If you are stuck in such a situation, here is what to do.

Mr. Alok Sharma, a resident of Bhopal, Madhya Pradesh, bought a pre-owned motorcycle from “Prime Wheels Auction,” an online platform run by Apex Finance Bank. These vehicles are typically repossessed by the bank after loan defaults. The motorcycle Mr. Sharma won in the auction was registered in Nagpur, Maharashtra.

Before placing his bid, Mr. Sharma confirmed with a bank executive that all necessary documentation for the ownership transfer would be provided. However, after making the full payment and taking delivery of the vehicle, the bank failed to provide any documents immediately. They informed him that the No Objection Certificate (NOC) and other forms would be available only after 45 days.

After a delay of more than two months, Mr. Sharma finally received an NOC (valid for 90 days) and several pre-signed RTO forms from Apex Finance Bank. These documents were intended to remove the bank’s hypothecation lien on the vehicle’s registration, which was marked as being under a Hire Purchase Agreement.

In October 2022, Mr. Sharma took the motorcycle and all the documents to the Nagpur RTO. The officials there refused to process his request. They insisted on the presence of the original owner, the original Registration Certificate (RC), and the owner’s personal documents. Despite Mr. Sharma’s repeated attempts to explain the situation and show the papers provided by the bank, the RTO staff did not cooperate. A language barrier further complicated the matter, as he was not fluent in Marathi.

Now, Mr. Sharma is stuck. He has transported the motorcycle to his home in Bhopal but cannot legally claim ownership. His calls and messages to the original owner have gone unanswered, and Apex Finance Bank has become unresponsive to his queries. He is in possession of a vehicle for which he has paid but cannot legally use or sell.

Advice in such cases

• Document Everything: Preserve all records related to the transaction, including the auction confirmation, payment receipts, sale invoice, and all communication with the bank.
• Send a Legal Notice: The first formal step is to have a lawyer send a legal notice to the bank, demanding that they provide the complete and correct documentation required for the transfer or refund the entire amount paid.
• File a Consumer Complaint: If the bank fails to comply, you can file a complaint against them in the appropriate Consumer Disputes Redressal Commission for “deficiency in service.”
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think

Applicable Sections of Law

• The Motor Vehicles Act, 1988: Sections 50 and 51, along with the Central Motor Vehicles Rules, 1989, govern the procedure for transfer of ownership and termination of hire-purchase agreements. The RTO is bound by these procedures.
• The Consumer Protection Act, 2019: This Act protects consumers against unfair trade practices and deficiency in services. The bank’s failure to provide necessary documents after taking payment is a clear deficiency in service.
• Bharatiya Nyaya Sanhita, 2023 (BNS): If it can be proven that the bank had a dishonest intention from the outset, a case could potentially be made under Section 318 of the BNS for cheating.

If you are the complainant

• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think
• Issue a Detailed Legal Notice: Your lawyer will draft and send a comprehensive legal notice to the bank’s corporate office, detailing the entire sequence of events and clearly stating your demands (either complete the transfer process or provide a full refund with damages).
• Approach the Consumer Forum: Filing a complaint is an effective remedy. You can claim the vehicle’s cost, mental agony, and litigation expenses. The forum can direct the bank to fulfill its obligations.
• Consider a Writ Petition: If the RTO is acting arbitrarily and not following the established procedure for repossessed vehicles sold by financial institutions, a writ petition can be filed in the High Court to seek a direction for them to process your application.

If you are the victim

• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think
• Avoid Using the Vehicle: Do not use the vehicle on public roads. Since it is not registered in your name and may not have valid insurance under your name, you could face serious legal trouble in case of an accident or if stopped by traffic police.
• Secure the Asset: Keep the motorcycle in a safe and secure location until the ownership issue is legally resolved.
• Do Not Sell the Vehicle: Attempting to sell the vehicle to someone else would be illegal and would only transfer the problem, potentially exposing you to criminal charges.

How the police behave in such cases

The police typically view such matters as civil disputes between the buyer and the seller (the bank). They are unlikely to register a criminal FIR unless there is strong prima facie evidence of a pre-planned fraud or cheating. They will most likely advise you to approach the consumer court or file a civil suit for resolution. An FIR under Section 318 of the BNS (Cheating) is possible, but proving the bank’s dishonest intent can be challenging.

FAQs people normally have

What evidence is required?

To build a strong case, you will need the following:

• Proof of winning the bid (email, website screenshot).
• All payment receipts and bank statements showing the transaction.
• The sale letter or invoice issued by the bank/auction platform.
• The NOC and all RTO forms provided by the bank.
• Copies of all written communication (emails, letters) with the bank.
• A record of your visits to the RTO, including dates and the names of officials you spoke with, if possible.

How long will the investigation take?

This is not a typical criminal investigation. The timeline for resolution depends on the legal path you choose:

• A response to a legal notice is usually expected within 15 to 30 days.
• A consumer complaint case can take anywhere from 6 months to 2 years to get a final order, depending on the commission’s workload.
• A writ petition in the High Court may be resolved more quickly, often within a few months.

Advocate Sudhir Rao, Supreme Court of India