The Bombay High Court has delivered a significant judgment clarifying the procedural requirements for vesting of property as enemy property under the Enemy Property Act, 1968. The Court held that automatic vesting is not permissible without compliance with the Enemy Property Rules, 2015 and principles of natural justice. The judgment underscores that the Custodian of Enemy Property for India cannot encumber properties without following due process, including issuance of show cause notices and conducting inquiries.
Background & Facts
The Genesis of the Dispute
The three writ petitions before the Bombay High Court involved challenges to communications issued by the Custodian of Enemy Property for India (Respondent No. 3) and mutation entries made in revenue records treating certain Wakf properties as enemy properties. The properties in question were purchased by the petitioners from the Wakf, which had created a Wakf-al-aulad in 1926 for the benefit of its family members and descendants.
Key Facts
- The Wakf was created by Khan Bahadur Haji Shaikh Meherbaksh on 19.01.1926, exclusively for the benefit of his family members and descendants. The suit properties formed part of this Wakf.
- The petitioners purchased the suit properties by registered instruments in 1988 and 1990, with their names recorded in the revenue records.
- In 2004, the Custodian issued a notice and certificate declaring the Wakf properties as enemy properties. These were subsequently withdrawn in 2007 pursuant to a consent order passed by the High Court in Writ Petition No. 1296 of 2004.
- The consent order dated 14.12.2007 recorded that the Custodian had issued a No Objection Certificate (NOC) to the Wakf, withdrawing the earlier notices and certificates, and agreed to delete adverse endorsements in revenue records.
- Despite the consent order, the Custodian issued a communication dated 28.12.2021 and directed mutation entries to be made in revenue records treating the properties as enemy properties. Mutation Entry No. 1218/1219 was made on 17.05.2023, deleting the names of the petitioners and recording the Custodian as the owner.
Procedural History
- 1926: Wakf created by Khan Bahadur Haji Shaikh Meherbaksh.
- 1988: Petitioners purchased suit properties by registered instruments.
- 1990: Names of petitioners recorded in revenue records.
- 2004: Custodian issued notice and certificate declaring Wakf properties as enemy properties.
- 2007: Consent order passed in Writ Petition No. 1296 of 2004, withdrawing notices and certificates.
- 2019: Inquiry initiated by Custodian.
- 28.12.2021: Custodian issued impugned communication directing mutation entries.
- 15.05.2023: Custodian directed revenue authorities to record mutation entries.
- 17.05.2023: Mutation Entry No. 1218/1219 made in revenue records.
- 2024: Present writ petitions filed before Bombay High Court.
Relief Sought
The petitioners sought quashing of the impugned communications and mutation entries, declaration that the properties are not enemy properties, and restoration of their names in revenue records.
The Legal Issue
The central question was whether the Custodian of Enemy Property for India could encumber the suit properties as enemy properties without following the procedure prescribed under the Enemy Property Rules, 2015 and principles of natural justice.
Arguments Presented
For the Petitioners
The petitioners argued that:
- The properties were never declared as enemy properties by the Central Government under Rule 133-V of the Defence of India Rules, 1962.
- The impugned orders were issued without examining jurisdictional facts or ascertaining if any order had been passed vesting the properties on the Custodian.
- The Custodian failed to issue show cause notices to the petitioners, violating principles of natural justice.
- The consent order dated 14.12.2007 had settled the issue, and the Custodian had no jurisdiction to reopen the matter.
- The properties were purchased by the petitioners for valuable consideration, and their names were recorded in revenue records long before the impugned orders.
The petitioners relied on Union of India & Anr. v. Raja Mohammed Amir Mohammad Khan, Lotus Classique Housing Society v. Union of India, and Neelkamal Realtors Suburban Pvt. Ltd. v. Office of CEPI.
For the Respondent
The Custodian argued that:
- The vesting of enemy property on the Custodian is automatic by operation of law under the Enemy Property Act, 1968 and the Enemy Property (Amendment and Validation) Act, 2017.
