A public interest case has been filed in the Delhi High Court which has brought fresh attention to long-pending rules in relation to transactions of used vehicles in India. The petition, filed by Towards Happy Earth Foundation, to seek proper and timely enforcement of Rules 55A to 55H of Central Motor Vehicle Rules (CMVR) which was notified way back in December 2022.
The case was heard by a Division Bench headed by Chief Justice Devendra Kumar Upadhyaya, and Justice Tushar Rao Gedela. During the hearing, the Court asked the Delhi Government to submit a detailed status report within four weeks questioning why these rules are yet to be fully implemented.
These CMVR provisions were made to bring clarity and accountability to India’s used vehicle market. They recognise authorised used vehicle dealers formally and set out their responsibilities clearly in the resale process. One of the key ideas behind the rules is to fix a long-standing problem – who is responsible for a vehicle between the time it is sold and when the registration certificate is officially transferred.
Under the framework:
- Authorised dealers must report all purchases and sales of vehicles on the VAAHAN portal
- Dealers are deemed the “deemed owner” in the interim period
- This secures the original owner from any future challans, accidents or mis-uses
- Maintain proper inventory and trip records by dealers
Despite the fact that it’s been almost three years since the notification was issued, implementation is still limited. Public data shows that there are less than 1,500 authorised dealers registered all across India. Only 18 states have adopted the rules in some form. Large states like Delhi, Haryana, Uttar Pradesh, Karnataka and Telangana still do not have even a single authorised dealer registered under these provisions.
The dangers of this gap were highlighted by a recent incident near Red Fort where a vehicle used in a blast had been changed hands several times between states without any tracking. The incident brought to light the dangers of unregulated resale of vehicles.
The petition also identifies practical barriers to slowing adoption. These include unclear state level procedures, mandatory GST registration even for dealers with annual turnover below Rs 20 lakh, lack of clarity on RC transfer processes, dealer to dealer transfers and insurance claims during custody.
CARS24, India’s largest autotech platform has been listed as a related party in the case and was represented during the hearing. The company has been interacting with the Ministry of Road Transport and Highways and the state governments to press for uniform implementation. It has already registered itself in states where the process is active and is helping its dealer partners to do the same.
At its core, the case is about safety, accountability and trust. The direction of the Court may be the final push for states to take action and bring much-needed structure in India’s used vehicle ecosystem.