Points To Remember At The Time Of Selling A Motor Vehicle To Avoid Fraud

1. Receive payment only from the account of Transferee (Purchaser). Often, it is reported that the Transferor (Seller) had received payment towards the sale of motor vehicle from the account belonging to a Third Party, whereas the motor vehicle is transferred in some other persons name and the person transferring the said amount comes into picture after a year or so and claim the car stating that despite having made payment to the Seller, the person has not been delivered the motor vehicle by the Seller and in most of the cases, the police lodge an FIR against the Seller under Section 420, 406 of IPC (Cheating and Criminal Breach of Trust). Therefore, it is advisable to receive payment from the person in whose name the motor vehicle is to be transferred.

2. Never sign blank papers required for the purpose of transfer of motor vehicle. At the time of sale of motor vehicle, the Seller is required to sign certain documents required for the transfer of the motor vehicle and in most of the cases, the Seller is asked to sign blank papers by the brokers (agents facilitating sale and purchase of motor vehicle) as the said brokers do not want to transfer the said vehicle in their name. Thereafter, the blank signed papers are handed over to the purchaser who instead of registering the vehicle in his name, further sell the vehicle to another person after few years. This practice is common and in this event, the Seller continue to remain liable under Civil and Criminal Law for any civil wrong or crime committed by the person using the said vehicle. Therefore, it is advised to till the transfer documents and sign the same with date so as to avoid unnecessary hardship.

3. It is mandatory as per The Motor Vehicle Act, 1988 to inform the Regional Transport Office (RTO) about the sale and purchase of a motor vehicle. Hence, it is advised to inform about the sale of the vehicle to RTO immediately and keep a copy of the acknowledgement.

The above information is to impart awareness and no part of this should be construed as providing legal advice for any purpose.

Vikram Kumar

Advocate