AMICUS AI
Citation Codes
Neutral Citations
2010 INSC 48
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Section 18 of the Enemy Property Act, 1968
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section 5, Subsection 2 of the Enemy Property Act, 1968
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Cites
Cited by
Citation Codes
Neutral Citations
2010 INSC 48
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Section 18 of the Enemy Property Act, 1968
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section 5, Subsection 2 of the Enemy Property Act, 1968
Smart Summary

Factual and Procedural Background

The applicant, Raja Mohammed Amir Mohammad Khan (“Raja MAM Khan”), was declared by the Bombay High Court in 1977 to be the sole heir to the Estate of the Raja of Mahmudabad, whose properties had been taken over by the Custodian of Enemy Property under the Enemy Property Act, 1968. The Union of India challenged that decision in Civil Appeal No. 2501 of 2002. On 21 October 2005, the Supreme Court dismissed the appeal, confirmed the applicant’s title, and issued specific directions regarding possession of immovable properties and disbursement of rents collected after 5 April 2002.

In December 2007 the applicant obtained a ledger showing that Rs 1,77,38,828.11—rents collected before 5 April 2002—remained with the Custodian. The Custodian refused to release the sum, claiming no statutory power to refund enemy property proceeds. Consequently, the applicant filed IAs No. 47 & 48 of 2008 in the already-disposed contempt proceedings (Contempt Petition No. 87 of 2006 in Civil Appeal No. 2501 of 2002), seeking a direction for payment of the amount held by the Custodian.

Legal Issues Presented

  1. Whether, after disposal of Civil Appeal No. 2501 of 2002 and the associated contempt petition, the Supreme Court retained jurisdiction to entertain IAs No. 47 & 48 seeking substantive relief (i.e., release of Rs 1,77,38,828.11).
  2. Whether the Court’s judgment dated 21 October 2005 (2005 8 SCC 696) directed the Custodian to pay the applicant rents and profits collected before the status-quo order of 5 April 2002.
  3. Alternatively, whether Section 18 of the Enemy Property Act, 1968 mandated divestment of the said amount to the applicant without the need for separate civil proceedings.

Arguments of the Parties

Applicant (Raja MAM Khan)

  • The 2005 Supreme Court judgment implicitly covered all assets of the estate, including pre-5-April-2002 rents lying with the Custodian.
  • Section 18 of the Enemy Property Act permits the Central Government to divest enemy property back to the owner; morally and legally the Custodian should release the money.
  • Even if the term “mesne profits” was used, it encompasses all rents and profits, so the entire amount should be handed over without further litigation.

Union of India & Custodian of Enemy Property

  • The 2005 judgment expressly required the applicant to file a separate suit for mesne profits accrued before 5 April 2002 and limited immediate disbursement to post-5-April-2002 collections (already paid).
  • No explicit order exists directing payment of pre-5-April-2002 rents; if the Court intended such payment it would have said so.
  • The appeal and contempt petition are concluded; therefore, the Supreme Court is functus officio and lacks jurisdiction to grant new substantive relief through these IAs.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Raja Mohammed Amir Mohammad Khan v. Union of India, (2005) 8 SCC 696 Directions on possession of estate properties and disbursement of rents collected after 5-4-2002; requirement of a suit for earlier mesne profits. Treated as binding authority establishing a distinction between pre- and post-5-4-2002 collections; used to deny immediate release of Rs 1.77 crore to the applicant.

Court's Reasoning and Analysis

The Court undertook a textual analysis of its own 2005 judgment and found a “conscious distinction” between rents collected before and after 5 April 2002:

  • Post-5-April-2002 collections: The 2005 decision mandated disbursement to the applicant, and compliance has already occurred.
  • Pre-5-April-2002 collections: The judgment required the applicant to file a suit for recovery; the expression “mesne profits” was interpreted to encompass all monies collected during this period.

The Court rejected the applicant’s attempt to read the second part of the 2005 directions (“hand over possession of other properties”) as including pre-5-April-2002 rents. It clarified that the phrase referred solely to immovable properties.

