 the enemy pr01:erry bill, 1968 (ka be/as iqtroduced in lok sabb8)1 page 2, line 32,-n:tter it areal! " ii j 2 page 4, line 1 9, -tor "to take" ~ "talce" , ?age 6, line 1,-n£ "requires" ~ "require" page 7, line 2, !2l: k act" ~ " aot" page 7, line 6,-fo; "person" e2!s "persons" 6 - page 11, line 1,-insert "_" j after "may bett new delhi; jhl;[ 2', 1968  the enemy property bill, 1968 arrangement of clauses clauses1 short title, extent, application and commencement 2 definitions 3 appointment of custodian of enemy property for india and deputy custodian, etc 4 appointment of inspectors of enemy property 5 property vested in the custodian of enemy property for india under the defence of india rules, 1962 to continue to vest in the custodian 6 transfer of property veste'd in custodian by enemy or enemy subject or enemy· firm 7 payment to custodian of money otherwise payable to an enemy, enemy subject or enemy firm b powers of custodian in respect of enemy property vested in him  9 exemption from attachment, etc 10 transfer of securities belonging to an enemy 11 power of custodian to summon persons and call for documents 12 protection for complying with orders of custodian 13 validity of action taken in pursuance of ortiers of custodian 14: proceedings against companies whose assets vest in custodian 15 returns as to enemy property 16 registers of returns 17 levy of fees lb divesting of enemy property vested in the custodian 19 protection of action taken under the act 20 penalty 21 offences by companies 22 effect of laws inconsistent with the act 23 power to make rules 24 certain orders made under the defence of ih'dia rules, 1982, to continue in force 25 repeal and saving  billto provide for the continued vesting of enemy property vested in the custodian of ene-rny property for indjia under the defence of india rules, 1962, cmd for matters connected therewith be it enacted by parliament in the nineteenth year of the republic of intfia as follows:-1 (1) this act may be called the enemy property act, 1968 short (2) it extends to the whole of india except the state of jammu ~!~ e:-_ 5 and kashmir and it applies also to all citizens of india outside india plicati! and to branches and agencies outsitfe india of companies or bodies and comcorporate registered or incorporated in india mencement (3) it shall be deemed to have; come into force on the 10th day of july, 1968 2 in this act, unless the context otherwise requires,-definitionl (a) "custodian" means the custodian of enemy property for india appointed or deemed to have been appointed under section 3 and includes a deputy custodian anti an assistant custodian of enemy property appointed or deemed to have been s appointed under that section; (b) "enemy" or "enemy subject" or "enemy firm" means a person or country who or which was an enemy, an enemy subject or an enemy finn, as the case may be, under the defence of intiia act, 1962, and the defence of india rules, 1962, but does 10 51 of 1962 not include a citizen of india; (c) "enemy property" means any property for the time being belonging to or held or managed on behalf of an enemy, an enemy subject or an enemy firm: provided that where an individual enemy subject dies in is the territories to which this act extends, any property which immetiiately before his death, belonged to or was held by him  or was managed on his behalf, may, notwithstanding his death, continue to be regarded as enemy property for the purposes of this act; ao (d) "prescribed" means prescribed by rules made under this act  provided that the custodian of enemy property for india and any deputy; custodian or assistant custodian of enemy property appointed under the defence of india rules, 1962, shan be deemed to have been appointed under this sedion 30 appoint-3 'the central government may, by notification in the of1iclal ment of gazette, appoint a custodian or enemy property for india and one cll!todian or more deputy custodians and assistant custndians of enemy pro- 25 of enemy, perty for such local areas as mlay be specified in the notifieation: property for india anddeputycu!!-todian, etc 4 the central government may, either generally or for any partieular area by notification in the ofiicial gazette, appoint one or more inspectors of enemy property for securing complia~e with the provisions of this act add may, by general or speclal order, provide for the distribution and allocation of the work to be performed 35 by them for securing sueh eolllpi~: appointmentof inspectors of enemy property  provided that every idspector of edejny firms appointed under the defeace of india rules, 1962, shall be deemed to be an inspector of enemy property appointed under this section51 of 1962 s 5 notwithstanding the expiration of the defence of india act, property 1962 and the defence of india rules, 1962, all enemy property vested vested in before such expiration in the custodian of enemy property for india the cusappointed under the said rules and continuing to vest in him imme-=-of diately before the commencement of this act, shall, as from such property commencement, vest in