Car Transfer Issue

I had purchased a car from a second hand car delaer and drove it for a while but i didnt knew that the car owner is a defaulter but has as the bank has given NOC so there is loan on the car . And so i told him to not transfer the car under my name . Later i sold the car to a person i met on Facebook and he took the car . After Some days he took the paper of the original car from the dealer and demanding to take the car back as no transfer has been done . Now why is he demanding to take the car back because the owner of the car is a bank defaulter and he/she is not present on the given address as said by the third person who bought the car. the third owner is demanding KYC documents from me which i don't have since the car is not under my name and my agent says that the KYC documents are present at bank so the car transfer can be done . Now third party is harassing's me to take the car back . Should i report to the police and also i want to know whether its my fault or not as i gave the original papers to him on trust and i am ready to pay the transfer fees and get it transfeered