India is building a clear chain of custody for used cars

Deemed ownership can show who has the car, who is responsible for it, and what remains before the RC transfer is complete.

The RC tells us whose name a car is registered in. It does not always tell us who has the car today.

A seller may hand the car to a dealer. That dealer may move it to another dealer. The car may reach its buyer several weeks later. Through all of this, the RC may still carry the seller’s name.

The car moved. The record did not.

This is why I believe deemed ownership is one of India’s most important used-car reforms in recent years. It gives the government a way to record who has the car during the gap between one registered owner and the next.

Deemed ownership is a government-recognised record of custody. When an eligible car is handed to an authorised dealer and Form 29C is successfully submitted, that dealer becomes its deemed owner.

The dealer becomes responsible for the car’s documents and any incidents involving it. The buyer’s name can be recorded on the RC later.

The first handover can therefore enter the government record before the final buyer exists.

Why does the RC leave a gap?

The RC was built to record registered ownership. But a modern used-car transaction often includes a dealer. Sometimes it includes more than one dealer.

The car may spend weeks or months between registered owners.

Until recently, that period was largely missing from the government record. Dealers and sellers relied on sale letters, delivery receipts and indemnities. Those papers could help reconstruct what happened later. They did not create a live government record of who held the car on a particular day.

That created a familiar problem.

The seller had handed over the car and received the money. Yet the RC continued to show the seller’s name. If a challan, accident or police query followed, the authorities often contacted the person named on the RC first.

The market needed a record for the period between registered owners.

Deemed ownership begins to create that record.

What changed in 2022?

The Ministry of Road Transport and Highways created the authorised-dealer framework through G.S.R. 901(E). The rules were notified in December 2022 and took effect on 1 April 2023.

Rule 55B introduced Form 29C.

The registered owner and the authorised dealer submit the handover electronically. Once the portal accepts the form, it generates an acknowledgement number.

Rule 55C then makes the authorised dealer the deemed owner. The dealer becomes solely responsible for the validity of the car’s relevant documents and for incidents involving the car.

The dealer can also apply for services such as insurance, an NOC, a duplicate RC and the eventual ownership transfer. The framework requires an electronic inventory of the cars in the dealer’s custody.

These rules recognise a simple fact: custody can change before the name on the RC changes.

The government did not require every dealer to become another registered owner on the RC. Doing that would add an ownership entry before the car reached its actual buyer.

Instead, the rules created a separate legal status for the authorised dealer holding the car.

That is sensible policy. It reflects how the used-car market works while placing responsibility on the business that has the car.

What proof should a seller receive?

For the seller, transparency should answer four simple questions.

Who took my car?

Did the government portal record the handover?

Who is responsible for the car today?

Has the final RC transfer been completed?

Form 29C helps answer the first three questions. The authorised-dealer registration identifies the business permitted to accept the car. The portal acknowledgement confirms that the handover entered the government system.

A seller should understand that different records prove different things.

• Handover receipt: The seller gave the car and keys to the dealer. Form 29C may not yet have been accepted.
• Form 29C acknowledgement: The handover to an authorised dealer entered the government system. The buyer’s name may not yet appear on the RC.
• Proposed Form 29CA acknowledgement: A later movement between authorised dealers was recorded. This will apply only if the draft rules become law.
• Final RC transfer: The buyer’s name is recorded on the RC. The ownership-transfer process is complete.

These milestones should never be compressed into one vague update saying, “RC transfer in process.”

The seller should be told which record exists, which step is pending and who is responsible while the process continues.

That is what real transparency looks like.

What happens when the car moves between dealers?

The 2022 framework records the first handover from the seller to an authorised dealer.

But a used car does not always reach its buyer through that first dealer. Inventory moves between dealers because demand varies by city, price and type of car.

The current rules do not provide a dedicated electronic record for that later dealer-to-dealer handover. The government can see the car enter the organised trade. It may not be able to follow every movement after that.

