Strict Compliance with Enemy Property Act 1968 & 2015 Rules Mandatory for Vesting | Bombay HC

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 and the Enemy Property Rules, 2015. The Court set aside orders and mutation entries declaring certain Wakf properties as enemy property, emphasizing that vesting must comply with statutory procedures and principles of natural justice.

Background & Facts

The Dispute

Three writ petitions were filed by purchasers and the Wakf challenging communications and mutation entries issued by the Custodian of Enemy Property for India (CEPI) declaring certain Wakf properties as enemy property. The properties in question were part of a Wakf-al-aulad created by Khan Bahadur Haji Shaikh Meherbaksh on 19th January 1926 for the benefit of his family members and descendants. The suit properties were purchased by the petitioners through registered instruments in 1988 and 1990.

Key Facts

• The Wakf was created under the Mussalman Wakf Validating Act, 1913, and governed by the Muslim Wakf Act, 1954.
• The suit properties were purchased by the petitioners through registered instruments dated 14th September 1988 and 12th January 1990.
• On 10th March 2004, CEPI issued a notice declaring the Wakf properties as enemy property, followed by a certificate dated 5th April 2004 under Section 12 of the Enemy Property Act, 1968.
• The CEPI subsequently withdrew the notice and certificate and issued a No Objection Certificate (NOC) on 26th November 2007, confirming that the Wakf properties were not enemy properties.
• Despite the NOC, an inquiry was initiated in 2019, leading to the impugned order dated 28th December 2021 and mutation entries dated 17th May 2023 and 30th May 2023 declaring the properties as enemy property.

Procedural History

• 1926: Wakf-al-aulad created by Khan Bahadur Haji Shaikh Meherbaksh.
• 1988: Petitioners purchased suit properties through registered instrument.
• 10.03.2004: CEPI issued notice declaring Wakf properties as enemy property.
• 05.04.2004: Certificate issued under Section 12 of the Enemy Property Act, 1968.
• 26.11.2007: CEPI issued NOC confirming Wakf properties were not enemy properties.
• 14.12.2007: Division Bench of Bombay High Court passed consent order in Writ Petition No. 1296 of 2004 disposing of the petition in terms of consent terms.
• 2019: Inquiry initiated by CEPI.
• 28.12.2021: CEPI issued impugned order declaring suit properties as enemy property.
• 15.05.2023: CEPI directed mutation entries to be made in revenue records.
• 17.05.2023: Mutation Entry No. 1218/1219 made in revenue records.
• 30.05.2023: Mutation Entry No. 571 made in revenue records.
• 2024-2023: Present writ petitions filed before Bombay High Court.

Relief Sought

The petitioners sought quashing of the impugned communications and mutation entries, declaration that the suit properties were not enemy property, and restoration of their names in the revenue records.

The Legal Issue

The central question was whether the Custodian of Enemy Property for India (CEPI) could declare and vest properties as enemy property without complying with the procedural requirements under the Enemy Property Act, 1968 and the Enemy Property Rules, 2015, including the principles of natural justice.

Arguments Presented

For the Petitioners

• The suit properties were never declared as enemy property by the Central Government under Rule 133-V of the Defence of India Rules, 1962.
• The CEPI had no jurisdiction to declare the properties as enemy property without following the procedure prescribed under the Enemy Property Act, 1968 and the Enemy Property Rules, 2015.
• The CEPI violated principles of natural justice by not issuing a show cause notice to the petitioners before declaring the properties as enemy property.
• The consent order dated 14th December 2007 and the NOC issued by the CEPI confirmed that the Wakf properties were not enemy properties.
• The petitioners were bonafide purchasers for valuable consideration and had valid title over the properties.

For the Respondent

• The vesting of enemy property was automatic under the Enemy Property Act, 1968 and the Enemy Property (Amendment and Validation) Act, 2017.
• The CEPI had the authority to declare properties as enemy property without following the procedure prescribed under the Enemy Property Rules, 2015.
• The consent order dated 14th December 2007 was not binding on the CEPI as it was based on a concession and not a judicial determination.
• The petitioners had no right to transfer the properties as they were enemy property vested in the CEPI.

