Commissionerate System

Enemy Property Act

News Excerpt

Union Home Minister Amit Shah is going to lead a Group of Ministers (GoM) as they seek to dispose of what is believed to be 9,400 'enemy properties', with a total estimated value of Rs 1 lakh crore.

 

Sale of Shares Of Enemy Property

  • The Cabinet in November 2018 had given its go-ahead to the Department of Investment and Public Asset Management (DIPAM) to sell 'enemy shares' and 'enemy properties'
  • The government had vested these properties with the CEPI. As the CEPI has no expertise in selling of shares, the government has decided to rope in the Department of Investment and Public Asset Management (DIPAM) for sale of these 'enemy shares', many of which are not even listed on the stock exchanges.
  • The DIPAM will also decide on the modalities for appointing merchant bankers and legal advisors for sale of these shares. The proceeds of the share sale will be accounted for as disinvestment proceeds
  • In April 2019, the government has sold 'enemy properties' worth ₹1,874 crore, as it seeks to fast-track the sale process of such assets to meet the ₹90,000-crore disinvestment target set for the current fiscal.
  • It will lead to monetisation of moveable enemy property lying dormant for decades. Sale proceeds from this may be used for development and social welfare programmes.

 Pre-Connect

  • A total of 9,280 enemy properties had been left behind by Pakistani nationals, and 126 by Chinese nationals. The government estimates the value of these properties at approximately Rs 1 lakh crore.
  • Two other high-level committees will be set up to oversee the sale of these properties, which are currently under the oversight of the Custodian of Enemy Property for India under the Enemy Property Act (1968).

Enemy Property

  • Enemy property refers to property or assets held or managed on behalf of an enemy subject or an enemy company.
  • With respect to India, it refers to assets left behind by individuals who migrated to Pakistan or China and are no longer citizens of India.
  • These assets include land, buildings, shares held in companies, jewellery of the citizens of enemy countries.
  • It also included some movable property.
  • The Central government took over properties of citizens of China (in 1962) and Pakistan (in 1965 and 1971) under the Defence of India
  • Defence of India Act ceased to function after the wars. To administer these properties, the Enemy Property Act was enacted in 1968 which later got amended in 2017
  • The Tashkent Declaration,1966 included a clause that said India and Pakistan would discuss the return of the property and assets taken over by either side in connection with the conflict.
  • However, the Government of Pakistan disposed of all such properties in their country in the year 1971 itself

Analytica

ENEMY PROPERTY ACT, 1968

  • The Enemy Property Act, enacted in 1968, 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.
  • Properties of those who chose to migrate to China after the 1962 Sino-Indian war was also vested into the Custodian of Enemy Property (CEPI).
  • In 2017, Parliament passed The Enemy Property (Amendment and Validation) Bill, 2016, which amended The Enemy Property Act, 1968, and The Public Premises (Eviction of Unauthorised Occupants) Act, 1971.
  • It expanded the definition of 'enemy' to include the heir or successor of an enemy, “whether a citizen of India or a citizen of a country which is not an enemy; and the succeeding firm of an enemy firm, irrespective of the nationality of its members or partners.
  • The amendment disallows any claim to the property made from relatives of individuals who originally owned the property, prior to the government re-possessing them.
  • It 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.
  • Several provisions of the law will retrospectively come into effect from 1968 when the Enemy Property Act was enacted
  • The 1968 law prohibited the transfer of enemy property by an enemy if it was against public interest or if it was done to avoid transfer of property to the custodian. The new law prohibits all transfers by an enemy. The amended law says that enemy properties will continue to vest with the custodian, even after the death of enemies; even if the legal heir is an Indian; and even if the enemy changes his nationality
  • Under the old law, the custodian could sell an enemy property only "in the interest of preserving the property" or "to secure maintenance of the enemy or his family in India". Now, the custodian can dispose of an enemy property after getting approval from the Central government.
  • Earlier, the custodian was supposed to maintain the enemy and his family if they are in India from the income derived from the property.  The custodian will no longer be responsible for providing for the enemy and his family.

 

Conclusion

The thrust of the enemy protection (Amendment) Act was to guard against claims of succession or transfer of properties left by people who migrated to Pakistan and China after the wars. This was done with an aim to negate the effect of a court judgment in this regard in which the court ordered in favour of Son of erstwhile Raja of Mahmudabad when he claimed stake on raja's property after his death.

PEPPER IT WITH

Erstwhile Raja of Mahmudabad Case, DIPAM, CEPI