[GTO]

Facing a very peculiar dilemma here. The loan company that financed my Jeep shut down 2 decades ago! I'd never bothered with it till date as I never planned to sell my Jeep, but that situation changed recently.

Now, the company is untraceable. How exactly do I get the RTO to remove the hypothecation then? There are several news articles online on the company shutting down, if the RTO needs proof of the same.

My RTO agent gave me 3 options:

- Forge an NOC (I am absolutely against this)

- Use the Jeep (I don't need it anymore)

- Scrap and sell the car for parts

I am sure there is a 4th option?

[Rajeevraj]

If the loan company has shut down, then I guess we can safely assume there is no way the loan company itself can create any issues. Considering the fact that you will have proof on your side that the loan is closed out and also assuming buyer of your Jeep will not be some random person, wouldn't it be ok to ignore the hypothetication and transfer ownership? I assume ownership can be transferred even with hypothetication recorded. If not then above makes no sense.

Maybe some kind of official document that the company has filed with the relevant government agencies that they have/are shutting down?

[self_driven]

Originally Posted by Rajeevraj

I assume ownership can be transferred even with hypothetication recorded.

Nope. Hypothecation has to be removed for transfer of ownership.

@GTO I'd say just let the new buyer enjoy it without name transfer if nothing else works out. Going by how the Jeep has been cared for over the years, I presume it'll be sold to a very trustworthy person.

[Mr.Boss]

Originally Posted by GTO

I am sure there is a 4th option?

If the loan closure statement or old NOC is available, it is possible. Otherwise it's mere impossible 'officially'. I faced the same issue with one of the used bike I bought, finally gave up and secured few parts and scrapped rest of the bike.

Originally Posted by self_driven

I'd say just let the new buyer enjoy it without name transfer if nothing else works out.

Risky, however trustworthy the buyer may be.

[Engine_Roars]

Originally Posted by self_driven

Nope. Hypothecation has to be removed for transfer of ownership.

@GTO I'd say just let the new buyer enjoy it without name transfer if nothing else works out. Going by how the Jeep has been cared for over the years, I presume it'll be sold to a very trustworthy person.

Totally against this. No matter how trust worthy some one may be, when the time comes, most of the people will save themselves over anyone else.

[GTO]

Originally Posted by Rajeevraj

I assume ownership can be transferred even with hypothetication recorded.

Nope. Impossible.

Maybe some kind of official document that the company has filed with the relevant government agencies that they have/are shutting down?

This is the kind of idea I'm looking for on this thread. Am seeing documents on the RBI website itself. Would love it if BHPians can provide tips, as I'm surely not the first to go through this ordeal.

Originally Posted by self_driven

I'd say just let the new buyer enjoy it without name transfer if nothing else works out. Going by how the Jeep has been cared for over the years, I presume it'll be sold to a very trustworthy person.

Thanks man. I did sleep on this, but the potential liability is way too high, especially when you are an asset owner. Plus, this kind of car is a keeper. Say I trust Mr. A, but he hands it down to his children. What if one of them turns out to be a reckless drunk driver? Or a gangster? Like Munna in Mirzapur?

https://www.youtube.com/watch?v=gWCTSadJpJ8

[AMG Power]

1. You would have the loan closure document stating that all amounts against the said loan have been paid and the matter settled.

2. You have proof or evidence that the company ceased existing as a company 20 years ago.

3. This means that all claims by or against the company are barred by limitation.

4. You could get additional proof of closure of the company from the Registrar of Companies.

5. With the documentary proof of 1, 2 & 4 meet the RTO personally (not through a broker) and make a representation to have the ownership transferred because of the particular circumstances.

6. You may have to give a written guarantee on stamp paper that you will be held liable if there are any claims of if the information provided by you is incorrect.

7. This should usually suffice as a work around as (a) you have closed the loan, (b) the company does not exist and (c) claims by the company are barred by limitation.

[Reinhard]

Originally Posted by Mr.Boss

If the loan closure statement or old NOC is available, it is possible. Otherwise it's mere impossible 'officially'.

