(a) The Office of Motor Vehicle shall examine and determine the genuineness, regularity, and legality of every application for registration of a vehicle, for a certificate of title therefor, and of any other application lawfully made to the office.
(b) The office may, in all cases, make investigation as may be deemed necessary or require additional information and shall reject any such application if not satisfied of the genuineness, regularity, or legality thereof, or of the truth of any statement contained therein, when authorized by law.
(c)
(1) If the office is not satisfied as to the ownership of a vehicle or that there are no undisclosed security interests in it, the office may accept the application, but shall, as a condition of issuing a certificate of title, require the applicant to file with the office a bond in the form prescribed by the office.
(2) The bond shall be in an amount equal to one and one-half (1 1/2) times the value of the vehicle, as determined by the office.
(3)
(A) The bond shall be conditioned to indemnify any prior owner and lienholder and any subsequent purchaser of the vehicle, or person acquiring any security interest in it, and their respective successors in interest, heirs, or assigns against any expense, loss, or damage, including reasonable attorney's fees, by reason of the issuance of the certificate of title of the vehicle.
(B) Any such interested person has a right of action to recover on the bond for any breach of its conditions, but the aggregate liability of the surety to all persons shall not exceed the amount of the bond.
(4) The bond, and any deposit accompanying it, shall be returned at the end of three (3) years, unless the office has been notified of the pendency of an action to recover on the bond.