Direct transfer of autos from loan defaulters to new buyer now illegal: Delhi Govt

New Delhi, June 21 (Bureau) The Delhi Government on Tuesday made the transfer of auto-rickshaws and permits impounded from loan defaulters directly to a new buyer illegal. The transport department has issued an order to prevent the direct transfer of the permit and the vehicle to a new buyer in case of default of loans. “This was done in light of various representations related to the procedure being followed for transfer of auto-rickshaws after repossession by financiers like Banks and Non-Banking Financial Companies in the eventuality of loan defaults,” the department said. The department further clarified that the loan arrangement is only in respect of the vehicle and not the permit/letter of intent issued to the original owner. “These provisions made under Section-51 of Motor Vehicle Act 1988 and Rule-61 of the Central Motor Vehicle Rules 1989, clearly lay down rules regarding the vehicles repossessed by the Financiers (NBFCs / Banks) from the Registered Owner on account of default in payment of loan towards the vehicles under hypothecation.

In such cases, the said vehicle shall be transferred in the name of the Financiers (NBFCs / Banks) on the production of relevant orders of the Court / Arbitrator. This reiterates the provision that a direct transfer of the vehicle and permit to another buyer is not legally permissible,” the order copy mentions. The department is in the process of preparing guidelines to ensure that other transport/ non-transport vehicles also comply with the same, an official said. The department will also share the list of such surrendered permits and registration of vehicles in the name of Financiers with the Enforcement Branch to check for any unauthorised playing, he added. Transport Minister Kailash Gahlot, in a statement, said, “Despite an Act and Rule mandating the same, a lot of genuine loan defaulters are being harassed by financiers. Our government believes in fighting against all such types of corruption and ending malpractices. This is especially crucial in a post-Covid-19 scenario where auto drivers are bearing the brunt of heavy loans and inability to repay them. I am hopeful that this measure, along with strict enforcement by the department will bring down such malpractices and bring relief to a lot of auto drivers (sic).”