Dealer Liable For Failure To Transfer Ownership Of Exchanged Vehicle: Chandigarh Consumer Commission

The District Consumer Disputes Redressal Commission-II, U.T. Chandigarh, comprising President Amrinder Singh Sidhu and Member Brij Mohan Sharma, has held that a vehicle dealer is responsible for ensuring the transfer of ownership of an exchanged car to the subsequent purchaser. The Commission ruled that failure to do so constitutes deficiency in service, particularly where the vehicle continues to remain registered in the original owner's name and leads to legal consequences for him.

Brief Facts:

The complainant, Mr. Ravinder Kumar Khanna , exchanged his Maruti 800 car bearing registration number CH-01-A-5553 with a new Alto K-10 on 20.12.2015 through the True Value unit of M/s C.M. Auto Sales Pvt. Ltd. (OP-2). The exchanged vehicle was subsequently sold by OP-2 on 26.12.2015 to a third-party purchaser.

Despite the sale, the registration of the Maruti 800 was never transferred from the complainant's name. In March 2019, the vehicle was challaned in Himachal Pradesh under Section 179 of the Motor Vehicles Act, and the challan reflected the complainant as the registered owner. Subsequently, in January 2021, a bailable warrant was issued by the Court of the Chief Judicial Magistrate, Kinnaur.

The complainant, who was already suffering from acute Parkinson's disease, faced severe mental distress due to the legal proceedings. After repeated communications and follow-ups with the dealer failed to resolve the issue, the complainant engaged legal counsel and got the offence compounded on payment of a fine of ₹500.

Alleging negligence, deficiency in service, and harassment caused due to non-transfer of ownership of the exchanged vehicle, the complainant approached the Consumer Commission seeking appropriate relief.

Contentions of the Parties

The complainant contended that once the exchanged vehicle was handed over to OP-2, it was the dealer's responsibility to ensure transfer of ownership to the subsequent purchaser. The continued registration of the vehicle in his name, which resulted in challan proceedings and issuance of a bailable warrant, was attributed to the dealer's failure.

OP-1 (Regional Office, True Value – Maruti Suzuki India) submitted that it was not a party to the exchange transaction and had no contractual relationship with the complainant in respect of the sale or transfer of the old vehicle. It contended that the entire transaction was between the complainant and OP-2 and sought dismissal of the complaint against it.

OP-2 (M/s C.M. Auto Sales Pvt. Ltd.) argued that the vehicle had been sold to a subsequent purchaser and that all relevant documents had been handed over to him. It claimed that the purchaser failed to complete the transfer and later informed that the vehicle had been scrapped, and therefore no deficiency in service could be attributed to the dealer.

Observations and Decision of the Commission

The Commission noted that it was an admitted fact that the complainant handed over the Maruti 800 to OP-2 on 20.12.2015 and that OP-2 further sold the vehicle on 26.12.2015. However, the vehicle continued to remain registered in the complainant's name even years after the sale.

The Commission observed that once the vehicle was entrusted to OP-2 under the exchange scheme, it became the sole responsibility of the dealer to ensure its lawful sale and transfer of ownership. The challan issued in March 2019 clearly demonstrated that the vehicle was still being used on the road while remaining registered in the complainant's name, establishing failure on the part of OP-2.

The Commission further noted that OP-2 failed to place any documentary evidence on record to show that it had issued reminders or a legal notice to the subsequent purchaser for transfer of ownership. In the absence of such proof, the defence raised by OP-2 could not be accepted.

Since the vehicle was stated to have been scrapped, the Commission held that no direction for transfer of ownership could be issued at that stage. However, the failure to ensure timely transfer amounted to deficiency in service.

With respect to OP-1, the Commission found that there was no privity of contract between the complainant and Maruti Suzuki India and that OP-1 had no role in the exchange transaction. Accordingly, the complaint against OP-1 was dismissed.

Accordingly, the consumer complaint was partly allowed and OP-2 was directed to pay ₹25,000 to the complainant as compensation and litigation expenses within 45 days from receipt of a certified copy of the order.

Case Details

Case Title: Mr. Ravinder Kumar Khanna v. Regional Office (True Value), Maruti Suzuki India and M/s C.M. Auto Sales Pvt. Ltd.

Case No.: Consumer Complaint No. 326 of 2021

Date of Decision: 20 November 2025

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