Forbes India 15th Anniversary Special

Explained: What is enemy property and its selling by the government

Uttar Pradesh has the highest number of them, followed by West Bengal. The government plans to sell the share held in 84 companies and has invited bids for 1.88 lakh sales of shares of 20 firms in the first round

Fazal Rahim
Published: Jan 18, 2024 02:04:58 PM IST
Updated: Jan 18, 2024 02:15:37 PM IST

Explained: What is enemy property and its selling by the governmentThe Enemy Property Act came into effect in the aftermath of the Indo-China and Indo-Pak wars in 1962 and 1965. Image: Shutterstock
 
The government plans to sell the enemy property share held in 84 companies. According to a recent notification by the Department of Investment and Public Asset Management, Ministry of Finance, there are about 2.91 lakh enemy property shares in these 84 companies. The government intends to sell the shares in tranches and has invited bids for 1.88 lakh sales of shares of 20 companies.

The significant companies whose shares are up for sale in the first round include Mohan Meakin Ltd, Bharat Nidhi Ltd, The Peerless General Finance & Investment Co Ltd, and Spencer and Co Ltd.

As per the notification, 10 categories of buyers, including individuals, Qualified Institutional Buyers, NRIs, Hindu Undivided Families, trusts and companies, can buy these shares. SBI Caps is the selling broker and merchant banker for the sale of these shares. So far, these shares were managed by the Custodian of Enemy Property of India (CEPI).

What is Enemy Property?

Enemy property is property left behind by the people who migrated to enemy countries. The Enemy Property Act 1968, revised in 2017, defines an enemy property as a property ‘belonging to or held or managed on behalf of an enemy, an enemy subject or an enemy firm’.

The Enemy Property Act came into effect in the aftermath of the Indo-China and Indo-Pak wars in 1962 and 1965. The Act ruled that the heirs of people who migrated to Pakistan and China would not have any right to succession over the property left by their ancestors. After the Act, CEPI took over these properties and has been managing them since then.

Also read: More people are buying ultra luxury homes in India. Here's why

Apart from the company shares, most enemy property is in the form of land and buildings. As per CEPI, there are 13,252 enemy properties in India, valued at over Rs1 lakh crore. Most of these properties belong to people who migrated to Pakistan, and over 100 to those who migrated to China.

Uttar Pradesh (5,982) has the highest number of enemy properties, followed by West Bengal (4,354). The central government launched a survey in the past year to further identify and monetise these properties. Many of these properties have gone under encroachment and unauthorised occupancy.