Dealer can't hand over vehicle without its documents

The National Commission observed that possession of a vehicle cannot be given legally without also handing over the registration and insurance documents

Lok Nath Khushwaha wanted to buy a Spacio car manufactured by Tata Motors. On February 18, 2006, he approached Fauzdar Motors, the authorised dealer. The price of the vehicle was Rs 4,80,631. Khushwaha availed of a loan from Tata Finance to purchase the vehicle. In addition to the price, the dealer charged a further amount of Rs 38,100 towards registration, insurance, and service charges.

The dealer gave delivery of the vehicle but did not hand over the vehicle's registration and insurance documents. So, Khush-waha filed a complaint before the Satna District Forum. The dealer contested the case, defending his refusal to hand over the documents as Khushwaha had failed to make payment of the balance outstanding amount of Rs 1,15,236.

The Forum overruled this defence. It held that that a vehicle cannot be driven on the road without registration and insurance. So, handing over the vehicle without documents was considered to be a deficiency in service. It ordered the dealer to hand over the original documents within a period of 30 days of the order. The Forum also awarded Rs 2,000 as compensation and Rs 5,000 towards costs.

Fauzdar Motors challenged this order by filing an appeal before the Madhya Pradesh State Commission. The latter affirmed the decision to be correct and dismissed the appeal.

Fauzdar Motors then filed a revision petition before the National Commission questioning the correctness of these orders passed by the District Forum as well as the State Commission. The dealer argued that Khushwaha was allowed to take delivery of the vehicle since he had promised to pay the balance amount, but it was decided that the documents would be handed over only later at the time of receipt of the remaining money. Since the amount was not paid, the dealer argued that he was entitled to withhold the documents.

The National Commission wondered how any amount could be due and pending when the vehicle had been purchased through a loan from Tata Finance. However, it refused to adjudicate upon this issue, observing that it was irrelevant, as legally possession cannot be given without the registration and insurance documents. It pointed out that if full payment had not been made, the dealer was entitled to delay delivery. However, it was not permissible to withhold documents while giving delivery of the vehicle, as this would be illegal, and would amount to a deficiency in service.

Accordingly, by its order of December 1, 2020, delivered by Anup Thakur, the National Commission dismissed the dealer's revision petition and confirmed the order of the District Forum passed in Khushwaha's favour.

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The writer is a consumer activist