Cabinet approves Laying down procedure and mechanism for sale of enemy shares

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Context:

  • The Union Cabinet has approved the mechanism and procedure for sale of the enemy shares.
  • ‘In principle’ approval has been accorded for sale of enemy shares under the Custody of Ministry of Home Affairs/ Custodian of Enemy Property of India (CEPI), section 8A of the Enemy Property Act, 1968.
  • Department of Investment and Public Asset Management have been authorized under the provisions of subsection 7 of section 8A of the Enemy Property Act, 1968, to sell the same.
  • Sale proceeds are to be deposited as disinvestment proceeds in the Government Account maintained by Ministry of Finance.
  • The CEPI shall certify that the sale of the Enemy Shares is not in contravention of any judgment, decree or order of any court, tribunal or other authority or any law for the time being in force and can be disposed off by the Government.

The Enemy Property Act, 1968:

  • The Enemy Property Act, 1968 provides for continued vesting of enemy property vested in the Custodian of Enemy Property of India (CEPI) under the Defence of India Rules, 1962 and the Defence of India Rules, 1971.
  • In the Act of 1968, the definition of “enemy” was as follows: “enemy” or “enemy subject” or “enemy firm” means a person or country who or which was an enemy, an enemy subject or an enemy firm, as the case may be, under the Defence of India Act and Rules, but does not include a citizen of India.
  • In the amendment of 2017, this was substituted by “…. including his legal heir or successor, whether or not the citizen of India or the citizen of a country which is not an enemy or the enemy….. who has changed his nationality”?

Impact

  • The decision will lead to monetization of enemy shares that had been lying dormant for decades since coming into force and the Enemy Property Act in 1968.
  • With the amendment of 2017, an enabling legislative provision was created for the disposal of enemy property.
  • With the approval, now, of the procedure and mechanism for sale of enemy shares, an enabling framework has been institutionalized for their sale.
  • The decision will lead to monetization of movable enemy property lying dormant for decades.
  • Sale proceeds from this may be used for development and social welfare programmes.

About Enemy Property amendment 2017

  • According to amendment, as in subsection 7 of section 8A of the Enemy Property Act, 1968.
  • Central Government may direct that disposal of enemy property shall be made by any other authority or Ministry or Department instead of Custodian.

Source:PIB