The Court's Analysis

The Court meticulously examined the provisions of the Enemy Property Act, 1968, the Enemy Property (Amendment and Validation) Act, 2017, and the Enemy Property Rules, 2015. The Court held that the vesting of enemy property must comply with the statutory framework and principles of natural justice.

"From a careful reading of the scheme of the Defence of India Act, 1962, Defence of India Rules, 1962, the Defence of India Rules, 1971 as well as the Act of 1968, it is apparent that the Act and Rules of 1962 and 1971 were emergency and/or war time legislation which were framed with the specific purpose of preventing the properties in India belonging to the enemy, viz., the Nationals of China and Pakistan, from being funneled out of India and also to prevent any influence or economic exploitation of such property by the enemy subject."

The Court observed that the Act of 1968 provided for two modes of vesting: (1) by notification or order of the Central Government under the Defence of India Rules, 1962 or 1971, and (2) by declaration of the CEPI under Section 5A of the Act of 1968. However, the Court emphasized that even in cases of statutory vesting, the CEPI must follow the procedure prescribed under the Enemy Property Rules, 2015, including issuing a show cause notice and providing an opportunity of hearing to the affected parties.

"It would be incumbent upon the Custodian to make necessary inquiry and satisfy himself that the property in question is in fact an enemy property within the meaning of the Act of 1968. Therefore, even in case of statutory or automatic vesting of enemy property, by operation of law, such vesting would take effect only after a declaration is made to such effect upon the necessary verification and/or inquiry being conducted by the Custodian so as to record a prima facie satisfaction that the property in question is enemy property."

The Court also held that the consent order dated 14th December 2007 and the NOC issued by the CEPI were binding and could not be overridden by the subsequent actions of the CEPI. The Court further observed that the Doctrine of alternate remedy was not a bar to the exercise of writ jurisdiction under Article 226 of the Constitution of India, especially when the authority had no jurisdiction or had purported to usurp jurisdiction without any legal foundation.

The Verdict

The Court allowed all three writ petitions, declaring that there was no valid vesting of the Wakf properties on the CEPI. The Court set aside the impugned communications dated 28th December 2021 and the mutation entries dated 17th May 2023, 30th May 2023, and 15th May 2023. The Court directed the revenue authorities to delete the names of the CEPI from the revenue records and restore the names of the petitioners. The parties were directed to bear their own costs.

What This Means For Similar Cases

Vesting Requires Strict Compliance With Statutory Procedure

• The judgment underscores that vesting of enemy property under the Enemy Property Act, 1968 and the Enemy Property Rules, 2015 must strictly comply with the statutory framework.
• The CEPI cannot declare properties as enemy property without following the procedure prescribed under the Rules, including issuing a show cause notice and providing an opportunity of hearing.
• The judgment clarifies that even in cases of statutory vesting, the CEPI must record a prima facie satisfaction that the property is enemy property after conducting necessary inquiry and verification.

Consent Orders and NOCs Are Binding

• The judgment holds that consent orders passed by the High Court and NOCs issued by the CEPI are binding and cannot be overridden by subsequent actions of the CEPI.
• The Court emphasized that the consent order dated 14th December 2007 and the NOC issued by the CEPI confirmed that the Wakf properties were not enemy properties.

Natural Justice Is Non-Negotiable

• The Court reiterated that the principles of natural justice are inbuilt requirements of the Enemy Property Act, 1968.
• The CEPI must scrupulously adhere to the principles of natural justice before declaring properties as enemy property, including issuing a show cause notice and providing an opportunity of hearing to the affected parties.

Writ Jurisdiction Remains Unfettered

• The judgment clarifies that the Doctrine of alternate remedy is not a bar to the exercise of writ jurisdiction under Article 226 of the Constitution of India.
• The Court held that it is purely a matter of discretion of the High Court to entertain a writ petition even if an alternate remedy is available, especially when the authority had no jurisdiction or had purported to usurp jurisdiction without any legal foundation.