- The properties in question belonged to Pakistani nationals, and the vesting was automatic under the Defence of India Rules, 1962 and 1971.
- The consent order dated 14.12.2007 was not binding as it was based on a misconception of law.
- The petitioners had no right to the properties as the same were enemy properties.
The Custodian relied on orders of the Kerala High Court and a notification issued by the Government of India.
The Court's Analysis
The Court meticulously examined the scheme of the Enemy Property Act, 1968, the Enemy Property (Amendment and Validation) Act, 2017, and the Enemy Property Rules, 2015. The Court observed that the Act and Rules provide for two modes of vesting of enemy property on the Custodian:
- By an order or notification issued by the Central Government under Rule 133-V of the Defence of India Rules, 1962 or 1971.
- By a declaration issued by the Custodian under Section 5A of the Act of 1968, after conducting an inquiry and following the procedure prescribed under the Rules of 2015.
The Court held that automatic vesting without compliance with the procedure prescribed under the Rules of 2015 and principles of natural justice is impermissible. The Court noted that Rule 4 of the Rules of 2015 mandates that the Custodian must serve a show cause notice in Form 1 on the person claiming title to the property and provide sufficient opportunity of being heard before declaring the property as enemy property.
"In the absence of any Notification issued by the Central Government specifically vesting the property on the Custodian by declaring the same as Enemy Property, property held by any person or institution cannot be encumbered by treating the same as Enemy Property based on mere ipse dixit of the Custodian, that too, by issuing ex-parte orders/directions."
The Court also held that the consent order dated 14.12.2007 was a valid and binding order passed by the High Court in exercise of its writ jurisdiction under Article 226 of the Constitution of India. The Court rejected the argument that Section 22A(b) of the Act of 2017 could nullify the consent order, as the order was not a judgment, decree, or order of a court or tribunal directing divestment of enemy property.
The Court further held that the Custodian had no jurisdiction to issue the impugned communications or direct mutation entries without following the procedure prescribed under the Act and Rules. The Court observed that the Custodian's actions were in flagrant violation of the consent order and the principles of natural justice.
The Verdict
The Bombay High Court allowed all three writ petitions. The Court declared that there was no valid vesting of the Wakf properties on the Custodian at any point of time. The impugned communications dated 28.12.2021 and mutation entries dated 17.05.2023 were held to be illegal and dehors the law. The Court set aside the impugned communications and mutation entries and restored the names of the petitioners in the revenue records.
What This Means For Similar Cases
Compliance With Procedure Is Non-Negotiable
- The Enemy Property Act, 1968 and the Enemy Property Rules, 2015 provide a complete code for the vesting of enemy property.
- The Custodian cannot encumber properties as enemy properties without following the procedure prescribed under the Rules, including issuance of show cause notices and conducting inquiries.
- The principles of natural justice must be scrupulously followed before any adverse action is taken against property owners.
Consent Orders Are Binding
- Consent orders passed by the High Court in exercise of writ jurisdiction under Article 226 of the Constitution of India are binding and cannot be nullified by statutory provisions with retrospective effect.
- The Custodian cannot reopen matters settled by consent orders without valid reasons.
Automatic Vesting Is Not Permissible
- The vesting of property as enemy property is not automatic. It requires either a notification by the Central Government or a declaration by the Custodian under Section 5A of the Act of 1968, after following the procedure prescribed under the Rules of 2015.
- Mere ipse dixit of the Custodian is insufficient to treat property as enemy property.
Writ Jurisdiction Remains Unfettered
- The High Court's writ jurisdiction under Article 226 of the Constitution of India cannot be circumscribed or excluded by statutory provisions.
- The Court can entertain writ petitions even if alternative remedies are available, especially where the authority has acted without jurisdiction or usurped jurisdiction without legal foundation.
