Skip to main content

Windfall for Govt with Enemy Property Bill

Amendment empowers the Custodian of Enemy Property to sell such assets which wasn't permitted under the old Enemy Property Act, 1968
The passing of the Enemy Property (Amendment and Validation) Bill 2016 by both houses of parliament paves the way for the government to monetise assets worth more than `1lakh crore, which will come as a nice cushion at a time when the government is looking at ways to control the fiscal deficit.
The amendment now empowers the Custodian of Enemy Property (CEP) to sell such assets, which wasn't permitted under the old Enemy Property Act, 1968. The official, appointed under the 1968 Act, was entrusted with the custody, management and administration of assets deemed enemy property after the India-China war of 1962 and the wars with Pakistan in 1965 and 1971. The authority, under the home ministry, can now sell these properties.

Data provided in the report of the parliament select committee on the bill released in May last year reveals that there are 9,280 immovable properties belonging to Pakistani nationals encompassing 11,882 acres. The total value of immovable properties that are vested with the custodian stood at Rs.1.04 lakh crore. Movable vested properties consist of shares in 266 listed companies valued at Rs.2,610 crore; shares in 318 unlisted companies valued at Rs.24 crore; gold and jewellery worth `0.4 crore; bank balances of Rs.177 crore; investment in government securities of Rs.150 crore and investment in fixed deposits of Rs.160 crore.

Besides this, there are 149 immovable enemy properties of Chinese nationals with the custodian in West Bengal, Assam, Meghalaya, Tamil Nadu, Madhya Pradesh, Rajasthan, Karnataka and Delhi.

An ET Intelligence Group investigation in 2008 had revealed that the shares vested with the custodian were in listed entities such as Wipro, Cipla ACC, Tata and DCM group companies, Bombay Burmah Trading Co., Ballarpur Industries, DLF, Hindustan Unilever, ITC, Bajaj Electricals, India Cement and Aditya Birla Nuvo.

“The custodian has the power to dispose or sell enemy property as well as to evict illegal occupants,“ said Bhupendra Yadav, member of parliament and chairman of the select committee on the amendment bill. This would also entail suitable amendments to the Public Premises (Eviction of Unauthorised Occupants) Act, 1971.

The amendment is retrospective in effect and bars any enemy or enemy firm from having any right of transfer of any property that is vested in the custodian. Civil courts are barred from adjudicating on matters pertaining to enemy properties with succession laws not applicable to these. The select committee report elaborates on the rationale of the amendment.

In the initial stages of the functio ning of the custodian, courts upheld automatic vesting of enemy properties in the custodian and restrained themselves from interfering in the orders passed by the custodian. Later, however, there have been judgments by various courts--the union of India vs. Raja Mohammad Amir Mohammad Khan being the landmark one--that adversely affected the powers of the custodian as provided under the old Act.

Besides, according to the mini stry of external affairs, the Pakistan government has disposed of all enemy properties in that country.

“Earlier, it used to be possible under Section 18 of the old Act that the property under the custodian could be divested and returned to the original owner or his legal heir,“ said Jatin Zaveri, a Supreme Court advocate. “However, by widening the definition of enemy to include legal representatives or heirs and including the new Section 8A that empowers the custodian to dispose of the enemy property vested in it, it is no longer possible to make claims on an enemy property and the government is free to dispose it off and monetise it.“

The home ministry's annual re port for 2015-16 states that the government has opened two new branch offices of the custodian at Lucknow and Delhi in 2014 and intends to detect more enemy properties in various states by conducting a countrywide survey. The survey has begun in Uttar Pradesh, West Bengal, Delhi, Madhya Pradesh and Kerala.

“To be sure, enemy property is different from evacuee property,“ said Yadav. While the former is the fallout of India's conflicts with China and Pakistan, the latter refers to assets abandoned at the time of partition.

The select committee report mentions the crucial vesting period for assets of Chinese nationals has been determined as running from from October 26, 1962, to January, 10, 1968, and that for the Pakistani nationals from September, 10, 1965, to September 26, 1977.

One of the recommendations of the select sommittee was that the process of identification of enemy properties should be completed within two years from the date of enactment of the amendment.

Immediately after the passage of the bill, the custodian should dispose of all non-contentious enemy properties without delay.
Business Standard New Delhi,17th March 2017

Comments

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...

External spillovers likely to hit India's financial system: RBI report

  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

  New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...