the custodian for inc:uaujlderthe defence of indi'a rules, 196211 continue toveet in the custodian 10 6 where any property vested in the custodian under this act tramfer has been transferred, whether before or after the commencement of of prothis act, by an enemy or an enemy subject or an enemy firm and pe~ where it appears to the central government that such transfer is ~too:n injurious to the public interest or was made with a view to evatling by enemy 15 or defeating the vesting of the property in the custodian, then, the or enemy central government may, after giving a reasonable opportunity to subject the transferee to be heard in the matter, by order, declare such::emy transfer to be void and on the making of such order, the property shall continue to vest or be 'deemed to vest in the custodian 20 7 (1) any sum payable by way of dividend, interest, share payment profits or otherwise to or for th~ benefit of an enemy or an enemy to ~­subject or an enemy firm shall unless otherwise ordered by the t~lryj of   money central government, be paid by the person by whom such sum would otherwise have been payable but for the prohibition under the defence of india payable ~5 rules, 1962, to the custodian or such person as may be authorised to an by him in this behalf and shall be held by the custodian or such enemy, person subject to the provisions of this act enb~ecty au ~ or (2) in cases in which money would but for the prohibition under ~y the defence of india rules, 1962 be payable in a foreign currency 30 to or for the benefit of an enemy or an enemy subject or an enemy firm (other than cases in which money is payable under a contract in which provision is made for a specified rate of qxchange), the payment shall be made to the custodian in rupee currency at the middle official rate of exchange fixed by the reserve bank of india on the date on which the payment became due to that enemy, enemy subject or enemy firm (3) the custodian shall, subject to the provisions of section 8, deal with any money paitl to him under the defence of india ,rules, , 1962 or untler this act and any property vested in him under this act in such manner as the central government may direct 8 (1) with respect to the property vested in the custodian under this act, the custotiian may take or authorise the taking of suc~ po!we, oteu todi_ iarespeet otedcl7 p!'op8'l'flj' ~1a hijil measur~ as he considers necessary or expedient for preserving such 10 property and where such property belongs to an individual enemy subject, may incur such expenditure out of the property as he considers necessary or expedient for the maintenance of that individual or of his family in india (2) without prejudice to the generality of the foregoing provi- is sion, the custodian or such person' as may be specifically authorised by him in this behalf, may, for the said purpose,-(i) carry on the business of the enemy; (ii) to take action for recovering any money due to the eremy; 20 (iii) make any contract anti execute any document in the name and on behalf of the enemy; (i,11) institute, defend or continue any suit or other legal proceeding, refer any dispute to arbitration and compromise any debts, claims or liabilhies; 2$ (v) raise on the security o! the property such loans as may be necessary; (vi) incur out of the property any expenditure including  the payment of any taxes, tluties, cesses and rates to govern-" ment or to any local authority and of any wages, salaries, pen- 30 sions, provident fund contributions to, or in respect of, any employee of the enemy and the repayment of any debts due by the enemy to persons other than enemies; (vii) transfer by way of sale, mortgage or lease or otherwise dispose of any of the properties; 3s (viii) invest any moneys held by him on behalf of en!mies for the purchase of treasury bills or such other government liequrities as may be approved by the central government for the purpose; (ix) make payments to the enemy anti his dependents; (x) make payments on behalf of th-e enemy to persons othel' 5 than those who are enemies, of dues outstanding on the ~ october, 1962; and (:ti) maire such other payments out of the fun'ds of the enenty as may be directed by the central government ea:planation-in this sub-section and in sections 10 and 17, [0 "enemy" includes an enemy subject anti an enemy firm 9 all enemy property vested in the custodian under this act kempshall be exempt from attachment, seizure or sale in execution of tion decree of a civil court or orders of any otlrer authority from at· tad1imbt, etc 10 (1) where, in exercise of the powers conferred by section tr,uldtr is 8, the custodian proposes to sell any security issued by a company cit hou-and belonging to an enemy, the company may, with the consent = of the custodian, purchase the securities, notwithstanding anything an enemy to the contrary in any law or in any regulations of the company and any securities so purchased may ·be re-issued by the company 20 as and when it thinks fit so to do (2) where the custodian executes and transfers any securities issued by a company, the company