This Bill — The Enemy Property (Amendment and Validation) Second Bill, 2010 — would replace an earlier Bill introduced in the last session which would have nullified court orders stretching back three decades. The courts have consistently asked the government to return properties seized from “enemy subjects” in the time of war to owners or heirs.
At the centre of the whole ruckus, over the past few decades, was the case of Mohammad Amir Mohammad Khan, the Raja of Mehmudabad. Properties worth several thousand crores of his late father — a Pakistani citizen — in undivided Uttar Pradesh had been confiscated by the government during the 1965 Indo-Pak war. It was only in 2005 that the Supreme Court ruled that properties be returned to the Raja, him being an Indian citizen.
In fact, the whole controversy has been over a simple question: does the government have the right to permanently hold onto property seized as part of temporary measures enacted in the time of a war? Courts have always said no.
The new amendments proposed in the Bill tabled in Parliament this week recognise all this. Which means those who can prove that they are legal heirs of “enemy subjects” would get back their property from the government.
But the door has been closed on enemy properties without owners or legal heirs. The government can effectively sell such properties it confiscated after the 1965 war with Pakistan and placed under state-appointed custodians — something which courts had earlier said the government could not do. Furthermore, the courts cannot pass any new orders, which restore property back to the owners or their heirs. Only the government can do that.
At a recent press conference, there was a telling comment by home minister P Chidambaram, who came under sharp attack from ministerial colleague Salman Khurshid over the home ministry’s handling of the issue. When asked why he had decided to include certain amendments to the Bill, he said: “When we went to the history, we found that the first judgement came in 2005 and subsequently, there have been high court judgments following that from many courts. …We then decided that the only way was to reverse the statement of law and restore the original position of law as stated in 1968.”
Ironically, it was precisely this law that courts, since at least 1976, have relied on to take a stance that was in stark contrast to that of the government. And to understand why, we need to go back to the source of all the controversy, the law itself and the context in which it was made.
PROPERTY IN THE TIME OF WAR During wars, states have always seized properties of those whom they consider enemies, or more often, those whom they consider potential enemies. The idea is to prevent such property being used to finance or support the other side.
After 1962 when the Indian government first authorised the seizing of “enemy” property, the next bunch of orders were issued later in 1965 during the war with Pakistan and it was then that the properties of the Raja of Mehmudabad — father of the current Raja who had emigrated to Pakistan in 1957 — were seized. Rules on enemy property were temporary in nature, and would have lapsed with the lifting of the emergency act. It was because it was faced with a possible legal vacuum that the government introduced the Enemy Property ordinance in 1968, and then followed it up with the Act. By the time of the 1971 war, the office of the custodian was well on its way to becoming a permanent one.
IT IS SIMILAR ELSEWHERE In theory, the holding of enemy property by the government should not be permanent — it lasts only as long as the war itself. In fact, governments have often hemmed and hawed before handing the property back.
During the First World War, for instance, the US appointed a custodian of “alien” property very much like the one in this country. In that case, the custodian, a political appointee named Mitchell Palmer went on to govern an empire of properties seized from German nationals worth more than $700 million, which he, unsurprisingly, was reluctant to give up, even after the war ended.
When countries have returned enemy properties, they have often done so because of international agreements. After the Islamic Revolution in Iran in 1979, the Iranian government seized foreign assets in that country, following which the US froze Iranian assets in the US. Yet, in 1981, both countries came to an agreement, mediated by Algeria under which the US agreed to release Iranian assets. In return, Iran agreed to the setting up of a tribunal, staffed by both countries, which would hear all cases of compensation filed by Americans against Iran — the deal may well have been possible because Iranian state assets had been frozen instead of the personal assets of citizens.
Under the Tashkent Declaration of 1966, which India signed with Pakistan, both sides agreed to come to a mutual agreement at some point in future about the “enemy” properties seized by each other. No such deal was ever made. “We found that by the early 1980s, Pakistan had sold off most of the properties they had seized,” says an Indian government official who asked not to be named. In India, this meant that owners or their descendants had effectively one avenue of redress only: the courts.
UNAMBIGUOUS STANCE BY COURTS The country’s courts have been very clear about what the Act meant. “According to the Supreme Court, when the property ‘vested’ with the custodian, it was only for purposes of management and administration,” says Ashok Desai who was one of the counsels for the Raja in the 2005 case. “At no time did the title pass to the custodian.”
The Calcutta High Court — in a judgement about enemy properties in Kolkata — was more explicit. “I must say that there is no provision [in the Act], not even any indication that the enemy owner of the property shall be stripped of all his rights,” said the high court judge deciding the case. This was in 1976.
But the principle goes back even further. As early as 1949, Alladi Krishnswamy Aiyar, during Constituent Assembly debates over citizenship, had argued that the laws of property had little to do with nationality or citizenship. “During a war, the conditions may require the state to exercise some control over enemy property or the property of foreigners. That is not to say that the property of the foreigners or the enemy has been confiscated. No principle of international law recognises this principle.”
