not making vehicle transfer

1) Report the matter to the local police station (yours as well as his )  with his Voter ID and contact details, demanding help in restoration of vehicle to you as you fear illegal use. Get them to acknowledge your letter. Once you get the vehicle back, do not let it out of your possession until the transfer has been done. While returning let the buyer confirm the dates it was in his possession and that he will be liable for any illegal acts during such tenure.

Above may help you , although strictly speaking your liability is as you have said.

2) Permission is usually valid for 30 days but some people sign without date on such transfer forms which is not correct.