By Sarwang Mathur
Introduction
The word ‘transfer’ means to move from one place to another. A transfer of ownership requires two parties, and an individual cannot transfer his vehicle to himself.
The person giving away the ownership is called a transferor while the person receiving the ownership is called a transferee.
A transfer of ownership of vehicle may take place via different means such as through performance of contract with a consideration in return, a contract of gift etc.
In this article, we will be talking about how the ownership of the vehicle is transferred and what must be done once the ownership has been transferred.
It has been dealt under Section 50 under Chapter 4 of the Motor Vehicles Act, 1988 in which such rules were laid down and methods were adopted.
Motor Vehicles Act, 1988
The Motor Vehicles Act, 1988 came into force in 1989 and dealt with laws related to any mechanical mode of transport including its license and requirements, conditions for them to be revoked etc.
The Motor Vehicles Act, 2019 came into force in 2020 and is an amendment to the previous act allowing the licensed drivers to carry soft copy of their credentials, reducing the travel baggage and the rise in traffic rule violations because of the previous requirements.
In the Motor Vehicles Act, 1988 act, the Section 50[1] deals with transfer of ownership of vehicle, some unforeseen circumstances and if the registration is not done.
Let us understand what the Section 50 of the Motor Vehicles Act states.
Reporting the transfer of ownership
When and where the motor vehicle’s ownership registered under the chapter is transferred, the transferor must –
- Report the transfer to the registering authority within whose jurisdiction the transfer is to be affected i.e., it gets legal sanctity, via central government prescribed manners and forms of documents and also send a copy of the report on transfer of vehicle to the transferee. The work has to be done within a period of 14 days of transfer provided the vehicle is registered within the same state.
- Report the transfer of ownership to the said registering authority within 45 days of transfer provided the vehicle is registered outside the state, the transferor also has to submit-
- No objection certificate obtained under Section 48[2] of the Motor Vehicles Act.
- If there is no such certificate obtained –
- Submit the receipt obtained under Sub-Section (2) of Section 48.
- Or a postal form of acknowledgement received by transferee and if he has sent an application in this behalf post acknowledgement to the registering authority under Section 48 along with a declaration that he/she has not received any notice or communication from the respective authority saying that they refuse to grant the certificate or require the transferee to comply with any direction issued by them then the certificate may be granted.
Meanwhile, the transferee is supposed to report the transfer to the registering authority within whose jurisdiction he lives or has a place of business or any place where the vehicle is normally kept and shall forward accordingly the certificate of registration to the respective registering authority along with the fee and a copy of report received from the transferor so that the information can be entered for the certificate of registration.
Ownership from government or dead owner
If the owner of the vehicle is dead or if the ownership is acquired through an auction conducted by the government then the person gaining the possession of the vehicle is supposed to file an application to the registering authority that has the jurisdiction in the in area where the vehicle will be such as the owner’s home or his workplace along with the prescribed fee and within a time period as may be specified by the central government in order to transfer the ownership of the vehicle in their name.
In Prakash Chand Daga Vs. Saveta Sharma[3] the honorable Supreme Court held that the owner of the vehicle which had caused the accident will be liable to pay the compensation even though the ownership of the concerned vehicle had been transferred but it had not been reported yet and was under the due date as mentioned in Section 50(b).
What happens when the transferor or the transferee fails to report?
If either of them fails to report the transfer of ownership of the vehicle to the registering authority within the prescribed time as mentioned before in different circumstances then the registering authority may, with regard to the case, ask the person in wrong to pay penalty of not more than Rupees One Hundred prescribed under Sub-Section 5 in place of any action that may be taken against him under Section 177[4].
Action under Section 177 may be taken only when he does not pay the amount asked and only one of either of the penalties can be imposed.
The amount of penalty is prescribed by the state government depending upon the period of delay on the part of the transferor or transferee in reporting the transfer of ownership of the vehicle or delay in sending the application as under Sub-Section (2).
For example, if a person A received a car from B but does not register it in the registering office then A can be penalized under Sub-Section 5 to pay a fine depending upon how much delay, did he cause but it should not exceed Rs 100 and if A fails to pay the fine then and only then can the registering authority penalize A under Section 177.
In United India Insurance Company limited Vs. Ram Prakash Raturi[5] it was noted that the transfer had taken place, with complainant as transferee, was wrong and there was some categorical dispute about this fact which led to the case being open for review.
In Pragati Paper Mills Limited Vs. British motor Car Company Limited[6] It was held that it was the responsibility of the transferor and the transferee to report to the registering authority within 30 days of the purchase of the vehicle.
Registration of the transfer of ownership
After all the required information is given to the registering authority within the prescribed duration then they may enter the transfer of ownership in the certificate of registration and then the registering authority in jurisdiction of the area of vehicle will communicate the transfer of ownership to the transferor and also to the registering authority that originally registered the motor vehicle if the current one is not the original.
In Charu Chandra Biswas Vs. registering authority Motor vehicle department[7] it was held that when all the conditions essential for the registration of transfer of ownership of vehicle have been met then it is the duty of the registering authority to register the same without any delay.
Conclusion
This section, dealing with transfer of ownership of vehicle, plays a crucial role in smooth legalization of getting a car from one person to another and also as a supporting law for different laws such as that of contract related to the matters of motor vehicles and is more of a procedural law telling the procedure on behalf of the ones who want it registered and what actions they are supposed to take and whom they are supposed to approach for transfer of ownership but there is also a substantive side to it where it defines that it is wrong to not register the transfer of ownership within the stipulated time and what kind of punishment may be granted for the same.
- Link to Section 50 of the Motor Vehicles Act indiankanoon.org/ ↑
- Link to Section 48 of the Motor Vehicles Act indiankanoon.org/ ↑
- Prakash Chand Daga Vs. Saveta Sharma. Civil Appeal No. 11369 of 2018 ↑
- Link to Section 177 of the Motor Vehicles Act indiankanoon.org/ ↑
- United India Insurance Company limited Vs. Ram Prakash Raturi. Civil Appeal No. 550 of 2008 ↑
- Pragati Paper Mills Limited Vs. British motor Car Company Limited. 2010 174 DLT 502 (Del) ↑
- Pragati Paper Mills Limited Vs. British motor Car Company Limited. 1993 SCC OnLine Cal 253 : (1993) 2 CHN 412 ↑