Delhi government makes changes in auto registration process

The Delhi Government issued an order on Tuesday to prevent the direct transfer of permits and vehicles to a new buyer in the case of default of loans. This was done in the light of various cases that emerged in connection to the procedure being followed for the transfer of auto rickshaws. The vehicles are often repossessed by financiers like banks and non-banking financial companies (NBFCs) in the case of default of loans.

These provisions were made under section 51 of the Motor Vehicle Act and Rule 61 of the Central Motor Vehicle Rules. In the case of loan defaults, the vehicle shall be transferred to the financier only under the production of relevant orders given by a court or an arbitrator.

This reiterates the provision that a direct transfer of the vehicle and permit to another buyer is not legally permissible. The department has further clarified that the loan arrangement is only in respect of the vehicle and not the permit issued to the original owner.

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In case the registered owner is unable to produce any evidence to the contrary, the Registration Certificate (RC) of the original registered owner will be cancelled on default of loan and a fresh Registration Certificate (RC) shall be issued in the name of the financier.

The permits issued against such vehicles shall be deemed to be surrendered to the Transport Department and such repossessed vehicles can be sold by the financier to the auction purchaser following due process and legalities. Even in such cases, the permit will not be transferred or deemed to be transferred in favour of the auction purchaser.

The purchaser, who must be a resident of Delhi having an Aadhaar Card of Delhi address, possessing a valid LMV driving licence and a PSV badge, can then approach the department to get the vehicle transferred in their name. In addition to this, the purchaser must hold a valid LOI and valid permit issued for the auto-rickshaw (TSR) from the Transport Department but must not possess at present any auto-rickshaw (TSR) in their name.

While the financer has the right to retain the vehicle, the original allottee of a surrendered permit shall retain the right to get another TSR registered against that permit within six months from the date of surrender, after which the department will have the right to issue a fresh LOI to another person.

The department is in the process of preparing guidelines to ensure that other transport and non-transport vehicles also comply with the same. The department will also share the list of such surrendered permits and registration of vehicles in the name of financiers with the enforcement branch to check for any unauthorised play.