shall, on receipt of the transfer and an order in this behalf from the custodian, register the securities in the name of th'e transferee, notwithstanding that the regu-25 lations of the company do not permit such registration in the absence of the certificate, script or other evidence of title relating to th'e -securities transferred: provided that any such registration shall be without prejudice to any lien or charge in favour of the company and to any other 30 lien or cbarge of which the custodian gives express notice to the company ezpzanatiorl-in this section, "securities" includes shares, stocks, bonds, debentures and debenture stock but does not incl11de bill of exchange 11 (1) the custodian may, by notice in writing, requires any person whom he ,believes to be capabl'e of giving information concerning any enemy property to attend before him at such time and place as may be specified in the notice and examine any such person concerning the same, reduce his statement to writing and require 5 him to sign it  poweroi  custodian to summonperliohs_nd oallfor documents (2) the custodian may, by notice in writing, require any person whom he believes to have in his possession or control any account book, letter book, invoice, receipt or other document of whatever nature relating to any enemy property, to produce the same or cause 10 the same to be produc'ed ,before the custodian at such time and place as may be specified in the notice and to submit the same to his examination and to allow copies of any entry therein or any part thereof to be taken by him protectionfor' complyingwith ordel'8ot custodian 12 where any order with respect to any money or property is is addressed to any person ,by the custodian and accompanied by a certificate of the custodian that the money or property is money or property vested in him under this act, the certificate shall be 'evidence of the facts stated therein and if that person complies with the orders of the custodian, he shall not be liabl'e to any suit or 20 other legal proceeding by reason only of such compliance 13 where under this act,-(a) any money is paid to the custodian; or validity otaction taken in pursuanceot ordersot cust0-dian (b)· any property is vested in the custodian or an order is given to any person by the custodian in relation to any pro- 2s perty which appears to the custodian to be enemy property vested in him under this act, neither the payment, vesting nor order of the custodian nor any proceedings in consequence thereof shall be invalidated or affected by reason only that at a material time,-30 (i) some person who was or might have been interested in the money or property, and who was an enemy or an en"emy firm, had died or had ceased to be an enemy or an enemy firm; or (ii) some person who was so interested and who was be-1iev'ed by the custodian to be an enemy or an enemy firm, was 3s not an enemy or an enemy firm 1 of 1956 14 where the enemy property vest'ed in the custodian under proceedthis act consists of assets of a company, no proceeding, civil or cri- inp minai, shall be instituted under the companies act, 1956, against ,atnat the company or any director, manager or other oftlcer thereof ex- companieiwh u o •• , cept with the consent in writing of the custodian leta ve8t incuatodian 15 (1) the custodian may call for from person who, in his returns opinion, have any interest in, or control over, any 'enemy property  , vested in him under this act, such returns as may ibe prescribed eumy pro-(2) every person from whom a return is called for under sub- perty 10 section (1) shall be bound to submit such return within the prescrib'ed period  16 (1) all returns relating to enemy property submitted to the reals-custodian under this act shall be recorded in such registers as may terti of re urns be prescribed j$ (2) all such registers shall be open to inspection subject to the payment of such fees as may be prescribed and to such reasonable restrictions as the custodian may impose, to any person who, in the opinion of the custodian, is interested in any particular e-nemy property as a creditor or otherwise and any such person may also 20 obtain a copy of the relevant portion from the registers on payment of the prescribed fees 17 (1) there shall be levied by the custodian fees equal to two levyot per centum oftees (a) the amount of moneys paid to him; (b) the proceeds of the sale or transfer of any property which has ~ vested in him under this act; and (c) the value of the residual property, if any, at the time of its transfer to the original owner or other person specified by the central government under section 18: 30 provided that in the case of an enemy whose property is allowed by the custodian to be managed by some person specially authorired in that ,behalf, there shall be levied a fee of two per centum of the gross income of the enemy or such less fee as may be specifically fixed by the central government after taking into consideration thec08t of direct management incurred by that government, the c~ of 'superior supervision and any risks that may be incurred by -that 