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What can be understood by a No Objection Certificate (NOC) while buying or selling a car?

By Diksha Sharma

Introduction

Buying and selling is a simple process of transferring ownership from one person to another that is made for customers satisfaction and sellers need. There are many reasons that a person wants to buy something or sell something it just depends on the need of both the parties.

Almost every kind of product can be bought and sold like food, grocery, clothes, toys and many more things. Selling of these kinds of goods is normal and also can be a daily routine of life.

What about buying and selling of car? It is an expensive transaction which a person does. After buying and selling of car is the second largest purchase after the house.

It is an expensive transaction than, no one should buy or sell it carelessly without having any proper documentation. Documents like Registration Certificate (RC), Pollution Under Control certificate (PUC Certificate), Insurance, Ownership Manual and many more make selling and buying smooth and hustle free and will also saves from future issues.

There is a special certificate which allows a person to buy and sell the car without any legal complications that is known as No Objection Certificate (hereinafter as NOC) which comes under Form 28.

Now through this article we are going to study about NOC and its importance.

What are the reasons for buying or selling of a car?

Every car owner loves his car but some find themselves out of love in a year or two and for some, the love lasts for fifteen or twenty years, or until the car is beyond repair. Some people have habit of changing car every time whenever a new modification or new version is launched by the company.

With growing time, income and lifestyle car is also becoming status symbol for some people.

There are many reasons of buying new car or used car like some buy used cars to learn how to drive, for regular use etc. As income increases affordability to buy new and big cars improves and visions for comfortable ride increases.

Secondly, car prices are only going up, making them a very high value purchase for the common man.

So, due to these reasons mostly people prefer to buy used cars or second-hand cars as it is less costly, improve driving, driving tension-free without the fear of getting that first dent or scratch on a new car. There are also many reasons to sell cars as from time to time needs and cost changes.

As mileage of a car increases which will result into the higher maintenance cost of car and also which may include replacement of expensive parts of the car. This is the major factor of selling the car.

While moving to a new city selling the car before moving out is the better option as new laws will not permit to drive the car of a different state registration regularly in the new city.

So, these are some basic reasons to buy or sell the car but what about the NOC as it the most important to buy or sell the car.

When selling a vehicle or moving to another city, there is a requirement for complete documentations and NOC is that essential document. Without it no one can legally sell or buy the vehicle.

What is NOC for Vehicle or Form 28?

Form 28 involves acquiring (NOC) or a No Objection Certificate of your car from the registering authority. It is considered the important document as it will confirm that there is no liability which will disallow a person from lawfully selling a vehicle.

Form 28 is a complete indication that there are no pending challans, taxes, or any accident or criminal activities involved with a specified vehicle.

NOC or No Objection Certificate is a legal document issued by the Regional Transport Office (RTO) that certifies there are no dues of tax on the vehicle. Obtaining an NOC means it is available for registration in another RTO’s jurisdiction as it can be either within the state or from one stare to another.

In case if the owner wants to transfer vehicle’s RTO from one state to another than the NOC must be applied by the owner himself and in case of selling the vehicle the seller has to apply for the NOC of vehicle.

After obtaining the NOC it will be handed over to the buyer. Obtaining the NOC party has to pay a prescribed fee of 100 Rs.

Section 48 of the Motor vehicle Act, 1988 – No Objection Certificate

(1) The owner of a motor vehicle when applying for the assignment of a new registration mark under sub-section (1) of section 47, or where the transfer of a motor vehicle is to be effected in a State other than the State of its registration, the transferor of such vehicle when reporting the transfer under sub-section (1) of section 50, shall make an application in such Form and in such manner as may be prescribed by the Central Government to the registering authority by which the vehicle was registered for the issue of a certificate (hereafter in this section referred to as the no objection certificate), to the effect that the registering authority has no objection for assigning a new registration mark to the vehicle or, as the case may be, for entering the particulars of the transfer of ownership in the certificate of registration.

(2) The registering authority shall, on receipt of an application under sub-section (1), issue a receipt in such Form as may be prescribed by the Central Government.

(3) On receipt of an application under sub-section (1), the registering authority may, after making such inquiry and requiring the applicant to comply with such directions as it deems fit and within thirty days of the receipt thereof, by order in writing, communicate to the applicant that it has granted or refused to grant the no objection certificate: Provided that a registering authority shall not refuse to grant the no objection certificate unless it has recorded in writing the reasons for doing so and a copy of the same has been communicated to the applicant.

(4) Where within a period of thirty days referred to in sub-section (3), the registering authority does not refuse to grant the no objection certificate or does not communicate the refusal to the applicant, the registering authority shall be deemed to have granted the no objection certificate.

(5) Before granting of refusing to grant the no objection certificate, the registering authority shall obtain a report in writing from the police that no case relating to the theft of the motor vehicle concerned has been reported or is pending, verify whether all the amounts due to Government including road tax in respect of that motor vehicle have been paid and take into account such other factors as may be prescribed by the Central Government. 1[(6) The owner of the vehicle shall also inForm at the earliest, in writing, the registering authority about the theft of his vehicle together with the name of the police station where the theft report was lodged, and the registering authority shall take into account such report while disposing of any application for no objection certification, registration, transfer of ownership or issue of duplicate registration certificate].

This Section states that an NOC is required when a person seeks for new registration mark on a vehicle or to transfer Vehicle other than the state of its registration. As the effect of issuing the certificate is that registering authority has no objection for new registration mark on the vehicle.

Within thirty days of application made by the applicant the authority must communicate with the party about the refusal or approval of the application as the case may be.

In case if the authority has rejected the application than they have to make all the reason of refusal in writing and the copy must be sent to the applicant.

If registering authority fails to communicate with the applicant that he must believe that authority has granted the certificate. Before refusing or granting the certificate the authority must inquire about the vehicle and its owner from the police like no pending case or any recent case has been reported in concern of vehicle.

They also verify that all dues and taxes related to the vehicle has been paid and many other factors prescribed by the Central government.

As prescribed the Central Government following are the documents required for the application of NOC:

  • Attested copy of Registration certificate (RC),
  • Attested copy of Insurance certificate,
  • Permit and fitness certificate (applicable for commercial vehicles),
  • Valid pollution under control certificate – PUC,
  • Consent of Financier on CMV Form 28 (if the vehicle is covered by Hypothecation, HPA or a lease agreement,
  • Pencil print of the chassis number and its engine number for the CMV,
  • Owner’s Photo identity and address proof.

Conclusion

To avoid any fraud or any consequences during buying or selling of a car both the parties that is to say buyer and seller must be fully aware regarding the documentation of the vehicle. As it is not a small thing but an expensive thing to deal with. Both the parties must be responsive on their respective sides before dealing.

Legal documentation is most necessary for keeping away any bad future results in the dealing of such kind of things which costs in thousands.

Following proper procedure in this kind of matter is also a sign of good and responsible citizen. To keep the interests safe of both the party’s government has made certain rules and regulations.

It is better to follow everything as it is meant to be and should not change according to benefits as this will result into any miss happening and then a person will also not be able to seek help from government also.

References

  • Motor Vehicles Act, 1988