P.K. Misra, J.
1. Both the aforesaid writ applications relate to the same question and as such are disposed of by this common judgment.
2. The petitioner in OJC No. 3283 of 1996 (hereinafter called the 'purchaser') purchased a vehicle bearing No. OSO 3411 in an auction held by the Orissa State Financial Corporation (hereinafter called the 'Corporation' on 19-1-1996. The vehicle was seized by the Corporation under Section 29 of 'the State Financial Corporation Act from Sunil Kumar Behera (hereinafter referred to as the 'original owner'). The purchaser in his writ application has prayed for a direction to the Regional Transport Authority to effect the transfer of ownership of the vehicle in his name and to issue road permit without insisting upon payment of arrear tax. In the alternative, he has prayed for a direction to the Corporation to deposit the tax demanded by the Regional Transport Officer. He has also prayed for a direction regarding payment of Rs. 45,000/- towards loss caused due to the negligent action of the Corporation. The connected OJC No. 6052 of 1996 has been filed by the Corporation for a direction to the Regional Transport Officer not to insist upon payment of the arrear tax for the period from 1-10-1993 to 31-3-1996 as indicated in the letter dated 19-8-1996 issued by the Regional Transport Officer, Dhenkanal, as per Annexure-8 equivalent to Annexure-4 in the connected writ application OJC No. 3283/96). The Corporation has further sought for a direction to the Regional Transport Officer to act in accordance with the instruction issued by the Transport Commissioner-cum-Chairman, State Transport Authority as per Annexure-1 (Annexure-3 in OJC No. 3283/96).
3. The original owner who had purchased the vehicle after availing the loan from the Corporation failed to pay its instalment to the Corporation. He has also defaulted in paying the road tax. As already indicated, the vehicle after being seized under Section 29 of the State Financial Corporation Act was purchased by the petitioner of OJC No. 3283 of 1996. His application for change of ownership and for issuance of a permit to ply the truck proved futile as the Regional Transport Authority, Dhenkanal, who is opp. party No. 1 in both the writ applications, insisted upon payment of road tax for the period from October, 1993 to March, 1996.
4. The purchaser has relied upon the conditions of sale as per the agreement between himself and the Corporation. The Corporation and the purchaser have relied upon the instruction issued by the State Transport Authority on 8-10-1991. The conditions of sale have been enumerated in letter dated 6-2-1966 issued by the Corporation to the purchaser, which has been annexed as Annexure-1 to OJC No. 3283/96. The conditions relevant for the purpose Of this writ application are extracted hereunder:
'3. 10. The Corporation will not be liable for statutory dues, such as M.V. taxes/Road tax etc., if any, against the vehicle for the period to or after the sale. You shall also not be liable for such dues, if any, for the period prior to the sale.
3. 18. The Corporation shall write to the concerned RTO for transfer of ownership of the vehicle in your favour and the arrear taxes, M.V. dues, etc. if any, shall be payable by the original loanee. You have however, to negotiate with the concerned RTO for transfer of the vehicle in four favour with hypothecation continuing in favour of O. S. F. C.'
The aforesaid conditions contained in Aunexure-1 are binding on the Corporation. The learned Standing Counsel appearing on behalf of the Transport Department, however, contends that notwithstanding such agreement between the Corporation and the Purchaser, the provisions contained in Section 12 of the Orissa Motor Vehicles Taxation Act, 1975, are to prevail. Section 12 of the aforesaid Act reads as follows :
'12. Liability of successor to pay arrears --
(1) If the tax leviable in respect of any motor vehicle remains unpaid by any person liable for payment thereof and such person before having paid the tax has transferred the ownership of such vehicle or has ceased to be in possession or control of such vehicle, the person to whom the ownership of the vehicle has been transferred or the person who has possession or control of such vehicle shall be liable to pay the said tax to the taxing officer.
(2) Nothing contained in this section shall be deemed to affect the liability of the person who has transferred the ownership or has ceased to be in possession or control of such vehicle, for payment of the said tax.'
A bare reading of Section 12(2) clearly indicates that liability of the person who has transferred the ownership or has ceased to be in possession or control of the vehicle for the period during which the vehicle was under his possession or control, continues. Under Sub-section (1) however, it is made clear that the subsequent transferee or the person in possession or control of the vehicle is also liable to pay the arrear taxes which are otherwise payable by the original owner/possessor 'under Sub-section (2). It is axiomatic that if the subsequent purchaser has to pay an arrear tax otherwise payable by the original owner, he has the right to realise the same.
