Inheritance Under Enemy Property Act, Back To Surface With Saif Ali Khan's Case

The debate on the issue has resurfaced with Saif Ali Khan's case. The case involves nuanced conflict between heritage and legality, a chance to examine the historical evolution, judicial responses, amendments, and international parallel.

Historical Background to the case

The issue originates from the princely state of Bhopal, previously ruled by Nawab Hamidullah Khan. As one of the princely rulers, he initially resisted accession to India post-independence. However, he eventually acceded in 1949. He had three daughters, among whom the family fortune would later be contested. The eldest daughter, Abida Sultan, migrated to Pakistan in 1950 and renounced her claim to succession. The second daughter, Sajida Sultan, chose to remain in India and later married a former cricket captain, Iftikhar Ali Khan Pataudi. Their son Mansoor Ali Khan Pataudi, himself a cricketing legend was the father of actor Sai Ali Khan.

The Court officially recognized Saif Ali Khan as the official heir of Sajida Sultan in 2019, thus making him the legal heir of her portion of the estate. However, the controversy lies with the remaining share as the portion of the estate once owned by Abida Sultan is classified as 'enemy property' under the Act due to her Pakistani citizenship, thus effectively freezing those assets from being inherited or claimed.

The case exemplifies how a migration decision made years ago under the preview of the partition leads to a generational legal battle, making it a compelling case study for post-colonial inheritance law. While the case of Saif Ali Khan came to the limelight because of his celebrity status, several other families both royal and ordinary, have been equally affected by the Act. The most prominent case of the Raja of Mahmudabad, Raja Mohammad Amir Ahmed Khan, whose estate was declared as enemy property after he moved to Pakistan, despite the favourable ruling of the Hon'ble Supreme Court in 2005^[1], the ruling was reversed after the 2017 amendment effectively nullifying the legal heir rights.

Another such instance is where the famous Diana Talkies in Mumbai^[2], once a flourishing theatre caught up in the legal fire of the land being labelled as 'enemy property'. The theatre was managed by the F.E. Dinshaw Charities Trust, which was declared enemy property by the Government on the basis that one of its trustees had migrated to Pakistan during the Partition in 1947. The property, although under continued Indian management and functioning as a public entertainment venue, was subject to seizure by the Custodian of Enemy Property. The case brought forth complex legal arguments about whether a trust could be penalized for the affiliations of an individual trustee, especially when the trust itself continued to function lawfully within India. The Bombay High Court clarified that the State cannot exercise arbitrary power to classify assets as enemy property without proving continued ownership or benefit by an enemy national. The case, again, highlighted the dangers of overbroad application of the Act, showcasing how a well-intentioned law can have chilling effects on private property rights and legal certainty when not tempered by judicial oversight.

Similarly, the Noor-Us-Sabah Palace in Bhopal, formerly part of the royal estate of the Pataudi family was affected after Abida Sultan, daughter of Nawab Hamidullah Khan, moved to Pakistan. Her migration rendered a portion of the estate enemy property, despite her sister Sajida Sultan's Indian citizenship.

What is Enemy Property?

The concept of 'enemy property'^[3] is rooted in the national security concern of post-independent India. The EPA, 1968 was enacted to regulate the properties left behind by the individuals who migrated to Pakistan and China, acquiring their citizenship. The Act identified these individuals as 'enemy subjects'^[4] and vested their property rights in the hands of the Custodian on Enemy Property (CEPI)^[5].

Under Section 2(c) of EPA, 'enemy property' refers to both movable and immovable assets held or managed on behalf of the individuals who are now citizens of such enemy countries. The definition of property includes lands, houses, shares, bank balance, jewellery, and even tangible assets. These properties are legally frozen, meaning they cannot be inherited, sold, rented out, transferred, or claimed by anyone, including the Indian nationals who are the legal heirs of such individuals.

Initially, the Act was primarily meant as a temporary safeguard, especially during the Indo-Pak wars of 1965 and 1971 and the Sino-Indian war of 1962. However, the politicians see what they see, and just like the reservation system which too was initially meant for the first 10 years for the upliftment of the backward section of the society, the Act's implications have extended long after the cessation of the hostilities often impacting those who have no direct ties to the 'enemy' nation beyond lineage.

The intent of the Act was to protect the national interest and prevent the enemy country from benefitting from these assets. But, to date the Act has sparked debates about constitutional rights where Indian-born legal heir are denied their right to inherit their ancestral property and carry forward the lineage left behind by their forbearers.

Unprecedented Powers of CEPI?

The role of Custodian of Enemy Property for India evolved in 1968 from being a neutral administrator to a powerful state authority capable of overriding inheritance claims through the recent amendments made. While CEPI was established as a protective agency but successive amendments made have vastly expanded its powers.

A turning point came when Justice Ashok Bhan and Justice Altamas Kabir delivered a landmark judgment in 2005. In the case of Union of India v. Raja Mohammad Amir Mohammad Khan^[6], the Court held that the legal heirs residing in India could rightfully claim the properties left behind by the ancestors who migrated to the enemy countries, as long as they themselves remained Indian citizens. This judgment upheld the fundamental and constitutional guarantees of equality and property rights enshrined under Article 14^[7] and Article 300A^[8] respectively. Along with this, the judgment also upheld the individual legal identity of individuals distinct from their relatives' past choices or mistakes.

