What is enemy property?

Why in News? 

Recently, the issue of “enemy property” has gained attention due to the inheritance of assets worth 15,000 crores by the family of Nawab of Bhopal. This has sparked legal debates. Ownership rights are being questioned.

Introduction: Legal Context of Enemy Property

The concept of enemy property in India emerged after the partition of the country in 1947 and subsequent wars with neighboring nations, particularly China and Pakistan. After events like the 1962 Sino-Indian war, the 1965 India-Pakistan war, and the 1971 India-Pakistan war, some citizens of India migrated to these countries, adopted their citizenship, and left behind their properties in India. These properties were classified as “Enemy Property” and became subject to special legal regulations.

• The properties are called enemy properties because their owners were considered to have aligned themselves with an enemy state. The laws surrounding these properties are meant to prevent them from being used for hostile purposes or being transferred to unauthorized individuals.
• The Enemy Property Act, 1968: This act was formulated to control and manage properties left behind by those who moved to enemy countries, such as Pakistan and China.
• The Defence of India Act, 1962: Under this act, the Indian government had the power to confiscate properties of citizens who chose to migrate to hostile nations, especially in the aftermath of conflicts like the 1965 India-Pakistan war and the 1971 India-Pakistan war. 
• Tashkent Agreement (1966): Following the India-Pakistan war of 1965, a significant clause was added to the Tashkent Agreement, signed on 10th January 1966, that included discussions about properties taken over during the war and their possible return. However, Pakistan had already dealt with and liquidated such assets within its borders by 1971.
• Pakistani Properties: As of the latest data, there are 9,280 enemy properties associated with Pakistani citizens, spread across 20 states and Union Territories of India.
• Chinese Properties: Additionally, 9,406 enemy properties are linked to Chinese nationals, located in 6 states and Union Territories across the country.

History and Origin of Enemy Property in India 

The concept of enemy property in India is deeply rooted in the historical context of war and national security. It originated in the aftermath of significant conflicts, particularly with China in 1962 and Pakistan in 1965 and 1971.

• 1962 Sino-Indian War: Seizing Property for Security: The roots of enemy property in India can be traced back to the 1962 Sino-Indian War. After the conflict with China, properties owned by Chinese nationals living in India were considered a potential threat to national security. The government enacted laws to seize such properties under the Defence of India Act, 1962.
• 1965 and 1971 Wars: Expansion of Enemy Property Laws: During the 1965 India-Pakistan War and the 1971 India-Pakistan War, the Indian government extended these laws to include properties of Pakistani nationals. Those who migrated to Pakistan or China, leaving assets behind, had their properties confiscated and categorized as enemy property.
• The Enemy Property Act of 1968: Legal Framework
  • In 1968, the Enemy Property Act was introduced to formalize the process of managing these seized assets. 
  • Custodian: The Custodian of Enemy Property for India (CEPI) is responsible for managing enemy properties. This includes a Deputy Custodian and Assistant Custodians appointed by the government.
  • Prescribed by Rules: The Act defines “prescribed” as something outlined by the rules made under the Act for proper enforcement.
• 2017 Amendment: Strengthening the Custody: The 2017 Amendment to the law reinforced the custody of enemy properties to prevent their transfer or inheritance and allowing the government to dispose of them under specific conditions.

The Enemy Property (Amendment) Act, 2017

In 2017, the Enemy Property (Amendment) Act brought significant changes to the existing Enemy Property Act of 1968. This was a step towards strengthening the government’s control over properties left behind by individuals who migrated to enemy countries, particularly Pakistan and China, after wars with India. 

