All About The Enemy Property Act

Index

1. Introduction 
2. History And Origin 
3. What Is Enemy Property Act, 1968
4. Features Of The Enemy Property Act, 1968
5. Drawbacks In Enemy Property Act, 1968
6. Enemy Property (Amendment) Act,  2016
7. Advantages Of Enemy Property Act, 2016
8. Muhammad Ali Jinnah And The Controversy Over His Properties
9. Conclusion 

Introduction 

The Enemy Property Act is a law connected to India’s history during conflicts. It deals with properties left behind by people who moved to enemy countries. The government can take control of these properties in India to prevent any threat to national security. The goal is to manage these properties in the country’s best interest. This article explains more about the act and the amendments that have been made as a result of certain complexities. 

History And Origin 

Following the Indo-Pak wars of 1965 and 1971, a significant migration occurred from India to Pakistan. In response, the Indian government, using powers granted by the Defence of India Rules under the Defence of India Act, took control of properties and companies owned by individuals who became Pakistani nationals. These properties were categorised as ‘enemy properties’ under the Enemy Property Act of 1968. The Act mandated that these properties, now under the Custodian of Enemy Property for India, remain under custodial control. These enemy properties were scattered across various states of India and included both immovable and movable assets. The Custodian’s office is situated in Mumbai with a branch office in Calcutta, overseeing the management and administration of these enemy properties nationwide.

In 2010, an Ordinance was issued by the then Government to amend the Enemy Property Act of 1968, ensuring that enemy properties remained vested with the Custodian. However, this Ordinance lapsed in September 2010. Subsequently, a bill proposing similar amendments, along with additional modifications, was introduced in the Lok Sabha in November 2010 but was not passed during that term and subsequently lapsed. The current government, following the footsteps of the previous UPA government, expressed its intent to amend the Enemy Property Act. 

What Is Enemy Property Act, 1968

The Enemy Property Act, 1968, is a significant legislation enacted by the Indian Parliament to regulate and manage properties in India that were abandoned by individuals who acquired citizenship in Pakistan and China. It authorises the seizure and regulation of properties owned by Pakistani and Chinese nationals in India, designating them as “enemy properties.” The Act empowers the Custodian of Enemy Property for India, a government department, to take control of these assets on behalf of the Central government. 

Features Of The Enemy Property Act, 1968

1. The Custodian, appointed by the Central Government, is tasked with managing enemy properties. Their duties involve overseeing the property’s maintenance, collecting any income it generates, and handling any debts or obligations linked to it. Essentially, the Custodian protects these properties from misuse or neglect.
2. Restrictions on Transfer and Sale: The act imposes strict limitations on the transfer and sale of enemy properties. Any attempt to sell, transfer, or mortgage an enemy property requires prior approval from the Custodian. This rule is in place to prevent illegal transactions and maintain government control over these properties.
3. Rights of Legal Heirs: The act also outlines the rights of legal heirs regarding enemy properties. Although these properties are categorised as “enemy properties,” the rights of legal heirs, particularly those residing in India, are safeguarded. However, it’s important to understand that while legal heirs can make claims, the ultimate decision regarding these properties lies with the government, considering the broader national interest.

Drawbacks In Enemy Property act, 1968

Section 18 of the Act discusses the process of ‘divesting’ enemy properties vested in the Custodian. According to this section, the Custodian can only divest enemy properties in his custody if directed by the Central Government through a general or special order. The property can then be transferred to the original owner or another person specified by the government’s directions. Once such a transfer occurs, the property no longer remains vested with the Custodian.

Section 10 of the Act provides insights into dealing with securities issued by companies classified as enemy properties. According to Section 10(1), if a company issues securities and is categorised as an enemy property, the Custodian has the authority to sell these securities. The company can buy back these securities with the consent of the Custodian and has the discretion to re-issue them as well.

This provision gives the Custodian a lot of power because the company can only buy back its securities with the Custodian’s permission. There’s no mention of the Custodian needing approval from or even informing the Central Government before granting this permission.

Enemy Property (Amendment) Act, 2016

The Enemy Property Act, 2016, is an amendment to the original Enemy Property Act of 1968. The 2016 bill aimed to further amend the Enemy Property Act, 1968, and the Public Premises (Eviction of Unauthorised Occupants) Act, 1971.

