Last week Enemy Property (Amendment and Validation) Bill 2016 was passed by both Lok Sabha and Rajya Sabha. The amendment is retrospective in effect and bars any enemy or enemy firm from having any right of transfer of any property that is vested in the custodian. Civil courts are barred from adjudicating on matters pertaining to enemy properties with succession laws not applicable to these. This allows the government to monetize such assets whose estimated market value is over Rs. 1 Lakh Crore!
Decoding Enemy Property Act
Several thousands Indians migrated to China and Pakistan after 1962 India-China War and 1965 India-Pakistan war respectively. Subsequently in 1968 Enemy Property Act was passed to regulate properties of those Indians who had migrated from India to a enemy state such as Pakistan and China. This Act took away the legal rights of heirs of “enemy subjects” (people who left India) and vested the rights in ‘Custodian of Enemy Property for India’, an office instituted under the central government. Kindly note that definition of property in the act covers both immovable properties (real estate) and movable properties (FDs, Cash, Gold, Shares etc). Pakistan passed its own version of Enemy Property Act.
The 1968 Act defined an ‘enemy’ as a country (and its citizens) that committed external aggression against India (i.e., Pakistan and China). Hence, even those Indians who had migrated to Pakistan after partition but before the 1965 war and later became its citizen were covered under it which meant Pakistanis who had properties in India became “Enemy Properties” even though their legal heirs chose to stay in India and were Indian citizens.
Why Amendments were required
In 2005 Supreme Court of India passed its judgement in the case of Union of India vs. Raja Mohammad Amir Ahmad Khan, whose ancestors owned a large part of UP and Uttarakhand, in favour of the legal heirs of Raja Mohammad. Supreme Court observed that the vesting of rights of Enemy Properties with Custodian was temporary and not permanent & continuous. This verdict opened the floodgates for thousands of other pleas across India 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. Additionally, Pakistan had disposed off properties of all people who had migrated from Pakistan to India post partition. So there was some sort of political pressure to do the same with people who had migrated from India to Pakistan.
Subsequently in 2010 UPA 2 promulgated a retrospective ordinance that made the vesting rights of Custodian permanent and restrained courts from ordering the government to divest enemy properties from the Custodian. This ordinance rendered the 2005 judgement of Supreme Court null & void.
Union of India vs. Raja Mohammad Amir Ahmad Khan
Raja Mohammad Amir Ahmad Khan, also known as Raja of Mahmudabad, was a prominent politician and leader of the All India Muslim League, which wanted a separate country for Muslims. He inherited the huge estate of Mahmudabad spread over a large part of UP and Uttarakhand after the demise of his father.
Raja of Mahmudabad moved to Pakistan in 1957 leaving behind his wife, son & brother, and became a Pakistani citizen. However, he got disillusioned with Pakistan and moved to Iraq and then to London where he died in 1973. After the 1965 war and enactment of Enemy Property Act 1968 government of India declared the huge estate of Raja of Mahmudabad as “enemy property”. His son, who was always an Indian Citizen, fought the legal battle for almost 40 years. Finally he won when Supreme Court in its 2005 judgement ruled in favour of him and declared him the legal heir of the estate.
This judgement, as mentioned above, prompted several other people to file pleas across India to reclaim enemy properties, which forced the Indian government to bring in the amendment bill.
Highlights of Enemy Property (Amendment and Validation) Bill 2016
- The 1968 Act defined ‘enemy property’ as property that belonged to or was managed on behalf of an enemy. It allowed for the vesting of these properties with the Custodian. The Bill amended the Act to clarify that even in the following cases these properties will continue to vest with the Custodian: (i) the enemy’s death, (ii) if the legal heir is an Indian or citizen of a country that is not an enemy, (iii) enemy changes his nationality to that of another country.
- The amendment is retrospective in effect and bars any enemy or enemy firm from having any right of transfer of any property that is vested in the custodian.
- The law of succession or any custom or usage governing succession shall not apply in relation to enemy property.
- Civil courts are barred from adjudicating on matters pertaining to enemy properties with succession laws not applicable to these.
- Divestment and transfer of enemy property that had taken place before the promulgation of the 2010 Ordinance, which are not in compliance with the Ordinance, will be considered void.
- Custodian in consultation with the central government can dispose of any enemy property in accordance with provisions of the Act.
How Enemy Property Bill 2016 benefits Indian Government?
1) The Enemy Property (Amendment and Validation) Bill 2016 removes all the ongoing litigations related to Enemy Property from the courts, thus freeing up time and resources of the judiciary and the executive. Thus, it finally brings closure to thousands of bitterly fought legal cases between “enemy subjects” and Govt. of India.
2) As per the Parliament’s Select Committee report there are 9,280 immovable properties belonging to Pakistani nationals encompassing 11,882 acres. The total value of immovable properties that are vested with the custodian stood at Rs 1.04 lakh crore! Government can divest these properties and utilize the funds for infrastructure development and welfare measures.
Is the Bill unfair to Indian citizens?
Detractors of Enemy Property Act & the Amendment Bill believe that promulgation of such an act was / is like “vilifying son for sins of father”. People who migrated from India as well as their legal heirs who chose to stay back in India are referred to as “enemy subjects” under this amended Bill. People affected by this definition suffer from the trauma of being labelled as “Enemy”. Critics also believe that both 1968 Act and 2016 Bill are “anti-Muslim” as almost all “enemy subjects” who migrated to Pakistan were Muslims, except few hundreds who migrated from North-East to China after 1962 India-China war. Ultimately legal heirs of “Enemy subjects” have lost the ownership of properties in spite of choosing to stay back in India for no faults of their own.