'govemment in respect of the management: provide'd further that the central government may, for reasons s to be recorded in writing, reduce or remit the fees leviable under this sub-section in any special cage or class of cases, explanation,-in this sub-section "gross income of the enemy" means income derived out of the properties of the enemy vested in the custodian under this act 10 (2) the value of any property for the purpose of assessing the fees shall be the prioe which, in the opinion of the central government or of an authority empowered in this behalf by the central government, such property would fetch if sold in the open market (3) the fees in respect of property may be levied out of any is proceeds of the sale or transfer thereof or out of any income accrued therefrom or out of any other property belonging to the same enemy and vested in the custodian under this act (4) the fees levied under this section shall be credited to the centr&1 'governmpnt, ao divesting of enemy property vested in the custooian, 18 the central government mry, by general or special order, direct that any enemy property vested in the custodian under this act and remaining with him shall be divested from him and be returned, in ,such manner as may be prescribed, to the owner thereof or to such "other person as may be specifted' in the direction and 2s thereupon such property shall cease to vest in the custodian and 'shall rev'est in such owner or other person 19 no suit, prosecution or other legal proceeding shall lie against the central government or the custodian or an inspector of enemy property for anything which is in ~ood faith done or intended 'q protection of action taken under ~o  be done under this act ~be act, 20 (1) if any ~rson makes any payment in contravention of ,penalt)t the provisions of sub-section (1) of section 7, he shall be punishable with imprisonment for a term which may extend to six months, or with fine, or with both and the payment or dealing shall be void 5 (2) if any person contravenes the provisions of sub-section (2) of section 10, he shall be punishable with imprisonment for a term which may extend to six months, or with fine, qr with, both~: (3) if any person fails to comply with a requisition made by the custodian under sub-section (1) or sub-section (2) of section 11, 10 he shall be punishable with fine which may extend to five hundred ' rupees (4) if any person fails to submit the return under sub-section (2) of section 15, or furnishes such return containing any particular which is false and which he knows to be false or does not believe 15 to be true, he shall be punishable with fine which may extend to fiw hundred rupees 21 (l) where an oftence under this act has been committed offences by a company, every person who, at the time the offenoe wu com- 'bycom mitted, was in charge of, and was respons~ble to, the company for paniee 20 the conduct of the business of the company as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punishetl accordingly: provided that nothing contained in this sub-section shall re'nder any such person liable to any punishment, if he proves that the 25 offence was committed without his knowledge or that he eurc'ioreci all due diligence to prevent the commission of such offence (2) notwithstanding anything contained; in sub-t;ection (1), w here an oftence under this act has been committed by ~ company and it is proved that the offence has been committ'ed ' with 30 the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other oftlcer of the company, such director, manager, secretary or other pfticer shall also be deemed to be guilty of that offence and shau~:liaweto be proc'eeded against and punished accordingly ,txpianation-for the purposes of this sectioh,  (4) "'company" means any body corporate and includea a firm or other association of individuals; and (b) "director", in relation to a firm, means a partner in the firm  effect of lawllnconsistent with the act22 the provisions of this act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force --23 (1) the central government may make rules for carrying out the purposes of this act 10  power to make jiulea(2) without prejudice to the generality of the foregoing power, such rules may provide for-(a) the returns that may be called for by the custodian under sub-section (1) of section 15 and the period within which such returns shall be submitted under sub-section (2) of that is sectiod; (b) the registers in which the returns relating to enemy prop'erty shall be recorded under section 16; (c) the fees for the inspection of registers and for obtaining copies of the relevant portions from the registers under 20 sub-section (2) of section 16; (d) the manner in which enemy property vested in the custodian may be returned under section 18; (e) any other matter which has to be or may be prescribed (3) every rule macre by the central government under this sec  2s tiol'l shall be laid, as soon as may be after it is made, before each house of parliament while it is in session for a total period of thirty days which may be comprised in one session