Dealer Liable For Failure To Transfer Ownership Of Exchanged Vehicle: Chandigarh Consumer Commission
Pranav B Prem
The District Consumer Disputes Redressal Commission-II, U.T. Chandigarh, has held that a vehicle dealer is responsible for ensuring the transfer of ownership of an exchanged car to the subsequent purchaser and that failure to do so amounts to deficiency in service. The Commission observed that where a vehicle continues to remain registered in the name of the original owner even after its sale, resulting in legal consequences for him, the dealer cannot evade liability by shifting the blame onto the purchaser.
The ruling was delivered by a coram comprising President Amrinder Singh Sidhu and Member Brij Mohan Sharma in a consumer complaint filed by Mr. Ravinder Kumar Khanna, who had exchanged his Maruti 800 car bearing registration number CH-01-A-5553 while purchasing a new Alto K-10 vehicle on December 20, 2015 through the True Value unit of M/s C.M. Auto Sales Pvt. Ltd. The exchanged vehicle was subsequently sold by the dealer on December 26, 2015 to a third-party purchaser.
Despite the sale, the registration of the Maruti 800 was never transferred from the complainant’s name. In March 2019, the vehicle was challaned in Himachal Pradesh under Section 179 of the Motor Vehicles Act, with the challan reflecting the complainant as the registered owner. The situation worsened when, in January 2021, a bailable warrant was issued by the Court of the Chief Judicial Magistrate, Kinnaur, against the complainant in connection with the same offence.
The complainant, who was already suffering from acute Parkinson’s disease, faced severe mental distress due to the criminal proceedings initiated against him for an act committed long after he had parted with the vehicle. After repeated communications and follow-ups with the dealer failed to yield any result, he engaged legal counsel and ultimately got the offence compounded on payment of a fine of ₹500. Alleging negligence, harassment, and deficiency in service on the part of the dealer, the complainant approached the Consumer Commission seeking appropriate relief.
The complainant contended that once the exchanged vehicle was handed over to the dealer under the exchange scheme, it was the dealer’s sole responsibility to ensure its lawful sale and transfer of ownership to the subsequent purchaser. The continued registration of the vehicle in his name, which led to challan proceedings and issuance of a bailable warrant, was directly attributable to the dealer’s failure.
Opposite Party No.1, the Regional Office of True Value – Maruti Suzuki India, submitted that it was not privy to the exchange transaction and had no contractual relationship with the complainant regarding the sale or transfer of the old vehicle. It contended that the transaction was exclusively between the complainant and Opposite Party No.2 and sought dismissal of the complaint against it.
Opposite Party No.2, M/s C.M. Auto Sales Pvt. Ltd., argued that it had sold the vehicle to a subsequent purchaser and handed over all relevant documents to him. It claimed that the purchaser failed to complete the transfer of ownership and later informed that the vehicle had been scrapped, and therefore no deficiency in service could be attributed to the dealer.
The Commission found that it was an admitted fact that the complainant handed over the Maruti 800 to Opposite Party No.2 on December 20, 2015 and that the dealer sold the vehicle on December 26, 2015. However, the vehicle continued to remain registered in the complainant’s name even years after the sale. The challan issued in March 2019 clearly demonstrated that the vehicle was still being used on the road while remaining registered in the complainant’s name.
Rejecting the dealer’s defence, the Commission held that once the vehicle was entrusted to Opposite Party No.2, it became the dealer’s sole responsibility to ensure its transfer to the subsequent purchaser. The Commission noted that Opposite Party No.2 failed to place any documentary evidence on record to show that it had issued reminders or a legal notice to the purchaser for transfer of ownership. In the absence of such proof, the bald assertions made by the dealer could not be accepted.
The Commission also observed that since the vehicle was stated to have been scrapped, no direction for transfer of ownership could be issued at that stage. However, the failure to ensure timely transfer of ownership after the sale clearly amounted to deficiency in service on the part of the dealer.
As regards Opposite Party No.1, the Commission found that there was no privity of contract between the complainant and Maruti Suzuki India and that Opposite Party No.1 had no role in the exchange transaction. Accordingly, the complaint against Opposite Party No.1 was dismissed. In view of the above findings, the consumer complaint was partly allowed. The Commission directed M/s C.M. Auto Sales Pvt. Ltd. to pay ₹25,000 to the complainant towards compensation for mental harassment and litigation expenses within forty-five days from the receipt of a certified copy of the order.
Case Title: Mr. Ravinder Kumar Khanna v. Regional Office (True Value), Maruti Suzuki India and M/s C.M. Auto Sales Pvt. Ltd.
Case No: Consumer Complaint No. 326 of 2021
Coram: President Amrinder Singh Sidhu, Member Brij Mohan Sharma
