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The Enemy Property Act

The Enemy Property Act of 1968 was enacted in India following the 1965 war with Pakistan to regulate properties owned by individuals classified as "enemy aliens" or "enemy subjects." This legislation authorizes the government to assume custody and management of such properties, ensuring they are not used against national interests. It defines enemy property broadly, allows for the government's control over their management and disposal, and has been subject to amendments to address legal and administrative concerns over the years.

Definition
According to Section 2(b) of the Enemy Property Act, 1968: "enemy" or "enemy subject" or "enemy firm" means a person or country who or which was an enemy, [an enemy subject including his legal heir and successor whether or not a citizen of India or the citizen of a country which is not an enemy or the enemy, enemy subject or his legal heir and successor who has changed his nationality] or [an enemy firm, including its succeeding firm whether or not partners or members of such succeeding firm are citizen of India or the citizen of a country which is not an enemy or such firm which has changed its nationality], as the case may be, under the Defence of India Act, 1962 (51 of 1962), and the Defence of India Rules, 1962 [or the Defence of India Act, 1971 (42 of 1971) and the Defence of India Rules, 1971], but [does not include a citizen of India other than those citizens of India, being the legal heir and successor of the "enemy" or "enemy subject" or "enemy firm".]

According to Section 2(c) of the Defence of India Act, 1971: "enemy" means— (i) any person or country committing external aggression against India; (ii) any person belonging to a country committing such aggression; (iii) such other country as may be declared by the Central Government to be assisting the country committing such aggression; (iv) any person belonging to such other country.

According to Section 2(c) of the Enemy Property Act, 1968: "enemy property" means any property for the time being belonging to or held or managed on behalf of an enemy, an enemy subject or an enemy firm.

Amendments:
The act was amended in 2017 with amendment made in the following sections:

Section 2(b):
  • The term "enemy subject" now includes: "enemy subject including his legal heir and successor whether or not a citizen of India, or the citizen of a country which is not an enemy, or the enemy, enemy subject or his legal heir and successor who has changed his nationality."
  • The term "enemy firm" now includes: "enemy firm, including its succeeding firm whether or not partners or members of such succeeding firm are citizens of India or the citizen of a country which is not an enemy, or such firm which has changed its nationality."
  • The phrase "does not include a citizen of India" now specifies: "does not include a citizen of India other than those citizens of India, being the legal heir and successor..."


Explanations Added:
  • Explanation 1: Excludes citizens of India who are legal heirs and successors of an enemy, enemy subject, or enemy firm that has ceased to be an enemy due to death, extinction, winding up of business, or change of nationality, provided the heir and successor is a citizen of India or a country not considered an enemy.
  • Explanation 2: Clarifies that the Act does not affect any rights conferred upon legal heirs and successors under any other law, provided these rights are not inconsistent with the provisions of this Act.
Section 2(c):
  • The proviso now includes: "or dies in any territory outside India."
  • Explanations Added:
    • Explanation 1: Clarifies that "enemy property" remains enemy property despite the enemy, enemy subject, or enemy firm ceasing to be an enemy due to death, extinction, winding up of business, or change of nationality.
    • Explanation 2: Defines "enemy property" to include all rights, titles, interests, and any benefits arising from such property.
Section 5A:
  • Issue of Certificate by Custodian: The Custodian may declare enemy property as vested in them under this Act, issuing a certificate that serves as evidence of the facts stated therein.
Section 5B:
  • Law of Succession Not Applicable: No law relating to succession, custom, or usage governing succession of property applies to enemy property under this Act. No person, including legal heirs and successors, shall have any right to such property.
Section 6:
  • No enemy, enemy subject, or enemy firm shall have the right to transfer any property vested in the Custodian, and any such transfer is void.
  • If any property vested in the Custodian had been transferred before the commencement of the Enemy Property (Amendment and Validation) Act, 2017, and such transfer was declared void by the Central Government, the property shall continue to vest in the Custodian despite any court, tribunal, or authority ruling otherwise.
Section 8(1):
  • The Custodian may take necessary or expedient measures to preserve the property until disposed of according to this Act.
Section 8 Sub-section (2):
  • (ia): The Custodian can fix and collect rent, lease rent, license fee, or usage charges for enemy property.
  • (iva): The Custodian can secure vacant possession of enemy property by evicting unauthorized occupants or trespassers and removing unauthorized constructions.