At different points, judges have also pointed to two other facts about the enemy property law. First, the very way the law is worded implies that the vesting of property with the government was only temporary. For instance, at one point the Act says clearly that the government can pass orders to “return” the property to its owner or to anyone else. And second, the Act specifically excludes Indian citizens — such as the Raja — from being defined as “enemies”.
It was on the basis of these two or three basic facts that the Supreme Court in 2005 arrived at its momentous decision.
Before the Raja ever saw the inside of a courtroom, he had already been issued a letter from the government (in 1981), informing him that the Cabinet had decided to return 25% of his properties. “Why 25%?” asks Vivek Tankha, additional solicitor general, who had also represented the Raja before the apex court. “Either, he gets it all or he gets nothing.” The government subsequently backtracked on this decision.
On other occasions though, the government seemed to be simply groping for reasons to hold on. Again, in the Raja’s case, the government told the Bombay High Court in the late 1990s that the only way properties could be released was if there was an agreement with Pakistan and Bangladesh over the issue.
ORIGINAL POSITION It’s in the context of the various court judgements that the ordinance promulgated on July 2 this year has to be seen. Rather than restoring the “original position” of the law as it was in 1968 — as Chidambaram said in his press conference — the Centre, in fact, overturned it. Because, for the first time the law clearly declared that when the government took over an enemy property, the title, and all other rights to ownership, would pass to it as well.
This included the right to sell the property. “Till the early 1980s, the government had sold properties off and on,” says the government official. “However since then, various courts had made it clear that the custodian did not have the power to sell properties, but only to manage them.”
Even as latest changes concede the right of heirs to get back “enemy property”, the Bill proposes to retain provisions that give the government the right to sell such properties in the absence any claimants. According to the amendments proposed in the latest Bill, even if the government did not have the original papers to a property, it could still issue a certificate of sale to anyone who bought an enemy property from the government. And such a certificate would be as good as any title deed. This principle is reflected in the current Bill as well.
By introducing these changes, the government expects to close the door once and for all on a conflict that has far outlived the wars it grew out of.
Some of the Raja’s Prominent Properties
• Butler Palace (10,000 sq ft with a pond is located in a tony residential area of Lucknow).
• Mehmudabad Mansion in Hazratganj (70,000 sq ft of commercial space in the most prominent market of Lucknow).
• Lawrie Building also in Hazratganj (80,000 sq ft has several famous showrooms for which the current rents are not more than a few hundred rupees).
• Part of Halwasiya and Janpath market in Hazratganj (90,000 sq ft)
• The official bungalow of the Superintendent of Police (SP) Lakhimpur
• Bungalows of the DM, SSP and CMO in Sitapur
• Metropole Hotel in Nainital
At the centre of the whole ruckus, over the past few decades, was the case of Mohammad Amir Mohammad Khan, the Raja of Mehmudabad. Properties worth several thousand crores of his late father — a Pakistani citizen — in undivided Uttar Pradesh had been confiscated by the government during the 1965 Indo-Pak war. It was only in 2005 that the Supreme Court ruled that properties be returned to the Raja, him being an Indian citizen.
In fact, the whole controversy has been over a simple question: does the government have the right to permanently hold onto property seized as part of temporary measures enacted in the time of a war? Courts have always said no.
The new amendments proposed in the Bill tabled in Parliament this week recognise all this. Which means those who can prove that they are legal heirs of “enemy subjects” would get back their property from the government.
But the door has been closed on enemy properties without owners or legal heirs. The government can effectively sell such properties it confiscated after the 1965 war with Pakistan and placed under state-appointed custodians — something which courts had earlier said the government could not do. Furthermore, the courts cannot pass any new orders, which restore property back to the owners or their heirs. Only the government can do that.
At a recent press conference, there was a telling comment by home minister P Chidambaram, who came under sharp attack from ministerial colleague Salman Khurshid over the home ministry’s handling of the issue. When asked why he had decided to include certain amendments to the Bill, he said: “When we went to the history, we found that the first judgement came in 2005 and subsequently, there have been high court judgments following that from many courts. …We then decided that the only way was to reverse the statement of law and restore the original position of law as stated in 1968.”
Ironically, it was precisely this law that courts, since at least 1976, have relied on to take a stance that was in stark contrast to that of the government. And to understand why, we need to go back to the source of all the controversy, the law itself and the context in which it was made.
PROPERTY IN THE TIME OF WAR During wars, states have always seized properties of those whom they consider enemies, or more often, those whom they consider potential enemies. The idea is to prevent such property being used to finance or support the other side.
After 1962 when the Indian government first authorised the seizing of “enemy” property, the next bunch of orders were issued later in 1965 during the war with Pakistan and it was then that the properties of the Raja of Mehmudabad — father of the current Raja who had emigrated to Pakistan in 1957 — were seized. Rules on enemy property were temporary in nature, and would have lapsed with the lifting of the emergency act. It was because it was faced with a possible legal vacuum that the government introduced the Enemy Property ordinance in 1968, and then followed it up with the Act. By the time of the 1971 war, the office of the custodian was well on its way to becoming a permanent one.
