Purchased car on wife's name, bank disbursed the loan on my name

Question

► I purchased a new car. The booking, GST tax invoice, and RTO registration (BH Series) were done legally in my wife's name. However, the bank negligently disbursed the loan in my name without making my wife a co-applicant. To fix their audit failure, the dealership and bank are now proposing to retroactively cancel my wife's GST invoice, issue a new primary invoice in my name, and process an RTO 'name correction' so the RC shows me as the 01 First Owner. They are asking for my KYC and Form 60 to do this. Is it legally safe for me to agree to this retroactive invoice cancellation and RTO alteration, or does this expose me to future insurance, tax, or legal liabilities? Should I instead send a legal notice demanding the bank rectify the loan docket

Answer 1

Dear Client,

It is advisable that one should take extra caution before considering the option of cancelling the GST invoice retrospectively or changing the ownership details in the RTO. Given the fact that the vehicle had been booked, invoiced, and registered under your wife's name initially, the documents serve as a source of legal proof of ownership and history of the transactions made. Therefore, cancelling the GST invoice retrospectively and changing the registration certificate to indicate you as the “01 First Owner” might pose a few problems to do with taxation, claims from insurance companies, resale history, financing disclosure, warranty validity, and also accusations of tampering with the documents at a later stage. It seems like the mistake was caused due to wrong loan processing and audit at the bank level and therefore ideally one should try to rectify the situation by correcting the loan documents at the bank instead of rewriting the original purchase process. It would be wise on your part to ask for a written explanation from both parties regarding the legal justification of the action being taken. It is advisable to issue a formal legal notice to the Bank requiring them to make the necessary changes against you and your wife.

I hope this helps and if you have any further issues do not hesitate to contact us.

Purchased car on wife's name, bank disbursed the loan on my name

1 Answer