• Changes to Definitions
  • The amendment broadened the definition of “enemy subject” and “enemy firm”, incorporating the legal heirs and successors of such individuals or entities. Whether the heirs were citizens of India or any non-enemy country, they could no longer claim ownership over enemy properties left behind by their ancestors.
  • The phrase “enemy firm” now includes not only the original enemy firm but also any succeeding firm, irrespective of the nationality of its members or partners.
• Impact on Heirs and Successors
  • Legal heirs of individuals who had left for enemy countries could no longer claim the properties. 
  • The act clarified that properties of enemy subjects and enemy firms remain under government control, even if the original enemy’s status changes.
  • The amendment also ensured that the properties remained with the Custodian of Enemy Property, even if the legal successor was an Indian citizen or a citizen of a non-enemy country.
• Government Control and Custodianship
  • According to the amendment, the Custodian of Enemy Property was empowered to oversee the assets of enemy subjects and enemy firms. 
  • The custodian could now issue certificates confirming that a property remained enemy property, even if the original owner’s status changed due to reasons like death or business closure.
  • The government retained the authority to manage these properties and prevent their sale, transfer, or inheritance by any unauthorized individual.
• Exemptions for Indian Citizens: The amended law also introduced clarity regarding Indian citizens. It made it explicit that Indian citizens who are legal heirs of enemy subjects or firms cannot claim enemy properties, irrespective of their national status or the status change of the original enemy.

Need for Amendments to Enemy Property Act

• Legal Claim by Successors: The amendments were introduced to stop any legal heirs of individuals who fled India during and after the wars from claiming ownership of enemy properties. This was to ensure that such properties remained under the control of the government.
• Court Rulings Challenging Custodian’s Powers: Various court decisions were hindering the Custodian of Enemy Property’s ability to manage and maintain these properties as intended under the 1968 Enemy Property Act. A significant case involved the property of the King of Mahmoodabad, who left for London after Partition, leaving behind properties in Hazratganj, Sitapur, and Nainital. The government declared their property enemy property But, the Supreme Court has currently put a hold on the sale of these properties.
• Impact on Government Control: The conflicting judicial decisions made it difficult for the government and the Custodian to maintain control over enemy properties. This further necessitated amendments to clarify the law and secure the management of these properties.

Responsibilities of the Enemy Property Authority

The Enemy Property Authority in India is tasked with managing properties left behind by individuals who migrated to enemy countries. The central government appoints the Custodian of Enemy Property for India (CEPI), who is responsible for overseeing these properties.

• As per Section 2(a) of the Enemy Property Act, the term “Custodian” refers to the person designated to manage these properties. 
• The Custodian has the authority to oversee all matters related to enemy properties, including the appointment of a Deputy Custodian and Assistant Custodians.
• Under Section 11 of the Act, the Custodian acts as a civil court in the context of legal disputes regarding enemy properties, in accordance with the Civil Procedure Code of 1908. This allows the Custodian to resolve disputes that may arise in relation to these properties.
• The Enemy Property Act, 1968, which was amended in 2017, recognized the Custodian’s office as a statutory authority and made it an office under the Ministry of Home Affairs. 
• This recognition has provided the Custodian with additional powers to effectively manage enemy properties, ensuring that they remain under the control of the government and cannot be transferred or inherited by unauthorized individuals.
• In cases where individuals are dissatisfied with any orders passed by the Custodian, Section 18(c) of the Act allows them to file an appeal with the High Court. The appeal must be filed within 60 days from the date of receipt of the order. The High Court has the discretion to extend this period for a further 60 days if valid reasons are provided by the appellant.

Other Property Laws in India

• Transfer of Property Act, 1882: This central legislation governs the transfer of property in India, detailing various aspects like ownership, mortgages, loans, exchanges, gifts, and leases. It lays down the legal framework for property transactions.
• Real Estate (Regulation and Development) Act, 2016 (RERA): RERA aims to bring transparency and accountability to the real estate sector. It mandates the registration of real estate projects, enforces compliance with project timelines and specifications, and establishes grievance redressal mechanisms for buyers.
• Indian Succession Act, 1925: This act outlines the rules for inheritance and testamentary succession, providing a legal structure for the distribution of property after an individual’s death. It helps in the administration of estates and inheritance rights.
• Rent Control Act: This law governs the relationship between landlords and tenants, ensuring fair rent practices, protection against eviction, and securing tenants’ rights while balancing the interests of property owners.
• Indian Stamp Act, 1899: This act regulates stamp duty payments and the registration of documents associated with property transactions. It ensures that legal documents related to property transfer are properly authenticated and taxed.

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