IT IS SIMILAR ELSEWHERE In theory, the holding of enemy property by the government should not be permanent — it lasts only as long as the war itself. In fact, governments have often hemmed and hawed before handing the property back.
During the First World War, for instance, the US appointed a custodian of “alien” property very much like the one in this country. In that case, the custodian, a political appointee named Mitchell Palmer went on to govern an empire of properties seized from German nationals worth more than $700 million, which he, unsurprisingly, was reluctant to give up, even after the war ended.
When countries have returned enemy properties, they have often done so because of international agreements. After the Islamic Revolution in Iran in 1979, the Iranian government seized foreign assets in that country, following which the US froze Iranian assets in the US. Yet, in 1981, both countries came to an agreement, mediated by Algeria under which the US agreed to release Iranian assets. In return, Iran agreed to the setting up of a tribunal, staffed by both countries, which would hear all cases of compensation filed by Americans against Iran — the deal may well have been possible because Iranian state assets had been frozen instead of the personal assets of citizens.
Under the Tashkent Declaration of 1966, which India signed with Pakistan, both sides agreed to come to a mutual agreement at some point in future about the “enemy” properties seized by each other. No such deal was ever made. “We found that by the early 1980s, Pakistan had sold off most of the properties they had seized,” says an Indian government official who asked not to be named. In India, this meant that owners or their descendants had effectively one avenue of redress only: the courts.
UNAMBIGUOUS STANCE BY COURTS The country’s courts have been very clear about what the Act meant. “According to the Supreme Court, when the property ‘vested’ with the custodian, it was only for purposes of management and administration,” says Ashok Desai who was one of the counsels for the Raja in the 2005 case. “At no time did the title pass to the custodian.”
The Calcutta High Court — in a judgement about enemy properties in Kolkata — was more explicit. “I must say that there is no provision [in the Act], not even any indication that the enemy owner of the property shall be stripped of all his rights,” said the high court judge deciding the case. This was in 1976.
But the principle goes back even further. As early as 1949, Alladi Krishnswamy Aiyar, during Constituent Assembly debates over citizenship, had argued that the laws of property had little to do with nationality or citizenship. “During a war, the conditions may require the state to exercise some control over enemy property or the property of foreigners. That is not to say that the property of the foreigners or the enemy has been confiscated. No principle of international law recognises this principle.”
At different points, judges have also pointed to two other facts about the enemy property law. First, the very way the law is worded implies that the vesting of property with the government was only temporary. For instance, at one point the Act says clearly that the government can pass orders to “return” the property to its owner or to anyone else. And second, the Act specifically excludes Indian citizens — such as the Raja — from being defined as “enemies”.
It was on the basis of these two or three basic facts that the Supreme Court in 2005 arrived at its momentous decision.
Before the Raja ever saw the inside of a courtroom, he had already been issued a letter from the government (in 1981), informing him that the Cabinet had decided to return 25% of his properties. “Why 25%?” asks Vivek Tankha, additional solicitor general, who had also represented the Raja before the apex court. “Either, he gets it all or he gets nothing.” The government subsequently backtracked on this decision.
On other occasions though, the government seemed to be simply groping for reasons to hold on. Again, in the Raja’s case, the government told the Bombay High Court in the late 1990s that the only way properties could be released was if there was an agreement with Pakistan and Bangladesh over the issue.
ORIGINAL POSITION It’s in the context of the various court judgements that the ordinance promulgated on July 2 this year has to be seen. Rather than restoring the “original position” of the law as it was in 1968 — as Chidambaram said in his press conference — the Centre, in fact, overturned it. Because, for the first time the law clearly declared that when the government took over an enemy property, the title, and all other rights to ownership, would pass to it as well.
This included the right to sell the property. “Till the early 1980s, the government had sold properties off and on,” says the government official. “However since then, various courts had made it clear that the custodian did not have the power to sell properties, but only to manage them.”
Even as latest changes concede the right of heirs to get back “enemy property”, the Bill proposes to retain provisions that give the government the right to sell such properties in the absence any claimants. According to the amendments proposed in the latest Bill, even if the government did not have the original papers to a property, it could still issue a certificate of sale to anyone who bought an enemy property from the government. And such a certificate would be as good as any title deed. This principle is reflected in the current Bill as well.
By introducing these changes, the government expects to close the door once and for all on a conflict that has far outlived the wars it grew out of.
Some of the Raja’s Prominent Properties
• Butler Palace (10,000 sq ft with a pond is located in a tony residential area of Lucknow).
• Mehmudabad Mansion in Hazratganj (70,000 sq ft of commercial space in the most prominent market of Lucknow).
• Lawrie Building also in Hazratganj (80,000 sq ft has several famous showrooms for which the current rents are not more than a few hundred rupees).
• Part of Halwasiya and Janpath market in Hazratganj (90,000 sq ft)
• The official bungalow of the Superintendent of Police (SP) Lakhimpur
• Bungalows of the DM, SSP and CMO in Sitapur
• Metropole Hotel in Nainital
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