To overcome the aforesaid statutory provision which prima facie, makes the Corporation as well as the subsequent purchaser also liable 'for arrear tax dues of the original owner, reliance has been placed by the purchaser as well as the Corporation on the letter dated 8-10-1991 issued by the Transport Commissioner-cum-Chairman, State Transport Authority, to all Regional Transport Officers, annexed as Annexure-3 to OJC No. 3283/96. The aforesaid executive instruction was issued on the basis of discussion with the Corporation and was envisaged to cover the question of change of registration and collection of dues et cetera in respect of the vehicles seized by the Corporation under Section 29 of the State Financial Corporation Act and subsequently sold to others. The relevant paragraphs of the aforesaid instruction are as follows :
'(i) Communication of Property List by OSFC :
The OSF will immediately furnish to the concerned RTO, details of properties and securities bound to it in agreement executed between the OSFC and the defaulting owner. It will also collect the list of properties of the said owner by its officers close to the locality of the said owner and send the list to the concerned RTO. This will facilitate in filing the Certificate Cases against the owner who has arrear of M. V. Tax/Addl. Tax to pay. (ii) Filing of Certificate Case:
The RTO will immediately file Certificate Case against the previous owner for the arrear of tax/penalty pertaining to his period. The arrear tax pertaining to the period during which the vehicle is kept in the custody of the OSFC need not be included in the demand. (iii) Noting of arrear in R. C. Book :
The amount of arrear/penalty outstanding against the previous owner, should, however, be recorded in the R. C. Book prominently so also in the relevant page of the G. R. Volume. While noting it, it should be also mentioned thereunder that the outstanding arrear will not amount to seizure of the vehicle under Section 17 (2) of the O. M. V. T. Act, 1975 nor should it be treated as disqualification for issue of permit to the subsequent owner who purchases it from OSFC on its seizure from previous owner under the provisions of the Section 29 of the SFC Act, 1951. (iv) Transfer of Ownership : In spite of the fact that arrear pertaining to the previous periods in respect of vehicle financed by OSFC is pending, transfer of ownership should be effected in the name of the subsequent purchaser in the above cases, if OSFC gives it in writing to the RTO, the new owner applies for it in the prescribed manner and pays the appropriate fee.' The aforesaid clauses contained in the instruction make it clear that notwithstanding the arrears in respect of a vehicle, the ownership in respect of the vehicle in favour of the subsequent purchaser should be changed and the RTO should not insist upon payment of arrear dues. Similarly as per Clause (ii), the RTO was required to take steps for realisation of arrear tax/penalty from the original owner by filing certificate cases. Under Clause (iii), it has been clarified that the outstanding arrear as against the original owner should not be a ground for seizure of the vehicle under Section 17(2) of the Orissa Motor Vehicles Taxation Act and should not be treated as a disqualification for issuance of permit to the subsequent purchaser.
5. It is no doubt true that the provisions of the Orissa Motor Vehicles Taxation Act are to prevail if there is any conflict between the provisions of the Act and the instructions issued by the STA. The liability of a subsequent purchaser or possessor of the vehicle under Section 12 (1) is not wiped out under the aforesaid instructions issued by the STA. However, since the instructions had been issued to facilitate collection of tax from the original owner, the position is clear that initially the RTO has to proceed against the original owner by filing certificate case which is in consonance with Section 12(2). If the RTO after proceeding, as aforesaid, is unable to realise the arrear dues, he may proceed against the Corporation, which becomes a successor-in-interest. Similarly, bareft of anything else, the RTO can also proceed against the ultimate purchaser of the vehicle. However, since a specific condition has been included in the present case, exonerating the subsequent purchaser from such a liability, it is the duty of the Corporation to clear up the arrear dues if the same remain unpaid after institution of any certificate case against the original owner.
6. On the basis of the aforesaid discussion, the writ application of the purchaser (OJC No. 3283/9(5) can be disposed of on the following terms :
(i) The RTO is to allow change of ownership in the name of the purchaser within a period of one month from the date of receipt of this order, without insisting upon payment of arrear dues ;
(ii) The RTO has to proceed against the original owner for realisation of arrear dues by filing certificate case and if any amount remains unpaid, the RTO may realise the same from the Corporation and not from the purchaser ;
(iii) If the Corporation is required to pay any amount on account of the arrear tax dues of the original owner, the same can be realised by the Corporation from the original owner by taking appropriate steps in accordance with law.
7. So far as the writ application of the Corporation in OJC No. 6052 of 1996 is concerned, the aforesaid direction shall also govern the field. However, a dispute regarding the quantum of arrear tax as demanded by the R. T. O. has been raised which remains to be answered.
8. It has been contended on behalf of the Corporation that off-road intimation having been given, the liability of the original owner and/or of the Corporation, if any, has to be reduced. The Corporation has filed intimation dated 12-6-1995 indicating that the vehicle, was to remain off-road for the period from 9-6-1995 to 30-6-1995. The aforesaid intimation was received by the R.T. O., Dhenkanal, on 19-6-1995 and as such can be effective from that date only. The subsequent intimations under Annexures-3 and 4 which relate to the periods from 1-7-1995 to 31-12-1995 and 1-1-1996 to 30-6-1996 respectively were received in time. It is, however, contended on behalf of the S. T. O. that since the vehicle had been kept at Cuttack, and not within the jurisdiction of the R. T. O., Dhenkanal, the intimations regarding 'off-road' cannot be considered to be valid. Section 10 of the Orissa Motor Vehicles Taxation Act prescribes that a prior intimation has to be given indicating the place where the motor vehicle is to be kept. It nowhere lays down that the motor vehicle has to be kept within the jurisdiction of the R. T. O. to whom the required intimation is given. Keeping in view the facts and circumstances of this case and the provision contained in Clause (vii) of Annexure-1 of the writ petition filed by the Corporation in OJC No. 6052/96 (which is equivalent to Annexure-3 of OJC No. 3263/96 filed by the purchaser), we are satisfied that no tax is leviable for the period, from 19-6-1995 to 30-6-1996. The notice/intimation issued by the R. T. O. demanding payment of tax till 30-6-1996 is as such modified and it is made clear that arrear tax can be realised for a period till 19-6-1995. As already indicated, the said arrear tax for the period till 19-6-1995 is to be realised from the original owner by filing certificate case and if any tax remains unpaid, the same can be realised from the Corporation.
Subject to the aforesaid observations, both the writ applications are disposed of. There will be no order as to costs.
D.M. Patnaik, J.
I agree.