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

Mr. Alok Kumar recently found himself in a complex situation. About a month ago, he sold his motorcycle to Mr. Sameer Singh in the city of Jayanagar. Mr. Kumar diligently prepared all the necessary paperwork for the sale. This included a comprehensive sales affidavit specifying that from the moment of sale, Mr. Singh, the new owner, would be solely responsible for any incidents involving the vehicle. He also had the signed transfer forms (Form 29 and Form 30) and the receipt for the online payment of the ownership transfer fee.

However, due to administrative delays at the local Regional Transport Office (RTO), the transfer of ownership was still pending. The online portal simply showed “Payment Successful, Awaiting RTO Processing.”

The situation took a turn for the worse when Mr. Singh was involved in a serious accident. A third party’s vehicle collided with the motorcycle, causing severe injuries to Mr. Singh and significant damage to the bike. Mr. Singh contacted Mr. Kumar, requesting him to travel to his city, which is several hours away, to file a police complaint. The reason for this request was that the motorcycle was still officially registered in Mr. Kumar’s name.

Mr. Kumar, while sympathetic to Mr. Singh’s plight, was understandably worried about his own legal exposure and the practical difficulties of repeatedly travelling for a police case in another city.

Advice in such cases

Navigating the legal aftermath when a vehicle’s ownership transfer is pending requires a careful and strategic approach. The primary goal is to assist the new owner while legally insulating yourself from liability.

• Document Everything: Ensure you have copies of all sale-related documents: the sale agreement or affidavit, signed transfer forms, proof of payment for the vehicle, and the RTO fee receipt.
• Communicate in Writing: Keep all communication with the new owner documented, preferably via email or text messages. This creates a clear record of events.
• Cooperate but Protect Yourself: While you should help the new owner, you must also safeguard your legal position. The sale affidavit is your primary shield.
• Power of Attorney: A practical solution is to execute a Special Power of Attorney (SPA) in favour of the new owner. This would authorise him to file the FIR, deal with the police, and manage the insurance claim and court case on your behalf, without requiring your physical presence.
• 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

Several laws come into play in such a scenario:

• The Motor Vehicles Act, 1988: Section 50 of the Act mandates the transfer of ownership. Legally, the registered owner is considered the owner. However, Supreme Court judgments have clarified that if a vehicle has been genuinely sold, the liability shifts to the purchaser from the date of sale, provided the seller can prove the transaction with documents like a sale letter and signed transfer forms.
• Bharatiya Nyaya Sanhita, 2023 (BNS): The police case regarding the accident will be registered under the BNS. Depending on the outcome, sections like Section 114 (Causing hurt by rash or negligent act) or more serious sections could be invoked against the driver of the vehicle that caused the accident.
• Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS): The procedure for filing the police complaint is governed by the BNSS. Under Section 173 of the BNSS, the police are obligated to record the First Information Report (FIR) based on the information provided by the victim or a person aware of the cognizable offence.

If you are the complainant

If you are the original seller (like Mr. Kumar), your primary concern is to avoid being entangled in the legal proceedings.

• Do Not Avoid the Police: If contacted by the police, cooperate and provide them with copies of all the sale documents. Explain that you sold the vehicle and are no longer in possession of it.
• Provide an Affidavit: You can submit an affidavit to the police station, reiterating the facts of the sale and attaching copies of the sale agreement and transfer forms. This formally places your position on record.
• Execute a Power of Attorney: As mentioned earlier, giving a Special Power of Attorney (SPA) to the new owner is the most effective way to help him without needing to travel. This legally empowers him to act on your behalf for all matters related to this specific accident case.
• 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.

If you are the victim

If you are the new owner who has suffered the accident (like Mr. Singh), your focus is on getting justice and compensation.

• Immediate Medical Care: Your health is the top priority. Ensure you get proper medical treatment and keep all medical records and bills safe.
• File the FIR: You have the right to file the FIR as you are the victim of the offence and the de-facto owner of the vehicle. Explain the situation regarding the pending RC transfer to the police. If they insist on the registered owner’s presence, request the seller to provide a Power of Attorney.
• Preserve Evidence: Take photographs of the accident scene, the damage to your vehicle, and any visible injuries. Get contact details of any eyewitnesses.
• Insurance Claim: Inform the insurance company about the accident immediately. You will need the seller’s cooperation to file the claim, which can also be managed through the Power of Attorney.
• 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.

How the police behave in such cases

The police often prefer to deal with the person whose name is on the Registration Certificate (RC) as it simplifies their paperwork. They might initially insist on the registered owner filing the complaint. However, when presented with clear evidence of a sale (sale affidavit, transfer forms), they are legally bound to proceed. An experienced lawyer can effectively communicate with the police and ensure that the complaint is registered without unnecessary hurdles. The police are primarily interested in investigating the accident itself—who was driving rashly and caused the incident.

FAQs people normally have

Is the sale affidavit enough to protect me?

A sale affidavit, along with signed transfer forms and proof of payment, is strong evidence that you have transferred the ownership and liability. It offers significant legal protection and is recognized by courts as proof of a genuine sale.

Will I be called to court?

If you have provided all documents and a Power of Attorney to the new owner, it is highly unlikely that you will be required to appear in court. The new owner, empowered by the SPA, can represent the matter. Your presence might only be required in a very rare and exceptional circumstance, which your lawyer can advise you on.

Who is liable for the motor accident claim?

Even if the RC is not transferred, the liability to pay compensation to any third party (in case the new owner was at fault) generally falls on the new owner and their insurer, provided the sale is proven. In this case, since the new owner was the victim, his claim will be against the person who hit him and that person’s insurance company.

What evidence is required?

To establish the sale and protect the original owner, the following evidence is crucial:

• A notarized Sale Agreement or Affidavit.
• Duly signed Form 29 and Form 30 (vehicle transfer forms).
• Proof of consideration (money) received for the vehicle (e.g., bank statement, receipt).
• Copy of the new owner’s and seller’s ID and address proofs.
• The receipt showing payment of the RC transfer fee to the RTO.
• Any written communication (WhatsApp, email) regarding the sale and handover of the vehicle.

How long will the investigation take?

The duration of a police investigation for a road accident can vary significantly. For a straightforward case, the police may file a final report (chargesheet) within 60 to 90 days. However, complexities like identifying the accused, gathering witness statements, and forensic analysis can extend this timeline to several months. The subsequent court case and insurance claim process can take even longer.

Advocate Sudhir Rao, Supreme Court of India