THE ENEMY PROPERTY ACT-1968

Saturday Brain Storming Thought (239) 07/09/2024

THE ENEMY PROPERTY ACT-1968

The Enemy Property Act, 1968, is an Act of the Parliament of India, which enables and regulates the appropriation of property in India owned by Pakistani Nationals

The Act was passed following the Indo-Pakustani war of 1965

Ownership is passed to the Custodian of Enemy property for India, a government department

There are also movable properties categorized as enemy properties

Application of Enemy Property Act

It extends to the whole of India

It applies also to all citizens of India outside India and to branches and agencies outside India of companies or bodies corporate registered or incorporated in India

Commencement of Enemy Property Act

It shall be deemed to have come into force on 10/07/1968

Owner of Enemy Property

The CEPI is the owner of assets that are declared as enemy Property

CEPI

The Custodian of Enemy Property for India

Enemy Property

It is defined as property owned by individuals who are previously residents of India but later because citizens of Pakistan or China

Key Points about Enemy Property in India

1) The government designated some properties as enemy property during the 1962, 1965 & 1971 conflicts

2) The Custodian of Enemy Property for India is a government department that oversees enemy property

3) The government disposes of enemy property through E-auctions, which provides opportunities for potential buyers and current occupants

4) The 2017 amendment to the Enemy Property Act expanded the definition of enemy subjects and clarified the indefinite status of enemy property

Enemy

In India, the term enemy is defined as a country or its citizens that has committed aggression against India

Section 12 in the Enemy Property Act

Protection for complying with orders of Custodian

Where any order with respect to any money or property is addressed to any person by the Custodian and accompanied by a certificate of Custodian that the money or property vested in him under this act, the certificate shall be evidence of the facts stated therein and if that person complies with the orders of the Custodian, he shall not be liable to any suit or other legal proceeding by reason only of such compliance

Section 18 of the Enemy Property Act

Transfer of property vested as enemy property in certain cases

The Central Government may, on receipt of a representation from a person, aggrieved by an order vesting a property as enemy property in the Custodian within a period of thirty days from the date of receipt of such order or from the date of its publication in the Official Gazette, whichever is earlier after giving a reasonable opportunity of being heard, if it is of the opinion that any enemy property vested in the Custodian under this act and remaining with him was not an enemy property, it may be general or special order, direct the Custodian that such property vested as enemy property in the Custodian may be transferred to the person ftom whom such property was acquired and vested in the Custodian

Section 8 of the Enemy Property Act

Powers to Custodian in respect of enemy property vested in him

1) Carry on the business of the enemy

2) Fix and collect rent, lease rent, licence fee or usage charges, as the case may be, in respect of enemy property

3) Take action for recovering any money due to the enemy

4) Make any contract and execute any document in the name and on behalf of enemy

5) Institute, defend or continue any suit or other legal proceeding, refer any dispute to arbitration and compromise any debts, claims and liabilities

6) Secure vacant possession of the enemy property by evicting, the unauthorised or illegal occupant or trespasser and and remove unauthorised or illegal constructions if any

7) Raise on the security of the property such loans as may be necessary

8) Incur out of the property any expenditure

9) Transfer by way of sale, mortgage or lease or otherwise dispose of any of the properties

10) Invest any money held by him on behalf of enemies for the purchase of treasury bills or such other Government securities as may be approved by the Central Government for the purpose

11) Make payments to the enemy and his dependents

12) Make payments on behalf of the enemy to persons other than those who are enemies, of dues outstanding on the 25/10/1962 or on the 03/12/1971

13) Make such other payments out of the funds of the enemy as may be directed by the Central Government

The Enemy Property (Amendment and Validation) Bill, 2016

1) The Bill amends the Enemy Property Act, 1968, to vest all rights, titles and interests over enemy property in the Custodian

2) The Bill declares transfer of enemy property by the enemy, conducted under the Act, to be void

3) This applies retrospectively to transfers that have occurred before or after 1968

4) The Bill prohibits civil courts and other authorities from entertaining disputes related to enemy property

Key Issues and Analysis

1) The Act allows transfer of enemy property from the enemy to other person

2) The Bill declares all such transfers are void

3) This may be arbitrary and in violation of Article 14 of Constitution

4) The Bill prohibits civil courts from entertaining any disputes with regard to enemy property

5) It does not provide any alternative judicial remedy (eg tribunals)

6) It limits judicial recourse or access to courts available to aggrieved persons

Sections of The Enemy Property Act 1968

1) Short title, extent, application and commencement

2) Definitions

3) Appointment of Custodian of Enemy Property for India and Deputy Custodian etc

4) Appointment of inspectors of enemy property

5) Property vested in the Custodian of Enemy Property for India under the Defence of India Rules 1962, and the Defence of India Rules 1971 to continue to vest in Custodian

6) Prohibition to transfer any property vested in Custodian by an enemy, enemy subject or enemy firm

7) Payment to Custodian of money otherwise payable to an enemy, enemy subject or enemy firm

8) Power of Custodian in respect of enemy property vested in him

9) Exemption from attachment etc

10) Transfer of securities belonging to an Enemy

11) Power of Custodian to summon persons and call for documents

12) Protection for complying with orders of Custodian

13) Validity of action taken in pursuance of orders of Custodian

14) Proceedings against companies whose assets vest in Custodian

15) Returns as to enemy property

16) Registers of returns

17) Levy of feees

18) Transfer of property vested as enemy property in certain cases

19) Protection of action taken under the Act

20) Penalty

21) Offences by companies

22) Effect of laws inconsistent with the Act

23) Power to make rules

24) Certain orders made under the Defence of India Rules 1962 & 1971 to continue in force

25) Repeal and saving

Key Provisions of The Enemy Property Act

1) Definition of Enemy Property

2) Role of the Custodian

3) Restrictions on Transfer and Sale

4) Rights of Legal Heirs

Positive impact of The Enemy Property Act

The government’s ability to lease or sell these properties has added valuable real estate to the market, potentially driving development and growth in certain cases

Negative impact of The Enemy Property Act

In areas where large tracks of land or significant properties are held by the Custodian, it has led to stagnation

Since these properties are often not developed or maintained, tgey can bring down the value of the surrounding properties

Can legal heirs reclaim enemy properties

While legal heirs can stake a claim, the final decision rests with the government

The 2017 amendment further strengthened the government’s hold over enemy properties, making it challenging for legal heirs to reclaim them