Delhi HC slams govt over poor regulation of used vehicle sales, transfers

The Delhi High Court criticised the Delhi government for its failure to regulate the sale and transfer of used vehicles, highlighting major security risks and the legal liability faced by original owners due to poor record-keeping.

The Delhi High Court on Wednesday strongly criticised the Delhi government for failing to put in place an effective system to regulate the sale and transfer of used vehicles, observing that the lapse has serious legal and security implications.

Court Hears PIL on Poor Enforcement

A Division Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela was hearing a public interest litigation filed by Towards Happy Earth Foundation, which has flagged major gaps in the implementation of the amended Central Motor Vehicles Rules governing second-hand vehicle transactions. The petition points out that while Rules 55A to 55H were introduced in December 2022 to streamline the used vehicle market and protect consumers, their ground-level enforcement has remained poor.

Security Risks and Owner Liability Highlighted

During the hearing, the Bench took note of the recent bomb blast near the Red Fort, which allegedly involved a second-hand car, and said the incident highlighted the dangers of weak vehicle traceability. The Court observed that vehicles often change hands multiple times through dealers, yet official records continue to show the name of the original owner, exposing innocent sellers to challans, police notices and even criminal liability years after the sale.

"A car changes four hands, but the original owner has not changed? Therefore, what happens? That man goes to the slaughterhouse? What is this? How are you permitting this kind of situation? Will you take a call only when two or three more bomb blasts take place?" the Bench remarked.

Unregistered Dealers and Tracking Gaps

The petition has also highlighted that the rules do not provide any statutory mechanism for reporting dealer-to-dealer transfers, resulting in a broken chain of custody. It further notes that only a very small fraction of used car dealers across the country are registered as authorised dealers and that in Delhi, none are registered, allowing lakhs of vehicles to circulate without any clear record of actual possession.

Government Directed to File Counter-Affidavit

Taking serious note of these submissions, the Court directed the Delhi government to file a detailed counter-affidavit explaining the steps taken to regulate the used vehicle market and ensure proper tracking of ownership and custody. Making its displeasure clear, the Bench said it would not grant repeated adjournments. The matter has been listed for further hearing in January 2026. (ANI)

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