The Enemy Property Act, 2016, aimed to strengthen the government’s control over enemy properties and prevent unauthorised transactions. It aimed to ensure that all enemy properties were under the direct control of the Custodian of Enemy Property for India, thereby preventing any unauthorised sales or transactions. 

The Enemy Property Act, 2016, is significant because it reinforces the government’s authority over enemy properties and ensures that these properties are not used for personal gain or to circumvent the law. It also clarifies the legal position regarding the ownership and transfer of enemy properties, providing a clear framework for the management of these assets.

Changes in the act include :

1. The guardian of enemy property has been considered the owner since 1968.
2. Indian citizens are now barred from inheriting enemy property.
3. Sales of enemy property made thus far are deemed illegal.
4. Civil courts generally lack jurisdiction over enemy property cases.
5. Enemy property cases are exclusively heard in High Courts and the Supreme Court.
6. The sale of enemy property requires supervision from the Ministry of Home Affairs or the Custodian of Enemy Property of India (CEPI).
7. Transfer of enemy property to third parties is prohibited, even for properties transferred before 1968.
8. Sale proceeds from enemy property are deposited as disinvestment proceeds in a government account managed by the Finance Ministry.

Advantages Of Enemy Property Act, 2016

The revisions in the Enemy Property Act, 1968 are expected to yield approximately Rs 3000 crore for the Government of India from long-idle properties. These funds can be allocated towards enhancing the country’s infrastructure and supporting social welfare initiatives. Additionally, these changes serve as a symbolic message to entities engaged in anti-India activities, reinforcing that their efforts against the nation will not go unnoticed.

The 2017 amendments to the Enemy Property Act significantly affected property owners. Many properties previously in legal disputes or returned to rightful heirs were again placed under the Custodian’s control.

Muhammad Ali Jinnah And The Controversy Over His Properties

Muhammad Ali Jinnah, the founder and first Governor-General of Pakistan, was a prominent figure whose life and legacy have been the subject of extensive scrutiny and debate. One aspect of Jinnah’s life that has garnered significant attention is the issue surrounding his properties and the ongoing disputes over their ownership and control. He was known to command high fees for his legal services, earning around Rs. 1,500 per case. This financial independence allowed Jinnah to express his thoughts and ideas freely, contributing to his pivotal role in the establishment of Pakistan.

Jinnah owned several properties during his lifetime, including a bungalow facing the sea in the upscale Malabar Hill area of South Mumbai, known as Jinnah House. This property has been a source of contention between India and Pakistan for many years, with the Indian government currently maintaining control over the property and restricting public access to it

Another property associated with Jinnah is the Jinnah House in Delhi, which he occupied from 1938 to 1947. This property, originally constructed by Rai Bahadur Sardar Baisakha Singh in 1929, was later sold by Jinnah to his close associate and industrialist Ramkrishna Dalmia. The property is now owned by the Government of the Netherlands and serves as the Dutch Embassy.

Jinnah’s properties were not limited to his personal residences. He had also dedicated several of his properties to educational institutions, such as Aligarh Muslim University, Sindh Madressatul Islam University in Karachi, and Islamia College Peshawar. This demonstrates Jinnah’s commitment to promoting education and supporting the Muslim community.

Muhammad Ali Jinnah’s issue regarding the Enemy Property Act has been a subject of ongoing debate and controversy. Recent clarifications by the Indian government have stated that Jinnah House in Mumbai, the erstwhile home of the founder of Pakistan, is not considered an enemy property under the Enemy Property Act of 1968. The Ministry of Home Affairs affirmed that Jinnah House falls under the category of ‘evacuee property’ as per the Administration of Evacuee Property Act, 1950. This clarification has brought clarity to the status of Jinnah House, emphasising that it is a property of the Government of India and not subject to the provisions of the Enemy Property Act.

Conclusion 

In conclusion the Ordinance aims to limit the Custodian’s arbitrary powers and ensure Central Government intervention when necessary. This move restrains the Custodian’s discretionary authority granted by the Act, which is viewed positively as a step to curb excessive powers.