Introduction
Since its independence, India has fought four wars, three against Pakistan and one against The Republic of China.[1] None of the clashes between India and Pakistan have managed to resolve disputes between the two countries. The 1965 Indo-Pak war did however persuade both India and Pakistan to come to an understanding. Its effect led to the enactment of The Enemy Property Act of 1968 (EPA) in India.[2] It was considered important to bring about such a law at the time due to the lack of proper management of unattended properties of voluntary migrants. Pakistan sold or disposed off all its enemy property in 1971. The EPA empowers the government to act as a custodian of these properties. Through this article, the author will try to explore whether the government, a custodian, has the right to sell an enemy property by analysing the Enemy Property Act of 1968 (EPA) and amendments to the same.
Who is an Enemy and What is an Enemy Property?
Section 2 of the EPA defines an enemy as any individual who is a citizen of a nation considered an enemy and their legal heirs irrespective of their nationality. Hence, if the legal heir of a Pakistani citizen has acquired the citizenship of a non-enemy nation, they would still be considered an enemy under the EPA. Enemy property is any property left behind in India by those who moved and acquired Pakistani or Chinese citizenship. The owners of this land leave it behind in such a manner that it does not have any custodian. Following the EPA, the government formed the Custodian of Enemy Property for India (CEPI) which is governed by the Ministry of Home Affairs. CEPI is responsible for managing all enemy properties in India including immovable property, shares, debentures, promissory notes, safes, etc. The act bars the custodian from selling the enemy property and is only responsible for holding it as a trust in the name of the enemy national.
Before a 2005 apex court judgment, EPA denied even legal heirs of enemies born in India to inherit a property deemed to be an enemy property.[3] In the case, Mohammed Amir Khan fought a legal battle against the government to claim his family property spread over Uttar Pradesh on the grounds that his mother had opted to stay in India while his father had decided to migrate to Pakistan. The Supreme Court directed the custodian to return his property and established that legal heirs residing in India could inherit enemy property.
In 2010, the Enemy Property (Amendment and Validation) Second Bill was enacted. Section 18 of the amendment incorporated the Supreme Court’s verdict to prevent any property from being illegally encroached. With this, the government proposed to amend the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 in such a way that the custodian would have the power to evict unauthorized users of properties and have full control over it.
Finally, the Enemy Property (Amendment and Validation) Bill was passed by the Parliament in 2016.[4] This bill gave the custodians more power; it prohibits the transfer of enemy properties through any means, including oral wills or gifts, without the permission of the competent authority.[5] The bill also specifies that inheritance laws do not apply to these properties, meaning that legal heirs cannot claim these properties if they fall under the definition of enemy property. The amendment also empowered the government to sell or dispose of enemy properties as deemed necessary, aiming to resolve long-standing disputes and prevent illegal occupation or misuse of these properties.[6]
The amendment claims to have a retrospective application which poses a problem to all enemy property-related disputes already settled in the past. The law also now allowed the custodian to sell property as it deemed necessary.
Whether a custodian should be allowed to sell an Enemy Property?
In 2019, for the first time, the government sold enemy property shares in Wipro worth 1,100 crore. These shares were owned by a Pakistani migrant. Most of these shares were bought by Life Insurance Corporation of India. This sale was possible due to the 2016 amendment which ensured that no successors of enemy property not residing in India could inherit the property. The act aimed to hold the government responsible as a custodian of the property to hold it on behalf of the migrants. The sale of Wipro shares was made without prior intimation to the legal heirs of the owner.
In a recent judgment passed by the Supreme Court of India, Lucknow Nagar Nigam v. Kohli Brothers Colour Lab, Justice BV Nagarathna and Ujjal Bhuyan noted that a custodian for any enemy property in India does not empower the ownership of such property.[7] The enemy properties vest in the custodian only as a trustee for the management and administration. The vesting of the enemy property with the custodian is a temporary measure.[8] The vesting of enemy property in the Custodian is not free from encumbrances but reflects the status of the property as held by the enemy, enemy subject, or enemy firm before vesting. Therefore, only when enemy property vests in the Custodian free from all encumbrances does it constitute a transfer of ownership from the owner to the Custodian. Under the Act, the Custodian temporarily holds or manages the property on behalf of the enemy, enemy subject, or enemy firm without transferring ownership to the Custodian or the Union of India. Consequently, there is no requirement to compensate the owners of such properties.
Keeping in view the recent judgment passed by the Apex court and the original intent of the EPA, the government, a custodian of the property should not be empowered to sell an enemy property. Even though legal heirs of these properties reside in non-enemy nations, ethical considerations suggest that they should be given the opportunity to reclaim this property. Selling their property without any consultation or punishment could lead to corruption and misuse of property where properties can be sold at an undervalued price. With the tag of being a custodian comes the matter of trust. Allowing the custodian to be the sole authority when making vital decisions regarding a property may breach this trust especially when the original owners or their heirs might still have a legitimate claim over the ownership of the property. Moreover, allowing a custodian to sell enemy property under the EPA could set the wrong precedent regarding the handling of other properties under the government.
Conclusion
The Enemy Property Act of 1968 and its subsequent amendments have played a crucial role in the management and disposition of properties left behind by those who migrated to Pakistan or China. Over time, the act has evolved, especially with the 2016 amendment. The act originally established that a custodian could not sell the property which has been reaffirmed recently by the Apex Court as well. The 2016 amendment should be analysed under a lens for legal inaccuracies because of its retrospective nature and muddy boundaries between whether or not a custodian can sell an enemy property. Moreover, before selling any enemy property further, the courts and the legislature should come up with strict regulations regarding this act which has matured over half a century.
Citations
[1] Sushant Singh, India’s Wars Since Independence: A Concise History, United Service Institution of India, https://usiofindia.org/publication-journal/indias-wars-since-independence-a-concise-history.html.
[2] The Enemy Property Act, No. 34 of 1968, India Code (1968).
[3] Union of India v. Raja Mohammad Amir Mohammad Khan, (2005) 8 SCC 696.
[4] Enemy Property (Amendment and Validation) Bill, 2016, Bill No. 17 of 2016 (India).
[5] Parliament Passes Enemy Property Bill, Mint (Mar. 14, 2017), https://www.livemint.com/Politics/gq9bpMg7oVOSNvgvevmnvJ/Parliament-passes-Enemy-Property-bill.html.
[6] Parliament Passes Enemy Property Bill, Hindustan Times (Mar. 15, 2017), https://www.hindustantimes.com/india-news/parliament-passes-enemy-property-bill/story-FXwZRJK4ltSQqz7aojmcZJ.html.
[7] Lucknow Nagar Nigam v. Kohli Brothers Colour Lab, (2024) SCC Online SC 1234
[8] SCC Online Blog, Custodian of Enemy Property in India Does Not Acquire Ownership of Property; Acts as a Trustee for Management and Administration: Supreme Court (Feb. 24, 2024), https://www.scconline.com/blog/post/2024/02/24/custodian-enemy-property-india-does-not-acquire-ownership-property-acts-as-a-trustee-management-administration-supreme-court/.
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