2005 (10) TMI 544 - SC - Indian Laws

Summary

Issues Involved:
1. Vesting of enemy property in the Custodian.
2. Right, title, and interest of the original owner in enemy property.
3. Status of property after the death of the original enemy subject.
4. Legal implications of the Enemy Property Act, 1968.
5. Entitlement of the respondent to the property as an Indian citizen.
6. Actions and inactions of the Union of India and Custodian.
7. Court's authority to divest the Custodian of enemy property.
8. Conduct of the Union of India in retaining the property.
9. Mesne profits and compensation.

Detailed Analysis:

1. Vesting of Enemy Property in the Custodian:
The Defence of India Rules, 1962, authorized the Central Government to appoint a Custodian of Enemy Property to preserve enemy property. The property of the respondent's father, who migrated to Pakistan in 1957, vested in the Custodian under these rules and continued under the Enemy Property Act, 1968.

2. Right, Title, and Interest of the Original Owner in Enemy Property:
The High Court interpreted Sections 6, 8, and 18 of the Enemy Property Act, concluding that the owner is not divested of his right, title, and interest in the property. The vesting in the Custodian is limited to possession, management, and control temporarily.

3. Status of Property After the Death of the Original Enemy Subject:
After the death of the respondent's father in 1973, the respondent, an Indian citizen, inherited the property. The High Court held that the property ceased to be enemy property as the title now vested in an Indian citizen.

4. Legal Implications of the Enemy Property Act, 1968:
The Act was enacted to continue the vesting of enemy property in the Custodian. Section 2(b) excludes Indian citizens from being considered enemies. Section 2(c) defines enemy property, but the proviso allows property to be considered enemy property even after the enemy subject's death.

5. Entitlement of the Respondent to the Property as an Indian Citizen:
The respondent, an Indian citizen, was declared the sole heir and successor of his father. The property, therefore, could not be considered enemy property under Section 2(c) of the Act. The High Court directed the Custodian to hand over the property to the respondent.

6. Actions and Inactions of the Union of India and Custodian:
Despite protracted correspondence and a decree in favor of the respondent, the Custodian failed to release the property. The Union of India's refusal to disclose the Cabinet note regarding the property release decision indicated mala fide intentions.

7. Court's Authority to Divest the Custodian of Enemy Property:
The Court rejected the argument that only the Central Government could divest the Custodian of enemy property. The Court held that it had the authority to pass appropriate orders when the property ceased to be enemy property and vested in an Indian citizen.

8. Conduct of the Union of India in Retaining the Property:
The Union of India's conduct in retaining the property for 32 years was deemed highly objectionable and unjust. The Court criticized the authorities for depriving the respondent of possession and enjoyment of the property without justification.

9. Mesne Profits and Compensation:
The High Court refused to grant mesne profits to the respondent, and no appeal was filed against this finding. The respondent was entitled to actual mesne profits by filing a suit for the period after the interim orders of status quo by the Court on 5.4.2002.

Conclusion:
The Supreme Court dismissed the appeal, directing the appellants to vacate and hand over the properties to the respondent within eight weeks. The appellants were also ordered to deposit/disburse any collected rent or lease money to the respondent. The Court imposed costs of Rs. 5 Lacs on the appellants for retaining the property illegally and in a high-handed manner for 32 years.