  • Section 8A: Disposal of Enemy Property by Custodian
    • The Custodian can dispose of enemy properties vested in them before the commencement of this Amendment Act, with the Central Government's approval.
    • Disposal includes sale or other means, with proceeds deposited into the Consolidated Fund of India.
    • The Custodian must report disposal details to the Central Government.
    • The Central Government can direct disposal by another authority if needed and can issue binding directions and guidelines.
  • Section 10A: Issuance of Sale Certificate
    • The Custodian can issue a certificate of sale for enemy immovable property, which will serve as conclusive proof of ownership for registration purposes, even without original title deeds.
  • Section 11: Enhanced Powers of the Custodian
    • The Custodian, Deputy Custodian, or Assistant Custodian will have powers similar to those of a civil court for document discovery, enforcing attendance, compelling production of records, and issuing commissions.
  • Section 17: Increased Administrative Fee
    • The fee for managing enemy property is increased from 2% to 5%.
  • Section 18: Representation and Transfer of Property
    • The Central Government can transfer property back to the original owner if it is determined not to be enemy property, based on a representation made within 30 days.
  • Section 18A: Retention of Income
    • Income from enemy property will not be returned, even if the property is transferred to another person.
  • Section 18B: Exclusion of Civil Court Jurisdiction
    • Civil courts or other authorities cannot entertain suits or proceedings regarding enemy properties or actions taken by the Central Government or Custodian.
  • Section 18C: Appeal to High Court
    • Aggrieved persons can appeal to the High Court within 60 days regarding orders under section 18.
  • Section 20: Increased Penalties
    • The penalty for violating the Act increases from 500 rupees to 10,000 rupees.
  • Section 22: Inclusion of Succession Laws
    • Succession laws or customs will not apply to enemy property.
  • Section 22A: Validation and Retrospective Effect
    • The Act's provisions, as amended, are deemed effective from the original commencement date, invalidating contrary orders and retaining enemy property with the Custodian.
  • Amendments to the Public Premises (Eviction of Unauthorised Occupants) Act, 1971:
    • Enemy properties are included as public premises.
    • Custodians appointed under the Enemy Property Act are deemed Estate Officers for these properties.
Case Laws
In the case of Union of India vs. Raja Mohammad Amir Mohammad Khan, (2005) 8 SCC 696, the Supreme Court of India ruled that the property vested with the custodian as enemy property after the death of Amir Khan should be transferred to his son, Raja Mohammad Khan, as he was a citizen of India and had not moved to Pakistan before independence, thereby not considered an enemy and eligible to hold the property.

The High Court of Calcutta in Sudhendu Nath Banerjee and others vs. Bhupati Charan Chakraborty and others, 1976 Calcutta 267, held that under Sections 6, 8, and 18 of the Act, the enemy, due to the vesting of his property in the Custodian, is not divested of all his rights, title, and interest in the property. The vesting in the Custodian is limited to possession, management, and control over the property temporarily.

In Mumtaz Begum vs. Union of India and Others, AIR 1991 Calcutta 241, the High Court reiterated its earlier view. The High Court ruled that the enemy property vested in the Custodian does not permanently transfer the title to the Custodian. The appellant was entitled to reclaim the property as it no longer belonged to an enemy subject.

In the case of Lucknow Nagar Nigam & Others V. Kohli Brothers Colour Lab. Pvt. Ltd. & Others 2024 INSC 135, the Supreme Court held that the vesting of the enemy property in the Custodian is only as a temporary measure and he acts as a trustee of the said properties. Union of India cannot assume ownership of the enemy properties once the said property is vested in the Custodian. This is because, there is no transfer of ownership from the owner of the enemy property to the Custodian and consequently, there is no ownership rights transferred to the Union of India. Therefore, the enemy properties which vest in the Custodian are not Union properties.


Award Winning Article Is Written By: Ms.Aisha Gadkari
Certificate Of Excellence - Legal Service India
Authentication No: SP461977786354-9-0924

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