However, the progressive interpretation of the Act was nullified by the Enemy Property (Amendment and Validation) Act, 2017. This amendment prohibited the transfer of enemy property by way of sale, mortgage, gift, or will without explicit permission from the Central Government, barred civil Courts from entertaining disputes related to enemy property, retrospectively invalidated any past legal decisions or settlements that contradicted the amended Act and removed the rights of legal heirs, even if they were Indian citizens to claim enemy property once vested in the Custodian.

This amendment significantly tilted the balance of power in favour of the State, making the Custodian's role almost absolute, and transforming a trustee-like administrative body into a quasi-sovereign authority. It undermined earlier judicial protections and reinforced a doctrinal shift toward national security and fiscal control over private rights and family inheritance.

However, with the recent judgment passed by the Hon'ble Supreme Court of India, in the case of Lucknow Nagar Nigam v. Kohli Brothers Colour Lab (2024)^[9], Justices B.V. Nagarathna and Ujjal Bhuyan clarified that CEPI is not the owner of enemy property, but merely a trustee and administrator. The Court further clarified that vesting of property does not amount to transfer of ownership unless legal procedures for full encumbrance are followed. This interpretation suggests that CEPI's powers, while significant are not beyond any constitutional scrutiny.

Global Comparison

India's approach to enemy property under the EPA, 1968 particularly after its 2017 amendment, reflects a strict and state-centric stance on national security and property control. However, this strict hardline position contracts with the more balanced and nuanced frameworks, adopted in other democracies like the United States and the United Kingdom, where enemy property laws have evolved with greater sensitivity to individual inheritance rights.

United States

In the US, the Trading with the Enemy Act of 1917 allows the President to control trade and manage assets owned by enemy nationals during wartime through Alien Property Custodian. However, the Act does not impose a blanket prohibition on the inheritance of the property where the American Courts have upheld the rights of the individual to inherit or claim the enemy properties.

In the landmark case Clark v. Allen (1947)^[10], the Hon'ble Supreme Court of America ruled that inheriting property from an enemy alien is not unconstitutional, though such inheritance could be subjected to governmental restrictions during the war or conflict. This interpretation was reaffirmed in Propper v. Clark (1949)^[11] and Zittman v. McGrath (1951)^[12], where the Court acknowledged that the recovery of the properties left behind the enemies could be inherited by the legal heirs after wartime.

The role of the jurisprudence in this model safeguards the distinction between individual rights and state-level hostilities ensuring that citizenship and loyalty are judged by personal conduct and not through lineage.

United Kingdom

The UK's legal system follows a similar legal stance on the enemy properties under Trading with the Enemy Act, 1939, where during wartime enemy property can be confiscated citing the reasons for national security and placed under the control of Custodian of Enemy Property. However, the British Courts have consistently recognized the rights of domestic heirs to seek restitution or compensation after the conclusion of hostilities. Even before this Act became effective, in Re Liddell's Settlement Trusts (1936)^[13], the Court upheld the principle of succession, holding that enemy status does not automatically void the inheritance rights if the heir is not an enemy.

The British system, therefore, maintains a flexible mechanism for post-war justice, reflecting a belief that wartime confiscation should not result in permanent deprivation of property rights for heirs who remain loyal citizens of the United Kingdom.

India's Approach

In contrast, India's legal position particularly after the 2017 amendment to the EPA, 1968 embodies a maximalist position in the favour of state authorities. The amendment categorically extinguishes the inheritance rights of even Indian citizens if their ancestors migrated to Pakistan or China. This legal shift not only disallows inheritance but also nullifies any ongoing or previously settled legal claims, thereby closing all avenues of judicial remedy for affected families. By conflating enemy subjects with their descendants, India's framework imposes a generational penalty, which is not only unique in its severity but also widely criticized for lacking a clear constitutional rationale. Unlike the American and British models, which seek to balance national security with due process and individual rights, the Indian system emphasizes state sovereignty over personal inheritance claims, often to the detriment of justice and equity. This positions India as an outlier among democracies in its treatment of enemy property and invites broader debate about the long-term legitimacy of such uncompromising state control.

Political and Socioeconomic Consequences

The Enemy Property Act had a serious financial, emotional, and personal impact on the families whose ancestral assets are marked as 'enemy property', marking a permanent loss of heritage. Despite being citizens of India, they found themselves embroiled in a legal battle with little to no hope for success in reclaiming their ancestral properties. In a country where family inheritance is both a cultural and legal pillar, this denial of fundamental and constitutional rights leads to psychological and economic devastation.

At the core of this Act lies a complex constitutional question about the balance between sovereign authority and private property rights. On the one hand, where the Indian government is restraining the rights of these individuals as a national security concern, especially in the context of adversarial relations with Pakistan and China, whereas on the other hand, the government titled these properties as 'state resources' which can be of use particularly during the time of economic constraints. Indeed, in recent years, government has auctioned enemy properties to generate revenue, highlighting how economic imperative can shape legal narratives, essentially blurring the fine line between wartime necessities and peacetime opportunism. These complex dynamics highlights how the individual rights, merit, and loyalty have been neglected due to ancestral connections, contributing to marginalisation and deepened communal fault lines. As India strives to uphold constitutional and democratic ideals, it becomes imperative to reassess the legislation.

Views are personal.