Custodian of Enemy Property – Enemy Property Act

The Enemy Property Act, 1968, an Act of the Indian Parliament, allows and governs real estate allocation in India possessed by Pakistani nationals. The act got enacted in the aftermath of the 1965 Indo-Pakistani war. The Guardian of Enemy Property for India, a government department, receives ownership. There are also enemy properties, which are movable properties.

As the Pakistani nationals left India in a hurry and left behind the significant estate, it became essential to regulate such property and to put it to better use. Hence, the Indian government took it upon itself to regulate abandoned land and better use it. Therefore, with the same objective, they enacted the act that would contain provisions for dealing with enemy property in India.

History

Following the Indo-Pak wars of 1965 and 1971, many Indians migrated to Pakistan. Following that, the Government of India took control of the properties and businesses run by people who took Pakistani nationality by exercising their powers under the “Defence of India Rules” framed under the “Defence of India Act.” Such properties would be referred to as “enemy properties” under the Enemy Property Act. The Central Government also entrusted such properties to the Custodian of Enemy Property for India, per the Enemy Property Act.

In 1968, the Government of India enacted the Enemy Property Act, which stated that enemy property vested with the custodian would remain so. The enemy property, which spanned several Indian states, would fall under the jurisdiction of its custodian. These enemy properties included both immovable and moveable elements. The Office of the Custodian of Enemy Property is based in Mumbai, with a branch in New Delhi.

In 2010, the then-Government issued an Ordinance amending the Enemy Property Act, 1968, to ensure the continuous vesting of enemy properties with the Custodian. Following the expiration of the Ordinance in September 2010, a bill requesting the relevant amendments and some additional changes got introduced in the Lok Sabha on November 15, 2010. However, during the Lok Sabha’s 15th session, such an enemy property bill was unable to be passed, and it lapsed.

The current government has been eager to amend the Enemy Property Act, following in the footsteps of the previous UPA government. Finally, on January 7, 2016, the President of India issued the Enemy Property (Amendment and Validation) Ordinance, 2016, to amend the Enemy Property Act 1968.

On January 2, 2018, former Minister of State for Home Hansraj Ahir told the Lok Sabha that 9,280 enemy properties, worth approximately Rs 1 lakh crore, had been left behind by Pakistani nationals and 126 by Chinese nationals.

Enemy Property- History

When war broke out in 1962 (with China) and 1965 and 1971 (with Pakistan), the Indian government took over the properties of Chinese and Pakistani citizens per the provisions of the Defence of India Acts. According to these laws, an “enemy” is any country that engages in aggression against India and its citizens. Their assets got labelled as “enemy assets.” Buildings, land, gold, jewellery, and company shares are examples of such properties.

The Tashkent Declaration, signed in January 1966, following the end of hostilities in the 1965 war with Pakistan, stated that both countries would negotiate the return of properties taken over by either side. In 1971, on the other hand, Pakistan sold off all of its adversary’s properties.

How did India handle enemy property?

Enacted in 1968, the Enemy Property Act permitted the perpetual possession of the enemy property in the Custodian of Enemy Property for India. The central government, through the Custodian, has control of enemy properties scattered across the nation.

Some movable properties also get classified as enemy properties.

Parliament passed the Enemy Property (Amendment and Validation) Bill, 2016, in 2017, amending the Enemy Property Act, 1968, and the Public Premises (Eviction of Unauthorized Occupants) Act, 1971.

The amended Act expanded the definitions of “enemy subject” and “enemy firm” to include the legal heir and successor of an enemy, whether an Indian citizen or a citizen of a non-aggressive country, as well as the succeeding firm of an enemy firm, regardless of the nationality of its members or partners.

The amended law stated that enemy property should continue to vest in the Custodian even if the enemy, enemy subject, or enemy firm ceases to be an enemy due to death, extinction, business winding up, or change of nationality, or if the legal heir or successor is an Indian citizen or a citizen of a non-aggressive country.

The Custodian might well discard the enemy properties entrusted to them in compliance with the conditions of the Enemy Property Act, with formal authorisation from the central government, and the government might issue guidelines to the Custodian for such a cause.

Governance of Enemy Property

The Enemy Property Act of 1968, which addresses the concept of enemy properties, is also in charge of managing and regulating enemy property issues.

However, some gaps in the Enemy Property Act must get filled, so the Minister of Home Affairs, Mr Rajnath Singh, introduced a Bill of Enemy Property (Amendment and Validation) of 2016 in the Lok Sabha in March of 2016. The Bill then got referred to the Rajya Sabha, which formed the Selection Committee and tasked it with producing a report.

The current legislation got introduced to replace the Enemy Property (Amendment and Validation) Ordinance, 2016, which the President announced on January 7, 2016. As a result, the current Bill seeks to amend the 1968 Enemy Property Act and the 1971 Public Premises (Eviction of Unauthorized Occupants) Act.

Following India’s external belligerence, the Central Government has designated some of the properties belonging to Pakistani and Chinese citizens as Enemy Property in this Bill. The Enemy Property Act of 1968 established a regulatory body known as the “Custodian of Enemy Properties in India” or “CEPI.” The Courts have no authority to intervene in CEPI orders.

