The Indian Parliament passed a bill to amend a 49-year-old law to guard against claims of transfer or succession by heirs of property left behind by those who migrated to China and Pakistan. The Lok Sabha had passed the Enemy Property (Amendment and Validation) Bill 2006. This bill had been pending for a long time as five ordinances were promoted during this period. The Lok Sabha had passed the bill earlier, but Rajya Sabha added more amendments to the bill after having followed the recommendations of a select committee.
The Enemy Property (Amendment and Validation) Bill, 2016, basically amends the Enemy Property Act, 1968.
The Finance Minister and Leader of the House Arun Jaitley said the ordinance effecting the amendments to the Act would lapse on March 14, 2017. He also termed it as a security issue.
After the new Bill certain things would take place. Some of them are the law of succession would not apply to enemy property; the custodian shall preserve the property till it is disposed of in accordance with the Act, and there cannot be the transfer of any property vested in the custodian by or enemy subject or an enemy or enemy firm. The Bill also prohibits civil courts and other authorities from entertaining disputes related to such properties.
What is enemy property?
It is seen throughout the human history that when nations go to war, they often seize the properties of the citizens and corporations of the enemy country. During the First and the Second World wars both the United Kingdom and the United States seized properties of German corporations and citizens. Properties that are seized under such war circumstances are referred to as ‘enemy properties’ or ‘alien properties’. The concept behind the seizure of these properties is that an enemy country should not be allowed to take advantage of its assets in the other country during the war.
India seized properties in same circumstances. It seized the properties belonging to Pakistani and Chinese citizens when it was at war with these countries.
In India, the Enemy Property Act gave enemy citizens certain rights with respect to their properties vested in the Custodian. But there were abundant ambiguities in their rights and the powers of the Custodian to administer these properties. This resulted in many disputes being raised before the courts.
Some of these disputes are related to Indian citizens challenging whether they could inherit enemy properties belonging to their ancestors who were nationals of enemy countries.
In India, till date, there have been around 9,500 enemy properties which have been identified. Most of these properties belong to Pakistani citizens from the time of the wars and are valued at Rs 1,04,339 crore.
Pakistan also passed similar laws to take over properties and assets of Indian citizens and companies in Pakistan during the wars. Pakistan sold off these properties in 1971.
Examples of the Enemy Property
The debate around Enemy Property Bill had started last year when the Custodian of Enemy Property for India had announced Nawab’s property – enemy property. Hamidullah Khan was the last Nawab of Bhopal. He had two daughters – Abida Sultan and Sajida Sultan. Nawab Hamidullah Khan and Sajida Sultan had sold the property to many people because of which the ownership of Nawab’s property has been changed many times. Sajida Sultan, the grandmother of Saif Ali Khan, whose sister Abida Khan had gone to Pakistan in 1961. If the property belonging to the Nawab is termed enemy property by the court, then it will affect anyone who has ever bought a property from the Nawab and has has been living in it for decades. This includes commercial property, hotel, personal property, and even property owned by Municipal Corporation.
History of Legislation Regarding Enemy Property
After India- China War 1962, and India and Pakistan wars in 1965 and 1971, the Indian government took over properties of citizens of China and Pakistan in India under the Defense of India Acts. These Acts defined an ‘enemy’ as a country that committed an act of aggression against India, and its citizens. Then the properties of enemies in India were classified as enemy property. The properties included buildings, land, gold and jewelry, and shares held in companies of the citizens of enemy countries.
The Defense of India Acts were the set of temporary laws that stopped to operate after the wars ended. The Indian government enacted the Enemy Property Act in 1968 to administer the enemy property seized during the wars.
But there were many ambiguities about the rights on these properties. The Supreme Court tried to answer some of these questions in 2005.The court ruled that the Custodian of Enemy Property was administering the property as a trustee and the ownership of the property continued to be with the Enemy. Therefore, in the case of the death of the enemy, the enemy property should be inherited by their legal heirs.
The Indian government issued an Ordinance to expand the powers of the Custodian regarding enemy property in 2010. It sought to permanently vest the enemy property in the Custodian even in the case of a change in his nationality or the enemy’s death. But, the ordinance lapsed.
After it, five more ordinances were issued over the issue of enemy property. The issue of enemy property attracted legislative interest again in 2016. These Ordinances vested ownership rights over enemy property in the Custodian. This shift in the rights negated the Supreme Court’s decision of 2005 and made the central government the owner of the enemy property. While other ordinances lapsed, the last Ordinance, issued in December 2016, has been replaced the Enemy Property (Amendment and Validation) Bill, 2016.
There were debates in the parliament on this issue. The opposition parties alleged the government had pushed the Bill in violation of an “understanding” within the Business Advisory Committee (BAC), and the bill was passed when the House was near-empty.
The new bill nullifies legal sales undertaken by enemies of enemy properties since 1968. This means that a person who may have bought an enemy property in good faith when such sale and purchase was legal, now stands to lose the property.
The new bill prohibits Indian citizens who are legal heirs of enemies from inheriting enemy property and brings them within the definition of ‘enemy’.
It prohibits civil courts and other authorities from hearing certain disputes relating to the enemy property.
The judicial recourse on enemy property disputes will only be available before High Courts and the Supreme Court, limiting the options available to people whose property rights have been affected.
Till date, it has taken an SC judgment, six Ordinances and a law passed by Parliament to address the ownership issue of enemy properties. It is still to be seen whether this brings finality to the debate.