CENTRE PROPOSES NEW RULES FOR USED-CAR OWNERSHIP TRANSFERS

Why in the News?

● Draft Rules Released: The Ministry of Road Transport and Highways (MoRTH) has released draft amendments to the Central Motor Vehicles Rules (CMVR) to regulate the organised used-car market and strengthen ownership transfer procedures.

● Public Consultation: The Ministry has invited public comments within 30 days on the proposed amendments, which seek to improve transparency, compliance, and digital record management through the VAHAN portal.

KEY PROVISIONS OF THE DRAFT RULES

●  Automatic Ownership Transfer: Under the proposed Rule 55BB, if a vehicle remains unsold with an authorised dealer for more than six months after submission of Form 29C, ownership will automatically transfer to the dealer through the VAHAN system.

●  Mandatory Compliance: Ownership transfer will not be permitted if the vehicle lacks a valid Registration Certificate (RC), Insurance Certificate, or Pollution Under Control (PUC) Certificate, or has pending traffic challans or unpaid user fees.

●  Restrictions on Eligible Vehicles: Vehicles under hire-purchase, lease, hypothecation, superdari, or those involved in criminal cases, accident investigations, or transport of prohibited goods will not be eligible for transfer.

●  Dealer-to-Dealer Regulation: A new electronic Form 29CA has been proposed for transfers between authorised dealers, with a maximum of two dealer-to-dealer transfers before final ownership is transferred to the buyer.

●  Digital Transparency: Every dealer transfer must be electronically recorded on the VAHAN portal, and the registered owner will receive electronic notifications whenever the vehicle changes possession among authorised dealers.

SIGNIFICANCE OF THE PROPOSED REFORMS

●  Greater Transparency: Digital recording of ownership transfers enhances transparency and reduces the scope for fraud in the organised used-vehicle market.

●  Consumer Protection: Mandatory verification of documents and pending liabilities protects buyers from purchasing vehicles with legal, financial, or regulatory issues.

●  Improved Compliance: Linking ownership transfers with compliance requirements such as insurance, PUC, and challan clearance encourages adherence to road safety and environmental regulations.

●  Ease of Governance: Integration with the VAHAN portal simplifies record-keeping, improves traceability, and strengthens e-governance in the transport sector.

●  Formalisation of Used-Car Market: A clear regulatory framework promotes trust, accountability, and efficiency in India’s rapidly expanding pre-owned vehicle ecosystem.

VAHAN PORTAL ●  About: VAHAN is the National Vehicle Registry developed under the National Informatics Centre (NIC) for the Ministry of Road Transport and Highways (MoRTH) to digitise vehicle registration and related services across India. ●  Functions: The portal facilitates vehicle registration, ownership transfer, permit management, tax collection, fitness certification, hypothecation services, and issuance of No Objection Certificates (NOCs). ●  Integration: VAHAN is integrated with State Transport Departments, Parivahan Sewa, e-Challan, insurance databases, and other digital governance platforms to enable seamless verification and service delivery. ●  Benefits: It improves transparency, efficiency, interoperability, real-time verification, and paperless governance, while reducing fraud and administrative delays. ●  UPSC Relevance: Important for Prelims and GS Paper II (Governance) covering e-governance, digital public infrastructure, transport administration, citizen-centric service delivery, and digital transformation in public administration.