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Enemy Property Act, 1968 – Whether statutory vesting of enemy property including the subject property in the Custodian for Enemy Property amounts to expropriation and transfer of ownership so as to confer ownership of such enemy property on the Custodian – Enemy Property Rules, 2015 – r.15. Held: The Custodian for Enemy Property in India, in whom the enemy properties vest including the subject property, does not acquire ownership of the said properties – The enemy properties vest in the Custodian as a trustee only for the management and administration of such properties – The Central Government may, on a reference or complaint or on its own motion initiate a process of divestment of enemy property vested in the Custodian to the owner thereof or to such other person vide Rule 15 of the Rules – Hence, the vesting of the enemy property in the Custodian is only as a temporary measure and he acts as a trustee of the said properties – In view of the position of a Custodian, who under the Enemy Property Act, 1968, acts as the trustee for the enemy property under the Act and not as the owner of the property, but as a protector of the property vested in him, the Custodian can never be an owner or having any right, title or interest in the enemy property as owner.[Paras 16.1, 22.4] Taxation – Of Enemy property – Constitution of India – Art. 285 – If ownership of enemy property is conferred on the Custodian for Enemy Property, whether such property becomes Union property within meaning of Art. 285 of the Constitution and therefore, it is exempt from payment of property or other local taxes to appellant-Municipal Corporation under provisions of the Act of 1959 – Whether despite such enemy property becoming property of the Union, clause (2) of Article 285 of the Constitution enables appellant to impose property or other local taxes on the respondent which is lessee of the subject property – Enemy Property Act, 1968 – UP Municipal Corporation Adhiniyam, 1959. Held: Vesting of enemy property in the Custodian does not transfer ownership of such property in the Custodian and by that process in the Union or Central Government, but since the Custodian is only a trustee of the enemy property, the same is liable to tax in accordance with law, including to the appellant – The Custodian is only authorised to pay the taxes on the subject enemy property – The Custodian while doing so is not acting on behalf of the Union Government being the owner of the enemy property, rather, the Custodian who is appointed by the Central Government under the provisions of the Act, which is a Central legislation only discharges his duties and functions under the provisions of the Parliamentary legislation i.e. the Act under consideration – Such discharge of duties and functions, including the payment of taxes vis-à-vis enemy property vested in him would not also by the same logic imply that the Custodian is acting as if the property vested in him has become the Union property – Mere vesting of enemy property in the Custodian does not transfer ownership of the same from the enemy to the Union or to the Central Government; the ownership remains with the enemy but the Custodian only protects and manages the enemy property and in discharging his duties as the Custodian or the protector of enemy property he acts in accordance with the provision of the Act and on the instructions or guidance of the Central Government – The reason as to why the Central Government is empowered to issue guidelines or instructions to the Custodian is because the Custodian is appointed under the Act which is a Parliamentary legislation and the reason why the Parliament has passed the said law is in order to have a uniformity vis-à-vis all enemy properties throughout the length and breadth of the country in that the same are protected, managed and dealt with uniformly in accordance with the provisions of the Act – Union of India cannot assume ownership of the enemy properties once the said property is vested in the Custodian – This is because, there is no transfer of ownership from the owner of the enemy property to the Custodian and consequently, there is no ownership rights transferred to the Union of India – Therefore, the enemy properties which vest in the Custodian are not Union properties – As the enemy properties are not Union properties, clause (1) of Article 285 does not apply to enemy properties – Clause (2) of Article 285 is an exception to clause (1) and would apply only if the enemy properties are Union properties and not otherwise – High Court was not right in holding that the respondent as occupier of the subject enemy property, is not liable to pay any property tax or other local taxes to the appellant – Consequently, any demand for payment of taxes under the Act of 1959 made and thereby paid by the respondent to the appellant-authority shall not be refunded – However, if no demand notices have been issued till date, the same shall not be issued but from the current fiscal year onwards (2024-2025), the appellant shall be entitled to levy and collect the property tax as well as water tax and sewerage charges and any other local taxes in accordance with law. [Paras 17.9, 22.4] Constitution of India – Art.300A – Art. 300A states that no person shall be deprived of his property save by authority of law – Expressions “law”, “person”, “property” and “by authority of law” – Meaning of – Whether having regard to Art. 300A, taking possession of the enemy property for the purpose of administration of the same by the Custodian, is an instance of transfer of ownership from the true owner to the Custodian and thereby to the Union – Enemy Property Act, 1968. Held: The word “law” is with reference to an Act of Parliament or of a State Legislature, a rule or a statutory order having the force of law – Although, to hold property is not a fundamental right, yet it is a constitutional right – The expression person in Article 300-A covers not only a legal or juristic person but also a person who is not a citizen of India – The expression property is also of a wide scope and includes not only tangible or intangible property but also all rights, title and interest in a property – Before a person can be deprived of his right to property, the law must expressly and explicitly state so – Thus, the expression by authority of law means by or under a law made by the competent Legislature – Having regard to the salutary principles of Art. 300-A, one cannot construe the taking of possession of the enemy property for the purpose of administration of the same by the Custodian, as an instance of transfer of ownership from the true owner to the Custodian and thereby to the Union – This position is totally unlike the position under the provisions of the Land Acquisition Act, 1894 or the subsequent legislation of 2013 which are expropriatory legislations under which acquisition of land would inevitably result in transfer of the ownership of the land from the owner to the State which is the acquiring authority, but the same would be subject to payment of a reasonable and fair compensation to the owner. [Paras 18 and 18.2] Words and Phrases – Expression “vest” and “vesting” – Meaning of. Held: The expression ‘vest’ or ‘vesting’ has no precise definition and it would depend upon the context in which the expression is used under a particular enactment – The word ‘vesting’ is a word of variable input and has more than one meaning which must be discerned and the exact connotation must be found by looking into the scheme of law and the context in which it is used – The setting in which it is used would lend colour to it and divulge the legislative intent – Vesting of property in a person or authority does not always mean transfer of absolute title in the property. [Para 16] Enemy Property Act, 1968 – Jurisprudential aspects of ownership of property vis-à-vis the status of the Custodian of Enemy Property for India under the Act – Jurisprudential aspects of vesting or taking possession as per provisions of the Act – Relationship between possession and ownership. [Paras 14 to 14.16] Constitution of India – Article 285 – Scope and ambit of the two clauses of Art. 285 – Discussed. [Paras 21.1 to 21.10] |
