Above: Mehboobabad fort/ Picture Credit: Narendra Bisht
In an attempt to shore up its revenue, the government plans to sell 6,50,75,877 enemy shares in care of the Custodian of Enemy Property of India and achieve a target of raising Rs 1 trillion
By Ramesh Menon
In the run-up to the elections, the Modi government needs money to deliver on at least some of its promises and support welfare programmes that will give a boost to its image. It has thus hit upon a plan to make good some of the shortfall in revenue. It plans to sell the shares of people who moved to Pakistan after Partition in 1947.
These shares are called enemy shares. The stocks are expected to be around Rs 30 billion. Union Law Minister Ravi Shankar Prasad reportedly said: “The government stands to gain by selling enemy shares as the proceeds could be used for development and social welfare.”
There are 6,50,75,877 enemy shares in 996 companies of 20,323 shareholders with the Custodian of Enemy Property of India (CEPI). While most of the shares are those of people who moved during Partition to Pakistan and took citizenship there, a few are of Chinese citizens who left after the Indo-China war and never returned. After they left India to become citizens of either Pakistan or China, their properties in India was treated as enemy property.
The CEPI, which is empowered to appropriate property owned by Pakistani nationals, has identified as many as 16,000 properties that are valued at more than Rs 1 trillion. After the Indo-Pakistan war of 1965, the Enemy Property Act was promulgated in 1968. The Act authorised the government to appoint a custodian to handle enemy properties in India.
Last fortnight, the cabinet approved the sale of these enemy shares. Of them, 588 were active firms and included 139 listed on the stock exchange. The government view was that these enemy shares were lying dormant and they could now be monetised using the clauses of the Enemy Property Act.
The government has been trying to disinvest but not with great success. Its plan to sell Air India, for instance, has been stymied as there were no buyers. The government wants to show the proceeds from the sale of enemy stocks and properties as a part of its disinvestment plan. By the end of March 2019, India wants to achieve its target of raising Rs 1 trillion by selling state assets. The sale proceeds, according to the government, will be deposited as disinvestment proceeds in an account maintained by the Ministry of Finance. The Department of Investment and Public Asset Management has been authorised to sell the shares.
The government has been planning to dispose of these properties for the last two years. Enemy property refers to any property belonging to, held or managed on behalf of an enemy, an enemy subject or an enemy firm, according to the Enemy Property Act, 1968.
Families who remain in the listed properties fear being evicted any time. Pakistan had also enacted a similar enemy property law and took it over a few years ago. Early this year, the government said that it had identified more than 9,400 “enemy” assets that could be cleared for auction. Among these, 9,280 properties were left behind by Pakistani nationals and the rest were left behind by the Chinese.
One person, Raja Mohammed Amir Khan of Mahumudabad, stands to lose nearly 900 properties spread out in Hazratganj, Sitapur and Nainital. His father, RM Amir Ahmed Khan, left to become a Pakistani citizen ten years after Partition. His wife and son stayed back. In fact, he even contested elections and was an MLA from UP twice. The irony stares him in the face as the property legally handed over to him is seen as enemy property, while he engages in a legal battle to challenge the government move to take it over.
The Modi government has for long been trying to tighten the provisions of the Act to ensure that the heirs of those who chose to become Pakistanis or Chinese cannot claim that property. Thousands of Muslims could lose the property inherited from their ancestors who moved to Pakistan. Obviously, the government’s move has triggered outrage among many of them. They now fear that they can be evicted anytime out of properties that they or their relatives lived in for the last 70 years.
Before initiation of sale of any enemy share, the CEPI will certify that the sale does not violate any judgment, decree or order of any court, tribunal or authority or any law and can be disposed off by the government. An inter-ministerial group will guide the process of sale.
A Supreme Court judgment had earlier said that enemy property should not get transferred to the descendants of the erstwhile owners and must go to the government.
Amir Khan told India Legal: “I chose to stay back as I loved India and there is enough to prove that I did all I could for the country in terms of public service. Today, the property I have rightfully and legally inherited is seen as enemy property. It really hurts.”
There are many others who feel the same way.