NEW DELHI: The Delhi High Court on Wednesday raised serious concerns over the unregulated sale of used vehicles, warning that the lack of oversight poses grave security risks. The court cited the Red Fort blast case, where a car involved in the incident had reportedly been resold three to four times without the ownership being officially transferred.
A bench comprising Chief Justice D K Upadhyaya and Justice Tushar Rao Gedela sharply questioned the Delhi government after it emerged that not a single used-car dealer is registered with the authorities. “A car changed hands four times, but the original owner’s name was never changed on paper. What happens then? The original owner ends up being blamed. How are you permitting this? Will you act only after two or three more bomb blasts?” the bench orally observed.
The court directed the Delhi government to file a response explaining its failure to regulate the sale and transfer of second-hand vehicles.
The observations came while hearing a public interest litigation filed by Towards Happy Earth Foundation, which flagged difficulties in implementing Rules 55A to 55H of the Central Motor Vehicles Rules, introduced in December 2022 to regulate authorised dealers of registered vehicles. The petitioner argued that although the rules were meant to bring accountability to the used-car market, they have failed due to regulatory gaps and procedural hurdles.
Counsel for the petitioner pointed out that not a single dealer is registered in Delhi and that, across the country, only five or six dealers have been brought under the authorised framework.
The court also questioned online used-car platform Cars24 on why it had not registered itself. While the company argued that it functions merely as an online aggregator and does not require registration, the bench rejected the distinction, noting that the platform operates in the same space as physical dealers and charges a fee. “You cannot claim to be different,” the court said.
The petition further highlighted that most used vehicles pass through multiple dealers before reaching the final buyer, but the rules recognise only the first transfer to an authorised dealer. This, the plea argued, breaks the chain of custody and defeats the purpose of accountability.
As a result, the court was told, lakhs of vehicles continue to change hands without any official record of who is actually in possession of them. The plea added that only a small fraction of the estimated 30,000 to 40,000 used-vehicle dealers in India are registered under the current regulatory framework.
