Dealer ‘fails to transfer’ SUV ownership, buyer wins Rs 12.30 lakh refund, payout

“Failure on the part of the opposite party (ANR Motors Private Limited) selling a used vehicle after accepting the entire consideration including the transfer charges and not getting the vehicle transferred in the name of the purchaser clearly amounts to deficiency in service…The complainant has proved that the opposite party is deficient in rendering service and is also indulged in unfair trade practice by accepting the sale consideration and transfer charges without completing the transfer of ownership and thereafter failing to redress the grievance of the complainant,” the commission said on July 6.

The dispute arose from the purchase of the used SUV in September 2023. Nearly three years later, the commission held that the dealership’s failure to complete the ownership transfer after accepting the full sale consideration amounted to deficiency in service and warranted a refund with interest.

Buyer’s case

According to the complaint, Manjit Singh purchased a used Toyota Fortuner bearing registration number PB08-DC-0224 from ANR Motors on September 19, 2023, for Rs 12 lakh. At the time of sale, the vehicle was under hypothecation with HDFC Bank.

The complainant alleged that the dealership assured him it would cancel the hypothecation, complete the ownership transfer within 15 days, and collected an additional Rs 5,000 towards transfer charges. He took delivery of the vehicle on September 20, 2023.

Hypothecation means the vehicle is still linked to a bank because its loan has not been fully cleared, so it cannot be freely transferred to a new owner’s name until the bank’s charge is removed.

The following day, the dealership allegedly asked him to obtain insurance to facilitate cancellation of the hypothecation. He purchased the policy by paying a premium of Rs 9,608. According to the complaint, despite repeated visits and reminders, the dealership neither cancelled the hypothecation nor transferred the vehicle in his name.

He later returned the vehicle to the dealership in May 2024 after allegedly being assured that the sale consideration would be refunded within a week. However, neither the money nor his documents were returned despite a legal notice.

Dealer’s defence

The dealership denied any deficiency in service and argued that the complainant had purchased the vehicle for resale and therefore was not a consumer under the Consumer Protection Act. It claimed the complainant himself had instructed it not to transfer the vehicle because he intended to resell it and wanted to avoid another ownership entry in the registration record.

It also argued that it remained willing to transfer the vehicle and could not be directed to refund the purchase price after the vehicle had depreciated.

Commission’s findings

• Rejecting the dealership’s defence, the commission noted that it had produced no evidence to show that the complainant was engaged in the business of buying and selling vehicles or that he had instructed the dealership not to transfer the vehicle.
• It observed that the vehicle remained untransferred until the complaint was filed and held that accepting the full sale consideration, including transfer charges, without completing the ownership transfer within a reasonable time clearly amounted to deficiency in service.
• It also rejected the dealership’s contention that depreciation of the vehicle could defeat the buyer’s claim, observing that any such consequence flowed from the dealership’s own default.
• Partly allowing the complaint, the commission directed ANR Motors Private Limited to refund Rs 12 lakh with 6 per cent annual interest from the date of payment until realisation.
• It also awarded Rs 20,000 as compensation for mental harassment and Rs 10,000 towards litigation expenses.
• However, the commission declined the complainant’s claim for Rs 5,000 towards transfer charges because no receipt was produced.
• It also refused reimbursement of the insurance premium, holding that obtaining insurance was the purchaser’s responsibility.
• The dealership has been directed to comply with the order within 45 days of receiving a copy of the order.

Consumer takeaway

Before buying a used vehicle, ensure the seller clears any hypothecation and completes the ownership transfer within a reasonable time. Keep receipts for every payment, including transfer charges, as they can be crucial if a dispute reaches a consumer forum.

For consumer-related grievances, individuals may contact the consumer helpline in their respective states and Union territories (Punjab: 0800-22577) or call the National Consumer Helpline at 1915 for assistance.