Govt sets the ball rolling to settle controversial assets

The controversy over "enemy property" worth over Rs 10,000 crore that the Indian government has held since the 1971 Indo-Pak war appears to be nearing a solution with the issue shifted from the commerce ministry to home affairs for a speedy settlement of the assets.

The enemy property (including blue-chip shares) came into government custody after several people fled the country during the Indo-Pak war, leaving their moveable and immovable assets in India, and accepted either Pakistani or Bangladeshi citizenship.

The commerce ministry had entrusted these properties to a custodian, appointed under the Enemy Property Act, 1968, and the Defence of India Rules, 1962.

Despite examining the issue for over three-and-a-half decades, the commerce ministry under successive governments could not achieve a breakthrough in settling the cases.

Dinesh Singh, the current custodian, said: "Several claims have been made in the past 37 years, but circumstances have almost made it impossible to ascertain their authenticity. Also, those claiming to have bought these properties without our consent years ago would require a no-objection certificate from us."

Sources said failure to resolve this problem is resulting in huge sums of money being spent on the administration and preservation of these properties as several are bound up in legal proceedings "" 1,345 income tax cases, 231 declared cases, 1,011 process cases and 356 court cases.

Home affairs officials said Home Minister Shivraj Patil would soon set up a committee to look into the matter.

The custodian currently manages 2,943 immovable properties (land and buildings), and moveable properties like shares, securities, debentures, bank balances, fixed deposits and other sums lying in so-called "enemy" nationals' bank accounts, provident funds and the like.

The custodian also manages some assets and properties of two banks "" Habib Bank and National Bank of Pakistan.

Apart from certain real estate hot spots, the custodian holds shares of over nearly 600 listed and unlisted Indian firms valued at over Rs 5,000 crore.

These companies include Wipro, Tata Steel, Tata Power, Tata Chemical, Tata Coffee, Tata Engineering, Nelco Unit Trust of India schemes, Shaw Wallace, United Beveries, Birla Corporation, Grasim Industries, ACC, India Cement, Digvijay Cement, Hindustan Lever, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, NEPA Mills, Poddar Mills, Kohinoor Mills, Phoenix Mills, J K Synthetics, Cipla, Ashok Leyland and BSES (now Reliance Energy), among others.

The identity of most shareholders is unknown even to most of the companies concerned since records could not be updated.

Incidentally, a similar enemy property Act was passed by the Pakistani government and the properties of those who left Pakistan to settle in India were confiscated.

A few years ago the ministry of external affairs said Pakistan had auctioned property over Rs 300 crore belonging to Indian nationals without issuing any kind of notices or messages.