Enemy Property Bill passed by Rajya Sabha

The News

The Rajya Sabha  on 10th March 2017 passed the Enemy Property Bill. The purpose of the Bill is to amend a 49-year-old law to guard against claims of succession or transfer by heirs of property left behind by those who migrated to Pakistan and China in the wake of 1965 and 1962 wars respectively.

The Bill was passed by the Lok Sabha in March 2016When it was sent to the Rajya Sabha, the Rajya Sabha sent it to a select committee. Based on the Select Committees recommendations, the Government moved a number of amendments.

In the meantime, the Government had to bring Ordinances for a record number of 5 times to prevent the claims of succession or transfer by heirs of enemy properties across the country.

Recommendations by Select Committee
  • The Select Committee recommended that once the government implements the proposed amendments to dispose of the enemy property on the ground level by selling, the interest of the present occupant/tenant may be taken care of for the time being so that the tenants are not unsettled all of a sudden or the running business of the financial institutions/PSUs does not get disrupted.
  • The Committee was of the view that the just and fair system of delivery of justice should be incorporated in the rules governing the enemy property and the same should be given wide publicity for the benefit of stakeholders all over the country.
  • The Committee strongly recommended that proper investigation and due and transparent process must be followed during identification and declaration of enemy property.
  • After the proceedings of the custodian are over, the aggrieved person should be provided opportunity to represent his case to a designated officer of the Ministry of Home Affairs who must be easily available to the aggrieved persons. This should be specifically mentioned in the rules.
Proposed amendments
  • One of the proposed amendments is that once enemy property is vested in the custodian, it shall continue to be vested in him as enemy property irrespective of whether the “enemy, enemy subject or enemy firm” has ceased to be an enemy due to reasons such as death.
  • This includes all immovable property, all lockers and safe deposits; and all negotiable instruments such as promissory notes, shares, debentures and other commerce.
  • The new Bill ensures that the law of succession does not apply to enemy property; there cannot be transfer of any property vested in the custodian by an enemy or enemy subject or enemy firm; and, the custodian shall preserve the property till it is disposed of in accordance with the Act.
  • The Bill also prohibits civil courts and other authorities from entertaining disputes related to enemy property.
Custodian of Enemy Property for India

The Custodian of Enemy Property for India is  a government department that is empowered to appropriate property in India owned by those who migrated to Pakistan and China in the wake of 1965 and 1962 wars respectively..

The Enemy Property Act was promulgated in 1968. The Act authorised the Government of India to appoint a custodian for enemy property for India  to appropriate and manage enemy properties in India.

The office of the Custodian are located in Mumbai with a branch in Calcutta.

What is the Enemy Property issue all about?

In the wake of the 1962 war with China and the Indo-Pak wars of 1965 and 1971, there was a migration of some people from India to Pakistan and China.

Under the Defence of India Rules framed under the Defence of India Act, the government took over the properties and companies of such persons who had taken Pakistani and Chinese nationality.

The Centre designated these properties as “enemy properties” and vested them in the ‘Custodian of Enemy Property for India’, an office instituted under the central government.

The maximum number of such properties are in Uttar Pradesh.

Enemy Property Act, 1968 and the need for its amendment

In the wake of the India-Pakistan wars of 1965 and 1971, there was migration of people from India to Pakistan. Under the Defence of India Rules framed under the Defence of India Act, the Government of India took over the properties and companies of those who took Pakistani nationality.

These “Enemy Properties” were brought under the control of the Custodian of Enemy Property for India by the central government

The same was done for property left behind by those who went to China after the 1962 Sino-Indian war.

The Enemy Property Act was enacted in the year 1968 by the Government of India, which provided for the continuous vesting of enemy property in the Custodian of Enemy Property for India. The Central Government, through the Custodian, is in possession of enemy properties spread across many states in the country. In addition, there are also movable properties categorized as Enemy Properties.

In the later years, however, there were judgments by various courts that adversely affected the powers of the Custodian and the Government of India as provided under the Enemy Property Act, 1968.

One such court judgment was passed in the case of the estate of the erstwhile Raja of Mahmudabad, who owned several large properties in Hazratganj, Sitapur and Nainital. Following partition, the Raja left for Iraq and stayed there for some years before settling in London. His wife and son Mohammed Amir Mohammad Khan, however, stayed behind in India as Indian citizens and were active in local politics.

After The Enemy Property Act was enacted in the year 1968 by the Government of India, the Raja’s estate was declared enemy property.

When the Raja died, his son staked claim to the properties. After a legal battle that lasted over 30 years, an apex court Bench comprising Justice Ashok Bhan and Justice Altamas Kabir on October 21, 2005, ruled in favour of the son.

The verdict opened the floodgates for further pleas in courts across the country in which genuine or purported relatives of persons who had migrated to Pakistan produced deeds of gift claiming they were the rightful owners of enemy properties.

In July 2, 2010 when the President of India promulgated an ordinance that restrained courts from ordering the government to divest enemy properties from the Custodian, the 2005 SC order was rendered ineffective, and the Custodian regained its powers and again took over the Raja’s properties

The Enemy Property (Amendment and Validation) Bill, 2016

The amendments are aimed at plugging the loopholes in the Act to ensure that the enemy properties that have been vested in the Custodian remain so and do not revert to the enemy subject or firm.

Highlights of the Bill

  • The Bill amends the Enemy Property Act, 1968, to vest all rights, titles and interests over enemy property in the Custodian
  • The Bill declares transfer of enemy property by the enemy, conducted under the Act, to be void. This applies retrospectively to transfers that have occurred before or after 1968.
  • The Bill prohibits civil courts and other authorities from entertaining disputes related to enemy property.
Key Issues

The Act allows transfer of enemy property from the enemy to other persons. The Bill declares all such transfers as void. This may be arbitrary and in violation of Article 14 of the Constitution.

The Bill prohibits civil courts from entertaining any disputes with regard to enemy property. It does not provide any alternative judicial remedy (eg. tribunals). Therefore, it limits judicial recourse or access to courts available to aggrieved persons.