MoRTH’s G.S.R. 649(E) proposes to close this gap. This is still a draft notification. Its provisions are not yet law and may change before final publication.

The draft introduces Form 29CA. An authorised dealer would submit it whenever the car moves to another authorised dealer. The portal would generate an acknowledgement, and the original registered owner would receive an electronic notification.

The draft would allow no more than two such dealer-to-dealer movements before the final ownership transfer through Form 30.

It also proposes a six-month backstop. If the final RC transfer does not happen within six months of Form 29C, registered ownership would move automatically to the last authorised dealer holding the car.

If notified, these changes would create a much clearer trail.

The government could see the car enter the trade, move between authorised dealers and eventually reach its buyer. If it remained unsold after six months, responsibility would not continue hanging indefinitely on the original seller.

Why is this bigger than an RC-transfer reform?

We often treat RC transfer as a paperwork problem.

Digitise the form. Remove the RTO visit. Send an OTP. Reduce processing time.

Those steps help after a complete transfer application has been filed. The seller’s problem begins earlier. It starts when the car leaves the seller but the official record continues pointing back to them.

Deemed ownership deals with that earlier moment.

It recognises custody when the car first enters an authorised dealer’s hands. It can then record later movements until the final buyer becomes the registered owner.

This changes the way we should think about vehicle records.

The government should not see only the starting owner and the final owner. It should also be able to see who held the car in between.

Every movement of a valuable asset should leave a trace. Every period of custody should have someone clearly responsible for it.

Used cars deserve that discipline.

What still needs to happen?

The legal framework is only the foundation. Execution will decide how useful it becomes.

States must enable the process. Dealers must obtain authorisation. Cars must meet the required conditions. Form 29C must actually be submitted and accepted.

Direct sales between two individuals also remain outside the framework because no authorised dealer takes custody of the car.

The dealer-to-dealer record and six-month backstop remain proposals. MoRTH must consider the consultation responses and decide the final form of the rules.

India will also need more authorised dealers and more consistent adoption across states. Sellers need clear status updates that show the actual government record.

Without that, a good regulation can remain a facility that few people use or understand.

What should Cars24 show its sellers?

Cars24 should hold itself to the same transparency standard we want from the wider system.

Where deemed ownership applies, a seller should see four separate milestones:

1. The car was physically handed over.
2. Form 29C was accepted by the government portal.
3. The authorised dealer responsible for the car is identified.
4. The final RC transfer was completed.

If a step is pending, the seller should see the reason. If the car is not eligible for Form 29C, that should also be stated clearly.

The government rules create the records. Our job is to turn them into an answer that a seller can understand without studying the Central Motor Vehicles Rules.

“Transfer in process” is not enough when a precise answer exists.

India now has the foundation for a visible trail that can follow a used car from its seller, through authorised dealers and eventually to its buyer.

The draft amendments try to close one of the largest remaining gaps. The next challenge is to make this record work consistently across the country.

When the car moves, responsibility should move with it.

And the seller should be able to see the proof.

Frequently asked questions

What is deemed ownership for a used car?

Deemed ownership is the legal status created under G.S.R. 901(E). After Form 29C is successfully submitted, the authorised dealer holding the car becomes its deemed owner and is responsible for its documents and incidents.

Does Form 29C change the name on the RC?

No. Form 29C records the handover to an authorised dealer. The buyer’s name appears on the RC only after the final ownership-transfer process is completed.

What would Form 29CA do?

Form 29CA would record a car’s movement between authorised dealers. The portal would generate an acknowledgement and notify the registered owner. It is part of draft G.S.R. 649(E) and is not yet law.

What is the proposed six-month rule?

The draft proposes that if the final RC transfer is not completed within six months of Form 29C, ownership would move automatically to the last authorised dealer holding the car.

Does deemed ownership cover a private sale between two people?

No. Form 29C applies when a registered owner hands the car to an authorised dealer. A direct sale between two individuals must use the normal ownership-transfer process.