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Judgment
Ravi Krishan Kapur, J
The petitioner assails the impugned order dated 22 February, 2016, passed by the Joint Municipal Commissioner (Revenue and Supply), The
Kolkata Municipal Corporation in compliance with an earlier direction passed by this Hon'ble Court.
By the impugned order a representation dated 23 December, 2015 of the petitioner seeking exemption from payment of municipal taxes and
surcharge in respect of premises no.6 Netaji Subhas Road, Kolkata-71 (the premises) belonging to the petitioner has been rejected by the respondent
Corporation.
The petitioner is the owner of the premises commonly known as the ""Royal Exchange"". Interestingly, the premises was once the residence of Sir
Robert Clive, the first Governor General of India and is famous for its architectural beauty. The premises comprises of a four storied building. The
entire building excepting the space on the ground floor is used for accommodating the offices of the petitioner no.1 and various trade associations. The
ground floor is tenanted by the Syndicate Bank.
Significantly, the petitioner is one of the first associations of its kind in the country. The petitioner is a company within the meaning of Section 8 of
the Companies Act, 2013. A portion of the premises is also the registered office of the petitioner. The petitioner claims to play a key role in the
development of trade, commerce and industry in the West Bengal and it is alleged that the petitioner has worked towards development of several
infrastructural facilities in the State of West Bengal.
The primary contention of the petitioner is that the petitioner should be exempted from payment of property taxes and surcharge in respect of the
premises. In an earlier writ petition being WP No.135 of 2014, the petitioner had been granted liberty to make a representation with regard to an
alleged public-private partnership arrangement or agreement by and between the petitioner and the respondent Municipal authorities. By the said
representation, the petitioner sought exemption from payment of property taxes and surcharge in respect of premises. The petitioner assails the
impugned order in this proceeding, whereby such contention of the petitioner seeking exemption of property taxes has been inter alia rejected by the
respondent Municipal authorities.
It is alleged on behalf of the petitioner that a public private arrangement or agreement ought to be inferred on the basis of the documents annexed to
the writ petition (dated 26 May, 2005, 28 February, 2010 and a number of other documents annexed at pages 152-158, 232 of the petition).
Significantly, the premises of the petitioner has been declared as a heritage building. Moreover, in view of the aforesaid documents it is submitted that
there is a public-private partnership between the petitioner and the Kolkata Municipal Corporation whereby a decision had been taken by the
respondent Corporation to exempt the petitioner from paying municipal rates and taxes.
The petitioner relies on Section 425K of the Kolkata Municipal Corporation Act and contends that the Corporation has the power to exempt wholly
or partly the owner of a heritage building from the payment of municipal rates and taxes. The petitioner further relies on Section 192 (1)(5) of the
Kolkata Municipal Corporation Act to contend that the Municipal Commissioner has the power to exempt the petitioner from making payment of all
such taxes.
It is in this background, that the petitioner assails the impugned order on the ground that the authorities failed to consider the relevant
correspondence and ought to have permitted the petitioner's prayer and allowed exemption of taxes in respect of the premises.
It is contended on behalf of the Corporation that the impugned order warrants no interference whatsoever and that the same has been passed after
considering the entire facts of the instant case. The Corporation contends that representation of the petitioner has been duly considered in the
impugned order and the respondent authorities have taken into consideration the provisions of Section 425K of the Act. It is further submitted on
behalf of the Corporation that the outstanding property taxes due and payable by the petitioner aggregates approximately Rs.30 crores (inclusive of
interest and penalty). It is further submitted on behalf of the respondent Corporation that the petitioners have on false and frivolous pretexts unduly
delayed the payment of taxes and penalty in respect of the premises and there is no legal basis to the claim of the petitioner.
I have perused the pleadings filed on behalf of the parties and have also considered the rival contentions of the parties. At the outset, section 425K
of the Kolkata Municipal Corporation Act (""the Act"") should be noticed which provides as follows:
If the owner of a heritage building enters into an agreement with the corporation to maintain, preserve and conserve such heritage building property at
his own expenses, the corporation may, in such case, exempt wholly or partly the owner of such heritage building from payment of rates of taxes or
fees for supply of water or any other charge in respect of such heritage building.