The biggest flaw in our hypothecation systems is - for an unimaginable reason - these NOCs / no-dues certificates are given with a validity of around 3 months or so. As if suddenly the loan starts again afterwards. So even if GTO has that old paper - it won't be considered valid by the RTO. This infact is a good revenue earner for these lenders since even just a reprint of that certificate with new validity earns them good money for the cost of 1 gram toner & 1 A4 paper. Most people are lazy about removing the hypothecation when the NOC arrives - yours truly included.

The only possible way out I can think of is actually file an affidavit along with evidence of the firm's closure with a stamp paper to declare that the firm has closed & that the car owner (GTO) will be responsible for any consequences of this being fraudulent information etc. The format for this generally would be available with the seasoned agents.

In the end - I feel it will be doable with the old NOC, this signed stamp paper indemnifying the RTO & of course a little extra payment to the agent for the "appropriate" purposes.

But yes - I feel its certainly better to clear the RC and do a complete transfer of ownership on government documents. No point relying on the good-old "trust" anymore. The legal machine works in a rather odd manner. If tomorrow god-forbid the vehicle gets stolen and is found used for small to big criminal activities - picking up the legally documented owner of the vehicle is "Investigation 101" for the law enforcement systems. No point in making it to the news for such silly root cause.

[WorkingGuru]

Find out if you could avail a "Certificate of Dissolution" of the lending company from the MCA / Registrar of Companies.

If yes, maybe you can attach that Certificate along with an Affidavit stating a confirmation of having fully repaid paid the loan along with whatever evidence of full repayment that you have. Also stating the Non-Availability of NOC due to the company being shut down.

If the RTO doesn't accept it (as they'd probably be unable to verify if the repayment documents you submitted are real or concocted), maybe contact a lawyer to file a petition praying to the juridical court for directions to the RTO for removal of Hypothecation. Whether thats through a PIL or the MV Act or Banking Laws, or Under some specific law(/s), maybe the lawyer would know better on that.

Edit : Also, maybe contact the Banking Ombudsman asking how they could assist with the matter.

[Gotham_City]

Originally Posted by GTO

Nope. Impossible.



This is the kind of idea I'm looking for on this thread. Am seeing documents on the RBI website itself. Would love it if BHPians can provide tips, as I'm surely not the first to go through this ordeal.

Typically RBI ombudsman helps customers on the complaints against NBFCs / Banks. You can possibly ask the NBFC closure documents and also place a request for NOC through the complaint route. Generally, RBI is quick to respond.

https://www.rbi.org.in/Scripts/Complaints.aspx

[Enigmatic]

Originally Posted by GTO

Facing a very peculiar dilemma here. The loan company that financed my Jeep shut down 2 decades ago!

GTO, what is the name of the loan company which has ceased to exist?

I may be able to help you with tracing down some documentation to prove that the company has ceased to exist.

Best,
Enigmatic

[drmohitg]

Just an idea but wouldn't an agent be able to get this done for a small amount of money? I have seen them do all kinds of stuff even without the relevant documents. Instead of going through the hassle of procuring so many documents for no fault of yours. If nothing else, an agent must be knowing how and what document to produce for the RTO.

[tud]

Originally Posted by GTO

I am sure there is a 4th option?

A visit to the RTO and meeting the officer/inspector might give a fresh perspective and may be a direct solution to your problem. Sometimes we tend to trust the agent blindly (based on the past experience), but the agent may not be aware of a simple practice that the RTO may have in place.

[aargee]

As I see it, there's no legal or direct way to obtain NOC unless getting hold of someone from the finance company who was in-charge of issuing NOC

Option 4 - You don't forge; pay a hefty service charges to driving school/agent & they should take care of everything. You can probably sleep in peace for not having your hands involved directly.

[vigsom]

Originally Posted by GTO

The loan company that financed my Jeep shut down 2 decades ago!

I am sure there is a 4th option?

I am not sure of the powers with the RTO. But going there for a 1-0-1 with the RTO, armed with the following evidence, will help for sure.

1. the loan having been cleared, and
2. the financing company shutting down

Example : In transfer of ownership cases, even non-acceptable proof of residence like a rental agreement is accepted if the owner goes personally with the original for verification.

The RTO would just need to be satisfied that the case is straight.