Missings in the Enemy Property Act

The definition of “enemy” is ambiguous or vague, and it precludes the legitimate descendants of the enemy properties. Such an instance got discussed in the particular instance of the Raja of Mahmudabad, wherein the Raja opted to leave after partition. Still, his wife and son stayed Indian citizens shortly after and were proclaimed enemies and their possessions were considered enemy property after the 1968 law got enacted.

Another loophole in this Act would be that the justice system gets barred from intervening in the CEPI procedure.

Need for amendment in the Enemy Property Act

The amendment in the Enemy Property Act was intended to protect against claims of succession or transfer of property left by people who migrated to Pakistan and China after the wars. The amendments stripped legal heirs of any claim to enemy property. The main goal was to nullify the effect of a court decision in this regard.

According to Bill’s statement of objects and reasons, “recently, various judgments by various courts have adversely affected the powers of the Custodian and the Government of India as provided under the Enemy Property Act, 1968.” Given such interpretations by various courts, the Custodian is having difficulty sustaining his actions under the Enemy Property Act.

Reasons could get summarised as:

• The definition of “Enemy” and its subject must get changed because it includes legal heirs of the property regardless of the citizenship of the enemy subject.
• The rights and powers of the Custodian get mentioned in the Act in a very ambiguous and vague manner.
• Previously, the enemy subject could sell enemy property, but they could no longer do so.
• This Bill makes it illegal for Civil Courts to intervene in enemy property disputes.
• Following the passage of the Bill, the government will be able to use the enemy’s property exclusively for public purposes.

As a result of the passage of this Bill, the legislative intent of the Enemy Property Act, 1968, got clarified, and the amendments got introduced through this very Bill of the Enemy Properties (Amendment and Validation) 2016.

Enemy Property Act 2017

In 2017, the Enemy Property Act got amended. According to the amended act, the enemy property is any property that belongs to, is held by, or gets managed on behalf of an enemy, an enemy firm, or an enemy subject.

The new act make sure that the heirs of those who migrated to China and Pakistan during partition and later have no claim to the properties left behind in India by their forefathers. The succession law does not apply to enemy property, denying legal heirs any right over it.

The Indian government has begun auctioning off these properties in India, which number over 9400 and are worth more than Rs. 1 lakh crore. It is worth noting that, following the 1971 war, our neighbour Pakistan has already disposed of such properties in their country (Began on December 03, 1971).

Key Features Of Enemy Property Act 1017

• The first feature of this Act is a change in the definition of “enemy”, expanded to include the legal heirs of the enemy subject. It means that if the enemy subject dies, his or her heirs will be considered an enemy and will not inherit the property. As a result, the Central Government now has sole authority to use the enemy property.
• Second, this Act established a permanent status for the Custodian, which means that the Custodian will have all rights, title, and interest in the enemy property.
• Third, this Act paints a clear picture of the succession of enemy property, stating that the Law of Succession will not apply in the case of enemy properties.
• Lastly, the current Act states that Civil Courts would have no authority and would be unable to hear cases involving enemy property; only High Courts and the Supreme Court will have jurisdiction to hear such cases.

These provisions were created to close all of the loopholes in the 1968 Act. The Act stated ‘divesting of enemy property vested in the Custodian’ in Section 18.

It claims that the Custodian might very well disassociate enemy property entrusted in him and still in his custody only if the Central Government directs him to do so by general or special order.

The property could be relocated to the holder or any other relevant authority by the Central Government, and the property no longer vests in the Custodian after such transfer.

Case Laws Involving Enemy Property Act

Union of India vs Raja MAM Khan

• If the “Enemy” dies, the property will get transferred through succession. According to the Hon’ble Supreme Court, it will no longer get considered enemy property if the successor is an Indian citizen.
• Only the enemy will have access to the property; the Custodian will have no right, interest, or title to it.
• Section 6 of the aforementioned Act allows the enemy to sell the property.
• The Custodian’s authority includes managing, preserving, and controlling Enemy property for a set time and a specific purpose.
• The Law of Succession will apply to the enemy subject’s legal heirs.

Ambu Trikam Parmar vs Union of India & Others

Bombay High Court held that-

“According to the provisions of the Act, the power of the Custodian of Enemy Properties in India does not include the eviction of an occupant in the unauthorised occupation, without following the proper procedure such as filing of the suit or filing a suit for recovery.”

Conclusion

In the aftermath of the war, in the absence of guardians to look after the people’s property migrating to the enemies in-law nations, the government stood up to take over such properties and not waste them. To regularise the procedure and curb the discretionary practices, it became necessary to promulgate legal provisions. Hence, Enemy Property Act got formulated.

The Enemy Property Act aimed to limit the custodian’s arbitrary powers and allow the Central Government to intervene as needed. The Enemy Property Act initially granted the Custodian discretionary powers, but the application of the amendment of 2017 would limit the exercise of those powers. As a result, the Government’s decision to limit the Custodian’s powers get viewed positively.

After facing the financial crunch, the Modi government recently resourced to the enemy property to fill money in its chest. They decided to resort to raising money by selling the enemy properties. The attention on the Enemy Property Act is substantial in light of the government’s acute lack of funds to fund social welfare programmes and run development schemes.