Chapter XXIIIA of the Act contains sections 425A to 425P which have been inserted in the Act to deal with heritage buildings. These provisions
pertain to a classification of a building as a heritage building as well as steps which mandate the preservation and conservation of heritage buildings. I
am of the view that, on a plain and an ex-facie reading of Section 425K, it is necessary for a party seeking an exemption of Municipal rates and taxes
to have entered into an agreement with the Corporation whereby a party is granted an exemption whether wholly or partly in respect of payment of
rate and taxes in respect of such premises.
The main contention of the petitioner is that, in view of the correspondence exchanged between the representatives of the petitioner and the
Municipal Commissioner a proposal was considered for a public private partnership arrangement between the petitioner and the respondent
Corporation whereby the petitioner would be afforded exemption to pay Municipal rates and taxes. The petitioner principally relies upon a letter dated
2 June, 2004, inter alia, granting heritage status to the premises owned by the petitioner. Thereafter, the petitioner relies on a letter dated 6 May, 2005
whereby the then Municipal Commissioner had informed the petitioner that in view of the public-private partnership arrangement between the
petitioner and the respondent it was decided that the petitioner would be exempted from payment of property taxes to the Corporation. The petitioner
also relies on a communication dated 6 May, 2005 whereby the then Municipal Commissioner had approved a draft of a public- private partnership
agreement by and between the petitioner and the Kolkata Municipal Corporation, inter alia, highlighting that both the parties were heritage institutions
and that the petitioner was continuing to play a proactive role for promotion of trade and investment in the city of Kolkata. The petitioner further relies
on a letter dated 24 May, 2005 whereby the respondent authorities are said to have acknowledged that meetings were held in respect of the public-
private partnership arrangement to be made between the respondent Corporation and the petitioner. The petitioner also relies on a Memorandum of
Understanding between the petitioner and the respondent Corporation which though signed by the petitioner remained unsigned on behalf of the
Corporation. It is alleged that the said document was a draft forwarded to the respondent Corporation for its signature.
On the basis of all the documentary evidence, it is alleged on behalf of the petitioner, that there was in fact a public private partnership agreement
entered into between the petitioner and the respondent Corporation whereby it was agreed that the petitioner would be granted exemption from
payment of rates and taxes in respect of the premises. Admittedly, there is no final formal document which has been signed and executed by both the
parties and which recorded and declared to be made between the petitioner and the respondent Corporation.
It is well settled that to be an enforceable contract it must be proved that there was a final and a concluded bargain containing all necessary terms
and which left nothing to be settled in the future. As a proposition of law, until the parties have agreed on everything which they consider required
agreement, there can be no contract. In the facts of the instant case, on the basis of the documents annexed to the petition even on the basis of the
best arguable case on the petitioner, I am of the view that there is no final and binding agreement by and between the petitioner which the petitioner
can possibly enforce in a Court of law. As a rule of law, negotiations do not make an enforceable contract. In the facts of the instant case what the
petitioner has failed to establish, was the full and final settlement of all the necessary terms and conditions in order to enforce a binding contract.
After considering all the documents relied on by the petitioners and exchanged between the parties it seems to me that no final or binding or
enforceable agreement was entered into by and between the petitioner and the respondent authorities whereby the petitioner could claim exemption
from payment of any municipal rates, taxes or fees in respect of the premises.
I am of the view that in the facts of the instant case, the petitioner's best arguable case does not give scope for granting any relief as prayed for in
this petition. There is no enforceable legal right which has crystallized in favour of the petitioner of which the petitioner could seek enforcement of in
this petition. The petitioner cannot claim any right simply on the basis of a proposal or that the premises have been declared to be a heritage premises
and this necessarily mandates exemption of taxes in respect of the premises. The ultimate decision to award the petitioner exemption in respect of
payment of municipal rates and taxes is a policy decision and in view of the material disclosed in these proceedings, I am unable to hold that there is
any final, enforceable or crystallized right in favour of the petitioner exempting the petitioner from payment of Municipal rates and taxes. Accordingly,
I find no reason to interfere with the impugned order. I find that there is no violation of the decision making process. On the contrary, the view taken
in the impugned order was certainly a view that cannot be said to be illegal, irrational or unreasonable.
In view of the aforesaid, the writ petition fails and is dismissed without any order as to costs. It is unfortunate that an issue of payable municipal
rates and taxes has been pending since 1987 i.e. when the petitioner first received a notice under Section 184(3) of the Kolkata Municipal Corporation
Act, 1980. W.P. No.534 of 2017 stands dismissed.
Urgent certified photostat copies of this judgment, if applied for, be supplied to the parties upon compliance of all requisite formalities.