If the car is used in any illegal activity/terrorist activity, police and agencies would be at your door. If you have the sale receipt along with photocopies of the transfer letter which has been signed by independent witnesses, you will be released but after a 1/2 days of detention. Needless to say, it will be accompanied by mental torture (or even physical if you belong to middle or lower middle class), tension for your family and financial loss (as you will have to bribe the police officials).
I am actually amazed by your second last line. Are you saying that you sold the car without any sale receipt? or a properly filled transfer letter? If yes, then you immediately need to get a sale receipt and transfer letter properly filled. If this is the case, then it can have pretty serious consequences for you as the car is still in your name and their is no record of the sale (except verbal one which does not matters)