Delhi HC raps state government on lax regulation of pre-owned car sales

The High Court raised concerns over weak regulation of used vehicle sales, noting that a car involved in the Red Fort blast passed through multiple dealers while its registration remained unchanged

The Delhi High Court on Wednesday came down heavily on the Delhi state government over lapses in regulating the sale and transfer of used vehicles, noting that a second-hand car was used in a recent blast near Delhi’s Red Fort, Bar and Bench reported.

 

A Division Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela said: "A car changes four hands, but the original owner has not changed? Therefore, what happens? That man (original owner) goes to the slaughterhouse? What is this? How are you permitting this kind of… You will take a call when two, three more bomb blasts take place".

 

The court further directed the Delhi government to file a detailed response on the same.

 

A Hyundai i20 exploded near the Red Fort on November 10 in a terror attack, claiming the lives of 15 people. According to an Indian Express report, the vehicle, first sold by its owner in March, was never officially transferred. Over the next seven months, it passed through three more dealers before reaching the alleged suicide bomber, but the registration certificate (RC) remained in the original owner’s name, even as the car’s value rose from ₹1.3 lakh to ₹2 lakh.

 

What is the PIL about?

The Court made these observations while hearing a public interest litigation (PIL) petition highlighting the lapses in the implementation of the provision under the Central Motor Vehicles Rules that regulate authorised dealers of registered vehicles to bring accountability to the second-hand vehicle market.

 

The PIL, filed by an organisation named Towards Happy Earth Foundation, highlighted the absence of any statutory mechanism for reporting dealer-to-dealer transfers.

 

"In reality, most used vehicles pass through multiple dealers before reaching the final buyer, but the rules recognise only the first transfer to the initial authorised dealer. As a result, the chain of custody breaks after the first step, defeating the very purpose of accountability," the PIL stated.

 

It further claimed that due to these gaps, only a small fraction of dealers across the country have been able to obtain authorised dealer registration, and none in Delhi are registered. "Consequently, lakhs of vehicles continue to circulate without any record of who is actually in possession of them,” the PIL claimed.

 

How fast is India’s pre-owned car market growing?

India’s pre-owned car market touched 5.9 million units in the financial year 204-25 (FY25) and is projected to grow at a 10 per cent compound annual growth rate (CAGR), reaching 9.5 million units by 2030, according to the 7th edition of the Indian Blue Book — the annual report developed by car&bike by Mahindra First Choice and Volkswagen Certified Pre-Owned.