In this blogpost, Sudhi Ranjan Bagri, Student, National Law Institute University, Bhopal, analyses the Enemy Property Ordinance, 2016.
The Foundation of the Act
After the Indo-Pak war of 1965 and 1971, there was migration of people from India to Pakistan on a large scale. The Government of India took control of the properties and companies run by persons who took the nationality of Pakistan, by exercising their powers given under the Defence of India Rules framed under the Defence of India Act. These properties, as per the Act, are termed as ‘enemy properties’[1]. Further such properties were vested by the Central Government with the Custodian of Enemy Property for India.[2]
The Enemy Property Act (hereinafter referred to as the Act) was enacted in the year 1968, by the Government of India, which provided that the enemy property which was vesting with the custodian would continue to do so[3]. The enemy property spread across many states of India, and so did the authority of custodian over those properties. Such enemy properties comprised of immovable as well as moveable properties. The Office of the Custodian of Enemy Property is located at Mumbai with a Branch office at Calcutta[4].
To ensure the continuous vesting of the enemy properties with the Custodian, an Ordinance was propagated in the year 2010, by the then Government, to make appropriate amendments to the Enemy Property Act, 1968. After the Ordinance lapsed on September 2010, a bill seeking the concerned amendments with some more modifications was presented in the Lok Sabha on 15th November 2010. However, the bill could not be passed during the 15th term of the Lok Sabha, and it lapsed.[5]
The present government, following the path of the previous UPA government, has been eager to amend the Enemy Property Act.[6] Finally on January 07, 2016, the Enemy Property (Amendment and Validation) Ordinance, 2016 was promulgated by the President of India to make necessary amendments to the Enemy Property Act, 1968.[7]
Amendment
Following are some of the amendments which have been brought up by the Ordinance of 2016.
- once an enemy property is vested in the custodian, it shall continue to be vested in him as enemy property irrespective of whether the enemy, enemy subject or enemy firm has ceased to be an enemy due to reasons such as death etc;
- the law of succession does not apply to enemy property;
- any property vested in the custodian cannot be transferred by an enemy or enemy subject or enemy firm;
- the custodian shall preserve the enemy property till it is disposed of in accordance with the provisions of the Act.
These amendments were done with intent to cover all the loopholes which were present in the 1968 Act. Section 18 of the Act talked about ‘divesting of enemy property which was vested in the Custodian’. It mentions that the Custodian can divest the enemy property, which has been vested in him and is still in his custody, only if the Central Government directs to do so either by general or special order passed in that regard. The property can be transferred to the owner of the property or any other person as specified by the directions of the Central Government, and upon such transfer such property shall cease to vest in the Custodian.[8]
Further, Section 10 of the Act also needs to be looked upon to understand the situation more clearly. As per Section 10(1) of the Act, where a company has issued any security, and such a company is an enemy property, the Custodian may proceed to sell those securities, and such securities may be purchased by such company itself after receiving the consent of the custodian in this behalf. Further, it states that such company can re-issue its securities on its discretion.
On a careful reading and interpretation of the provision, it can be observed that this provision provides a great amount of discretion to the custodian, as the company can purchase back its securities only after the prior permission of the custodian. And it has nowhere been mentioned that the custodian before granting such permission needs to take the prior approval of the Central Government or even needs to imitate the same to the Central Government.
So, the amendment seeks to remove such scopes wherein the enemy property can be transferred to such enemy or any person on behalf of such enemy person. Further, the amendment also states that such property would not be subject to the law of succession. It clarifies that no person can thus claim the property on the ground that the property being his ancestral property belongs to him, on the death of the real owner. The amendment also mentions that the property would not cease to be enemy property merely on the death of the enemy.
Conclusion
So from my viewpoint, this Ordinance has been promulgated with a view to curb the arbitrary powers of the custodian and for the intervention of Central Government as and when required. The Act initially gave discretionary powers to the Custodian, but the applicability of the Ordinance would limit the exercise of the powers. Hence, it is seen as a positive move of the Government to restrict the powers of the Custodian.
[1] Section 2(c) of the Act.
[2] Defence of India Rules, 1962.
[3] Section 5
[4] http://commerce.nic.in/epactdet.htm
[5] See http://pib.nic.in/newsite/PrintRelease.aspx?relid=134302
[6] See http://www.ptinews.com/news/6949004_Prez-signs-ordinance-to-amend-Enemy-Property-Act.html
[7] Ibid
[8] Section 18 of the Act
