Want To Sell Your Car, Bike? Change Its Ownership Or Face Financial Loss, Here’s Why

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Most people tend to sell their old cars and bikes when they take the decision to purchase a new one. Selling an old car or bike is economical since you get some extra cash that might ease the burden of buying a new car or bike.

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With the deal to sell off the older model finalized, most people tend to forget one vital thing. They don’t change the ownership of the car or the bike to the new owner.

In India, this case is more rampant. After the resale, the car or the bike is in the ownership of the new owner and you have no rights over it.

However, the problem arises in a case of an accident or a mishap. Since the car is still in your name, the insurance company will send you a letter if the mishap leads to a compensation.

In addition, if the new owner of the car that you sold is caught dabbling in illegal activity that includes your car, the court will send you a legal notice.

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The Supreme Court of India has now clarified that If you sold your car and did not bother to change the ownership in registration records, you would be liable for compensation claims arising from accidents involving the vehicle.

The SC judges took one case that showed exactly such a scenario into cognizance. The case led to the present judgment.

A man named Vijay Kumar sold his car to another on July 12, 2007. That person further sold the car on September 18, 2008. This third owner then sold the car to one Naveen Kumar, who claimed before the Motor Accidents Claims Tribunal that he had sold it to one Meer Singh.

While the car was in the possession of Meer Singh, another person driving the car was involved in an accident on May 27, 2009. The road mishap led to the death of one and another one was injured.

The tribunal awarded a compensation of Rs.3.85 lakh and ordered Vijay Kumar, whose name figured in the registration certificate, to be jointly liable with the driver of the car.

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The original owner of the car, Vijay Kumar, challenged the judgment before the Punjab and Haryana High Court. In his case, the court agreed to repeal the order that included him stating that the original owner need not be held liable when there was clear evidence of the sale of the vehicle and the last owner admitting ownership.

According to the bench, “a claimant for compensation ought not to be burdened with following a trail of successive transfers, which are not registered with the registering authority. To hold otherwise would be to defeat the statutory object and purpose of the Act,” said a three-judge SC bench”.

If you have plans to sell your car or bike in the near future, make sure to change the ownership of the vehicle in the name of the person who is buying it from you.

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