In exercise of power conferred by Section 39 of the Motor Vehicles Act, 1988, the Central Government with a view to promote ease of doing business and transparency transaction of registered vehicles, has introduced the Central Motor Vehicles (Twenty-Sixth Amendment) Rules, 2022 effective from 1st day of April, 2023. India’s market for used vehicles has been steadily expanding. The emergence of online marketplaces for the purchase and sale of used vehicles has helped to expand this market in recent years. Numerous problems were present in the current system, including disputes over who was responsible for third-party damage liabilities, difficulties identifying defaulters, etc. during the transfer of a vehicle to a subsequent transferee. The Ministry of Road Transport and Highways has now amended Chapter III of the Central Motor Vehicle Rules from 1989 in order to create a comprehensive and detailed regulatory environment for the used vehicles market.
The following are the main provisions of the new rules:
For Registered Dealer:-
- Rule 53, which states ‘Issue of Duplicate certificate of Registration’:- Owners of motor vehicles or authorized dealers of registered vehicles must notify any registering authority in the state in which the vehicle is currently registered in writing if the certificate of registration is ever lost or destroyed.
- In rule 55, which states ‘Transfer of ownership’: a) In sub-rule (1), “the transferor” shall be replaced with “the owner of a motor vehicle or an authorized dealer of a registered vehicle.”
- Under the inserted Rule 55A mandate that in order to deal in the sale and purchase of pre-owned vehicles, both offline and online pre-owned vehicle dealers must obtain an “Authorization” from the relevant State Transport Department by filing application for grant or renewal of authorization certificate for sale of registered vehicle to be done electronically on portal in Form 29A. An authorization certificate granted or renewed to be valid for a period of five years from the date of initial grant or renewal. The rule also prohibits authorized dealer of registered vehicles to park or store his inventory of vehicles for sale on any public road.
- Authorized dealers will be the “Deemed Owners” of the vehicle, which they have in possession until the vehicle is sold/transferred to the other Vehicle.
- The vehicle to be market through a dealer, with no link between the original owner and the new buyer. The dealer will be in charge of updating the new owner’s information in the state transport office. When a dealer receives a vehicle for resale, to be registered for sale at the state transport office. The dealer will then be solely liable for any untoward incident, including theft and other crimes. Currently, there are no established guidelines for enlisting such vehicles.
- The authorized dealer of registered vehicles must electronically notify the inventory record in Form 29E on the portal.
- Authorized dealers can now transfer registration certificates, renew registration certificates, obtain fitness certificates, duplicate registration certificates, and obtain no-objection certificates for transfer of ownership. Dealers will also be required to keep an electronic vehicle trip log detailing the trips taken, their purpose, driver, time and mileage.
For Registered Owner/Seller:-
- Rule 55B the registered owner of a motor vehicle to use Form 29C for electronic submission on the portal, to notify the registering authority with whom the vehicle is currently register of the fact that the vehicle has been delivered to an authorized dealer of registered vehicles.
- The dually signed Form 29D must be electronically submitted on the portal in order to notify the registering authority that the registered owner of a motor vehicle has handed back the vehicle to an authorized dealer of registered vehicles.
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