or iil two successive sessions an'd if, before the expiry of the session in which it is so laid or the session immediately following, both houses ~gree so in making any modification in the rule or both houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be so, however, that any such modification or annulment shall be with- o~t prejudice to the validity of anything previously done under that ruje s 24 every order which was made under the defence of india certain rules, 1962, ,by the central government or by the custodian of orden enemy property for indi~ appoint~ under those rules, relating to :d~,: el!emy property and which was in force immediately before the defence expiration thereof shall, in so far as such order is not fneomlstent ofindili 10 with thp provisions of this act, be deemed to continue in foree and rulel, to havp been made under this act 1~~0 (loftuuue in force 7 of 1968 %5 (1) the enemy property ordinance, 1968, is hereby repealed· repeal and8m'-(2) notwithstanding such repeal, anything done or any 'action ing taken under the said ordinance shall be deemed to have been done i s or taken under the corresponding provisions of this act consequent on the chinese aggression in 1962, immovable prope~es,casb );,alance:; and 1lrms belonging to the chinese' nationals in india valued:~ppro;x:imately at rs 2885 lakhs were'vested in the 'tui~dian of eneiny property for india appointed under the de-  fe  ~ of india rules, 1962 similarly, consequent on the asifession, by ji»aki4~ in, 1965, i~vable and some specified movablepa,k- istani properties in india, the total value of which has been approxi:-mately estimated at rs 27 crores, were vested in the said custodian of enemy property these vestments were made under the  pqwers derived from the defence of india rules, 1962 these j?ro-: r, perties were being administered by the custodian of enemy property for :ln4ia, ~accon:lance with the provisions of the deflence of india &lej, 1962 and the orders made thereunder, the proclamation of emergency was revoked with effect from the 10th january, 1968 and consequently the powers under the defence of india act, 1962 and the rules made thereunder were to remain in force only for a period of six months thereafter, ie up to 10th july, 1968 it was, therefore, thought necessary to have fresh legal authority with effect from that date (10th july, 1968) for the administration of the chinese and pakistani properties referred to above which are already vested in the custodian of enemy property, for india the management of the said properties by the custodian of enemy property for india has to continue, as it has not been possible for the government of india so far to arrive at a settlement with the governments of those countries as parliament was not in session and as the situation called for immediate action, an ordinance called 'the enemy property ordinance 1968 (7 of 1968)' was promulgated by the president on the 6th july 1968 the present bill seeks to replace the aforesaid ordinance ;;~, nor delhi; dinesh singh the 10th july, 1968  president's recommendation under article 117 of the constitution of india[copy of letter no 12(27) /67-epty,'clated the 17th july, 1968 from shri dill'esh singh, minister of commerce to the secretary, tok sabha] -   the president having been informed of the subj~t matter ·ofthe -enemy pr()perty bill, 1968, recommends' under articles 117(1) and 117 (3) of the constitution of india, theintroductton and consftleration of the bill in the monsoon session of the lok sabha  financial memorandumclause 3 of the bill provides for the appolntm'ent of custodian of enemy property for india, deputy custodians and assistant custodians of enemy property clause 4 of the bill provl~es for the appointment of inspectors of enemy firms the annual expenditure on the already existing establishment of the office of the custodian of enemy property is about ra 67 ,boo this amount of rs 67,800 will continue to be incurred annually there will be no non-recurring expenditure  memorandum regarding delegated legislationclause 23 of the bill empowers the central government to make rules for carrying out the purposes of the proposed enactment· the various matters in relation to which such rules may be made have been detailed in the various items of sub-clause (2) of that clause and relate mainly to the returns that may be called for by the custodian, the registers in which thf' returns relating to enemy property shah be recorded, the fees for the inspection of registers and (or obtaining copies of the relevant portions from the registers and the manner in which enemy property vested in the custodian may be returned to the owner thereof these are matters of administrative detail and it is di1fjcujt to provide for au these matters in the biu itself the delegation of legislative power is, therefore, of a normal character a bill to prov ide 10r the ~onlinuc:d vesting of enemy property vested in the custodian of enemy property for india under the defence of india rules, 1962, and for maners connected therewith (shri dinesh singh, minister of commerce) 