Insights
Disposal and monetization of enemy property in India
April 28, 2023As per the Enemy Property Act, 1968, ‘enemy property’ means any property belonging to or held or managed on behalf of an ‘enemy’, being a person or country who or which was an enemy and includes all rights, titles and interest in, or any benefit arising out of such property. Further, notwithstanding that the enemy has ceased to be an enemy due to death, extinction, winding up of business or change of nationality or that the legal heir and successor is a citizen of India or the citizen of a country which is not an enemy, such property shall continue and always be deemed to be continued as an ‘enemy property’.
The enemy properties are vested in the Custodian of Enemy Property for India.
Section 8A of the Enemy Property Act, 1968 provides for the sale of property by the Custodian. Further, sub-section 6 of Section 8A provides that the Central Government may, by general or special order, make such guidelines for disposal of enemy property. Accordingly, the Central Government issued Guidelines for the disposal of Enemy Property Order, 2018 (“Guidelines”).
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Further, the Ministry of Home Affairs modified the aforesaid Guidelines by issuance of a Notification dated 17th March, 2023 (“Notification”).
The Guidelines read with the Notification inter alia provide that in case of sale of vacant enemy property, the Custodian or the authorized body may sell the property by either (a) obtaining quotations from persons interest in purchasing the property or (b) by inviting tenders from the public or (c) holding public auction or (d) any other method of sale or (e) by engaging a professional body for sale of the property.
Further, in case of occupied enemy property, the process for eviction of the enemy property shall be with the help of the District Magistrate or Deputy Commissioner, before the sale of such properties. For properties valued below Rs. 1 crore, the Custodian shall first offer the occupant to purchase such property and if the occupant refuses to purchase the property, then the property shall be disposed off in the manner set out hereinbelow.
In case of properties having valuation of or more than Rs.1 crore but less than Rs.100 crore, the property shall be disposed off through e-auction (through the e-auction platform of public enterprise, Metal Scrap Trade Corporation Limited) or otherwise in the manner as may be decided by the Central Government and at the rate prescribed by the Enemy Disposal Committee.
Section 10A of the Enemy Property Act, 1968 provides that the Custodian shall on receipt of the sale proceeds, issue a sale certificate (in the manner provided for in the Guidelines) and such certificate shall, notwithstanding the fact that the original title deeds have not been handed over to such purchaser, be valid and conclusive proof of the transfer of such property.
As per various news publications, it appears that, there are a total of 12,611 enemy properties in India (out of which approximately 208 are in Maharashtra) which are approximately worth over Rs. 1 lakh crore. The Ministry of Home Affairs has set the ball rolling on the disposal and monetization of such properties which is sure to attract attention from developers across the country and will serve to a win-win for the Central Government as well as developers.
This article was originally published in Mondaq on 28 April 2023 Co-written by: Bhoumick Vaidya, Partner; Harshini Kotecha, Associate. Click here for original article
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Contributed by: Bhoumick Vaidya, Partner; Harshini Kotecha, Associate
Disclaimer
This is intended for general information purposes only. The views and opinions expressed in this article are those of the author/authors and does not necessarily reflect the views of the firm.
