If you have taken car loan and made the complete payment to the bank either eg by pre-paying your loan amount or by paying out the last EMI of your loan tenure, then the first thing you should do is to get the vehicle transferred from bank’s name to your own name. This process is called removal of hypothecation. It is important to get this done since the bank should no longer own/control the vehicle and the rightful ownership should now be in your own name.
One of the readers of Inficone; Srivats P got the hypothecation of his vehicle removed this month and was kind enough to share his experience @ Delhi RTO with us. Srivats is the developer of the open source network traffic generator tool called Ostinato.
I hadn’t got my hypothecation removed from my car’s registration RC booklet despite paying back the bank car loan as far back in time as year 2003. Ideally, the hypothecation removal should have been done at that time itself. However, because of my laziness this activity never got done.
This month, I finally decided to undertake this long pending activity. So I started the process by procuring the Bank NOC again since as per my internet research, the NOC is supposed to be valid only for 6 months after issue date( sometimes even lesser ). However, the Bank NOC that I had did not have any validity information mentioned. In any case, I decided not to take a risk and get a new one.
For removal of hypothecation, you will need to have the following from the bank
- Two copies of Form 35 ( which mentions that hypothecation agreement between you and the bank is terminated )
- NOC certificate ( which mentions that bank has no objection for removal of hypothecation )
I went the whole hog and got fresh copies of both the Form 35 and NOC (mind you, getting these documents weren’t an easy task since my loan was from a public sector bank -- I had to make several visits over several days to the bank and plead my case) .
Once I got the documents from the bank, I collected all the other documents that are required for removal (termination) of hypothecation. The full list of required documents are --
- Original RC
- Original Form 35 (2 copies duly signed by the bank and registered owner)
- Original Bank NOC
- Attested copy of valid insurance
- Attested copy of valid PUC certificate
- Attested copy of PAN Card
- Attested copy of Address Proof
- Form 33 (if current address is different from the one in RC)
Some notes about the documents --
- You need two copies of Form 35. I saw someone with a single copy of Form 35 being sent back.
- I had read everywhere that the Bank NOC is supposed to be on the Bank letterhead. However, mine was not on letterhead, it was just a printout on plain paper; there was however a bank stamp/seal on the letter alongwith the signature. I was worried if this would be accepted -- thankfully it was.
- My insurance is due to expire in 10 days and I was worried if I would be asked to come back after 10 days with the new insurance. Although I had renewed my insurance I hadn’t yet received my renewed insurance certificate for the next year. I called up my insurer -- Tata AIG and they sent me a scanned copy by email. One day before I went to the RTO, I received the actual certificate by courier also. But at the end of the day, I wasn’t asked for it.
- Although the documents list on the Delhi Transport Deptt. website does not mention PAN card, it is needed -- at least at the Sheikh Sarai RTO.
- I gave my Voter Id card as address proof. Since my current address in the Voter Id card was different from the one in my RC, I was also required to submit Form 33 for change of address. You are supposed to get the change of address done within 30 days of moving to the new address. Unfortunately I hadn’t done that and as a result was required to pay a fine at the rate of Rs.100 per month from the date of issue of the Voter Id card. It looks like the date mentioned on my Voter Id card was used as the reference date for my movement to new address.
- All photocopies have to be attested by gazetted officer/notary public. There are several places in the RTO/shopping complex where you can get this done. I was charged Rs. 10 for each document. Usually you are required to show original documents before they attest the photocopies and hence I had taken my original documents also, but I wasn’t asked to show them anywhere at all.
- I was asked to get my Form 33 (Change of Address, which was in original!!) also attested.
At the RTO
I reached the Sheikh Sarai RTO around 10AM. I got photocopies made of the Form 35 and Bank NOC (for my personal records since I was submitting the originals), followed by the notary attestation of the copies of PAN Card, Voter Id Card, Insurance and PUC.
Once all my papers were in order, I went to the 3rd floor, Room 322, Counter 3 to get my documents verified. After a wait of around 30 mins in the queue, my turn arrived and I handed my documents -- after several minutes of verification of the documents and a check on the computer, the counter person returned my documents saying my Form 33 (Change of Address) was not attested. Although I didn’t understand why one would need to attest an original form that is filled by hand and signed in original, I took Shivam’s advice on being polite (tatkal passport post) and went back downstairs to the notary to get the Form 33 attested. The notary, on seeing the document, refused to do so saying, “you don’t need to get this attested”, “I cannot attest this” etc. and refused to hear my pleas that the counter person is asking for the same. Thankfully, at this time, an acquaintance of the notary came to meet him and convinced him that “sometimes the counter person does ask for it”. Another Rs. 20 (instead of Rs. 10 -- don’t ask why, I don’t know!), and I had an attested Form 33.
I climbed back up the 3 floors to Room 322, only to discover that in the meantime the queue had more than doubled in size, even spilling out of the room! And so I joined the queue to await my turn -- again. My dad was there alongwith me (he had to get his driving license renewed) and he stood in the next counter’s queue (where you need to pay the fees) in a bid to reduce our total time at the RTO. Around 45 minutes later, my dad reached the counter, but since I hadn’t reached Counter 3 for step 1, we couldn’t proceed to step 2 at Counter 4, so he let the people behind him go up to the counter window till I finished step 1. Once I reached the Counter 3 window, I handed the person the papers saying I had got the Form 33 attested as requested by him to which he replied that I need not have come back to Counter 3 and could have directly gone to Counter 4! But right after saying
that, the person proceeded to recheck all my documents and data on his computer and finally gave me the go ahead to go to Counter 4.
At Counter 4, I paid the requisite fees for the hypothecation (Rs. 100), fees for the change of address (Rs. 20) and the fine for delay in notifying change of address (Rs. 100 per month of delay)
After getting a receipt from Counter 4, I was asked to go to Counter 5 to submit fees for the smartcard RC (my current one was a paper RC). The fees for the same was Rs. 370 and I was asked to come back after 20 days to collect the new RC.
I asked the person at the counter, if I had to come personally to collect it or could someone else collect it on my behalf with an authorization letter and was told that the latter was possible. I also saw a person submitting the documents on someone else’s behalf alongwith an authorization letter (however the actual owner needs to sign the Form 35 and Form 33, not the authorized person).
All in all, it took around 2 hours at the RTO to submit my documents for removal of hypothecation -- it would have taken more if my dad hadn’t stood in the second queue in parallel!
Based on my experience, here’s what I advise --
- Make sure you have all the required documents
- Make sure to attest all photocopies -- carry original documents, just in case.
- Be polite -- don’t argue!
- Take a friend along -- may take less time in the queues!
I am now in the waiting mode for getting the new RC. Once I get the same, would update here with the associated experience.
Update (Nov 9, 2010) -- I went to the RTO this morning (after 18 days) and got my new smartcard RC with the hypothecation removed. I reached there at 9:55AM and I had the RC in my hands by 10:00AM -- within 5 mins! Apparently the RTO starts at 8:30AM and there isn’t much of a rush before 10:00AM.
I hope the information presented above would benefit folks who would be looking to get the hypothecation removed in the future. If you have any queries OR want to share your own experience with this process -- please update the same in the comments section.