CHENNAI: Taking a cue from Regional Transport Offices in Nagpur, the transport department has made it mandatory for financiers of vehicles in the State to possess trade certificates. The intention is to regulate better hire purchase agreements of motor vehicles.
The RTOs in the State would reject applications for making or cancelling hire purchase and hypothecation approvals in registration certificate (RC) book for not producing a trade certificate, according to a department circular issued in March.
Tamil Nadu Transport Commissioner C.P. Singh told The Hindu that financiers must produce the certificate before repossessing vehicles when drivers default on payment or otherwise. Generally, the practice is to issue trade certificates only to dealers of new motor vehicles, whereas financiers, repair shop owners and vehicle body builders also come under “dealers” as defined in the Central Motor Vehicle Rules, 1989.
Mr. Singh said hire purchase financiers of vehicles such as autorickshaws and trucks often dealt in vehicles illegally. “This step would make their transactions transparent and help the government earn revenue,” he said. The step can have far-reaching implications for those operating autorickshaws, trucks and lorries. However, many people seem to be unaware of the department’s move.
R. Neeraja, a lecturer in a city college, failed to get her car hypothecation cancelled in the registration certificate book in an RTO recently though she had repaid the loan two years ago. The private bank that financed her car, which has its head office in Mumbai, denied any knowledge of the need to produce a trade certificate.