the matter:

The Supreme Court held that a registered owner cannot wriggle out of liability towards a third person in the event of an accident, on the mere pretext of the ownership of the vehicle being transferred, if he still continues to be the recorded owner as per RTO records.

"The Supreme Court noted that in terms of Section 50 of the Act, the transfer of a vehicle ought to be registered within 30 days of the sale. Section 50 further prescribes timelines within which the transferor and the transferee are required to report the factum of transfer. The Court further recorded that these timelines and obligations are only to facilitate the reporting of the transfer. It was further held that it is not as if that if an accident occurs within the period prescribed for reporting said transfer, the transferor is absolved of the liability.

The Supreme Court reiterated that for the purposes of fixing such liability the concept of ownership has to be understood in terms of specific definition of ‘owner’ as defined in Section 2(30) of the Act. The Court concluded that even though in law there would be a transfer of ownership of the vehicle, that, by itself, would not absolve the party, in whose name the vehicle stands in RTO records, from liability to a third person. Merely because the vehicle was transferred does not mean that such registered owner stands absolved of his liability to a third person. So long as his name continues in RTO records, he remains liable to a third person."

It's best to speak to a good lawyer and proceed accordingly. Don't do any jugaad out-of-court settlement. This is an unfortunate incident that should be handled by a lawyer.

Tip for those selling cars: All the RTO forms and affidavits are of little use as long as you are the owner as per RTO records. Owner is always liable. I always ensure the car has third-party insurance in my name as long as the RC card is in my name. One of my cars met with an accident and the insurance company gave me a cash settlement (not total loss) that involved selling off the car to a private garage. The garage owner took his own sweet time to repair the car and eventually sold it to someone. I kept track of the RC status on the Parivahan portal and bought 3rd party insurance as long as the car was in my name.

Check out BHPian comments for more insights and information.

Power to the people