"Will you act after more terror attacks?" Delhi HC pulls up State over unregulated used car market

The Delhi High Court on Wednesday pulled up the Delhi government for its failure to regulate the sale and transfer of used vehicles.

A Division Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela noted that the recent bomb blast at Red Fort was also carried out using a second-hand car, making the issue even more significant. 

“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 remarked. 

It then directed the government to file a detailed response. The case will be heard next in January 2026. 

"Mr Delhi government, please file a counter affidavit... We will not grant any more dates," the Court remarked.

The Court was hearing a public interest litigation (PIL) petition filed by an organisation named Towards Happy Earth Foundation, highlighting the challenges in the implementation of Rules 55A to 55H of the Central Motor Vehicles Rules, introduced in December 2022 to regulate authorised dealers of registered vehicles. 

While the rules were intended to bring accountability to the second-hand vehicle market, the petitioner argued that they have failed in practice due to regulatory gaps and procedural hurdles.

“A major gap in the amended framework is 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. Because of these gaps, only a very small percentage of dealers across India have been able to obtain Authorised Dealer registration. In Delhi, none are registered. Consequently, lakhs of vehicles continue to circulate without any record of who is actually in possession of them,” the plea stated. 

According to the PIL, only a small fraction of India’s estimated 30,000–40,000 used vehicle dealers have been registered under the authorised dealer framework. In Delhi, not a single dealer has obtained registration, the petitioner claimed.

It also referred to the recent terror attack near Red Fort in which an 11-year-old vehicle, sold several times, was still registered in the name of its original owner. 

Advocate Samar Bansal argued for the petitioner. He was assisted by advocates Vijay Kasana, Sanyam Khetarpal, Vaibhav Sharma and Rahul Gupta.