Second-hand car dealer sells ‘blacklisted’ vehicle, Punjab man wins Rs 2.5 lakh payout

A consumer commission in Punjab has directed a used-vehicles dealer to pay Rs 2.57 lakh to a 42-year-old man who discovered that the second-hand car he had purchased months ago was allegedly blacklisted in connection with proceedings underway before the Punjab and Haryana High Court.

The man had bought the vehicle in July 2022 after the dealer assured him that it was in good running condition and had proper documents. However, in December that year, he received a notice from the vehicle registration authority asking him to produce the car for inspection and verification, stating that it was involved in a case pending before the high court.

Deciding the man’s complaint, the commission comprising president Naveen Puri and members Harvimal Dogra and Prem Singh Salaria of the Hoshiarpur Consumer Disputes Redressal Commission stated on October 21, “The opposite party (reseller) failed to exercise reasonable care in relation to the vehicle’s antecedent legal status and failed to provide the complainant with a vehicle free from the material difficulty complained of. Such failure amounts to deficiency in service.”

Letter to produce car before HC

The man claimed that he purchased a second-hand car for Rs 2.51 lakh from an authorised reseller of pre-owned cars in July 2022 after being assured that the car was in good running condition and had proper documents. The car was said to be previously owned by a Ludhiana man.

On December 6, 2022, he received a letter from the Vehicle Registration Authority, Ahmedgarh, stating that the car had been blacklisted by an order of the Punjab and Haryana High Court. He approached the reseller, which allegedly assured him that the matter would be resolved within a month. However, he claimed that the dealer kept delaying the matter.

In March 2023, the man said representatives of the reseller asked him to bring the car to its premises, as it was required to be produced before the high court. He handed over the vehicle to the reseller on its assurance.

In a legal notice dated September 30, 2023, the reseller offered to buy back the car for Rs 2,51,700. The man, however, claimed that though he had purchased the car for Rs 2.51 lakh, he had already incurred expenses exceeding Rs 3.20 lakh on the vehicle since then. Aggrieved, he approached the commission seeking Rs 3.20 lakh, along with interest and compensation, alleging deficiency in service. He was represented by advocate A S Minhas.

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Reseller’s defence

The reseller, through advocate D D S Nayyar, submitted that as the vehicle’s registration certificate was issued after it was transferred in the name of the complainant, it shows that there was no issue with the transport authorities at the time of transfer of registration and hence, no blame can be placed on them.

It also pointed out that the complainant has since left the vehicle on their premises without any further communication and denied that there was any negligence, deficiency of service, or unfair trade practice on its part.

The reseller’s counsel argued that the car had already run for more than one year, and as a matter of goodwill, the reseller had offered to purchase it back but the complainant did not accept their genuine offer.

‘Reseller had to exercise reasonable care’

The commission found that the vehicle was involved in a case pending before the high court. It observed that the blacklisting had affected the man’s ability to use the car, as he could not ply it without fear until its credentials passed “legal scrutiny” by the court or the concerned transport authority.

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The resellers’ argument that it only acted as an intermediary does not absolve it of responsibility and obligations undertaken in connection with the car’s sale, the bench clarified.

The commission found that the vehicle was sold in July 2022, whereas the complainant received the communication concerning its inspection and verification in December 2022. “The material placed on record indicates that the issue related to the vehicle’s earlier history and arose from circumstances predating the sale,” it added.

The reseller was engaged in the business of buying and reselling pre-owned vehicles, the commission found, and held that it was “expected to exercise reasonable care in verifying the vehicle’s registration particulars and relevant documentation before representing it as having proper documents”.

The reseller had failed to prove that after parking the car on its premises, the complainant had taken it away for his personal use, the bench observed. It also noted that the complainant failed to provide a complete itemised account, supported by receipts, of all additional expenses claimed.

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It thus ordered the reseller to refund Rs 2.51 lakh to the complainant, subject to confirmation that the vehicle remains in its possession. It also ordered the reseller to pay Rs 7,500 as litigation costs within 45 days.

Takeaway

The ruling underscores that a used-car reseller cannot escape responsibility by claiming to be only an intermediary when it fails to exercise reasonable care in checking a vehicle’s legal status before selling it.

For consumer-related grievances, individuals may contact the consumer helpline in their respective states and union territories (Punjab: 1800-425-1082) or call the National Consumer Helpline on 1915 for assistance.

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