On maintainability, while noting arguments that the Court was functus officio, the bench proceeded to decide the applications on merits and concluded that the relief sought contradicted its earlier definitive directions. Hence, the Court held that the appropriate forum for recovery remains the civil suit already instituted by the applicant.

Holding and Implications

IAs No. 47 and 48 of 2008 are DISMISSED.

Direct Effect: The applicant must pursue recovery of Rs 1,77,38,828.11 through the already-filed civil suit; the Custodian is under no present obligation to release the money. No order as to costs.

Broader Implications: The decision reinforces the finality of prior Supreme Court directions and underscores the requirement to respect procedural distinctions between concluded and fresh claims; it sets no new precedent beyond affirming the interpretive clarity of its 2005 judgment.

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    Union Of India And Another v. Raja Mohammed Amir Mohammad Khan (2) .

    Altamas Kabir, J.— These two IAs Nos. 47 and 48 of 2008 have been filed on behalf of the respondent in connection with Contempt Petition No. 87 of 2006 filed in Civil Appeal No. 2501 of 2002, inter alia, for a direction upon the Union of India, and the Custodian of Enemy Property to release to the respondent a sum of Rs 1,77,38,828.11, being held by the said Custodian on account of the Estate of the Raja of Mahmudabad.

    2. It may be recalled that in Writ Petition No. 1524 of 1977 filed by the applicant herein, Raja Mohammed Amir Mohammad Khan (“Raja MAM Khan”, for short), the Bombay High Court, while allowing the writ petition, had directed the return of the properties of the Raja of Mahmudabad to the applicant. The decision of the Bombay High Court was challenged by the Union of India in this Court in Civil Appeal No. 2501 of 2002, which was disposed of on 21-10-2005 (2005) 8 SCC 696, inter alia, with the following directions: (Raja Mohammed Amir (1) case (2005) 8 SCC 696)

    “33. The High Court had refused to grant the mesne profits to the respondent, against the aforesaid finding no appeal has been filed by the respondent. Since no appeal has been filed, the appellants are not entitled to the mesne profits till the passing of the interim orders of status quo by this Court on 5-4-2002. The respondent would be entitled to the actual mesne profits by filing a suit, if so advised, for this period. However, whatever monies have been collected by the appellants by way of rent or lease, etc. after 5-4-2002 till the handing over of the possession of these properties to the respondent be deposited/disbursed to the respondent within 8 weeks.
    34. The appellants are directed to get the buildings (residence or offices) vacated from such officers and hand over the possession to the respondent within eight weeks. Similarly, the appellants are directed to hand over the possession of other properties as well. The officers who are in occupation of the buildings for their residences or for their offices are also directed to immediately vacate and hand over the buildings or the properties to the Custodian to enable him to hand over the possession to the respondent in terms of the directions given. Failure to comply with the directions to hand over the possession within 8 weeks will constitute disobedience of this order and the appellants would be in contempt of this order. The respondent would be at liberty to move an application in this Court if the above directions are not complied with for taking appropriate action against the appellants or their agents. Since the appellants have retained the possession of the properties illegally and in a high-handed manner for 32 years, the appeal is dismissed with costs which are assessed at Rs 5 lakhs.”

    3. In IA No. 47 it has been stated that when the properties were taken over by the Custodian, the amounts due and payable by the various occupants were collected by the Office of the Custodian and credited to the account of the Estate of Mahmudabad in the ledger of the Custodian maintained in his office at Mumbai. In view of the judgments of the Bombay High Court and this Court, holding the applicant to be the sole legal heir and successor of the late Raja of Mahmudabad, he had succeeded to the properties belonging to the late Raja which had been taken over by the Custodian of Enemy Property under the provisions of the Enemy Property Act, 1968. It has further been contended that it could not, therefore, be disputed that the applicant is entitled to the monies standing to the credit of the Estate of Mahmudabad in the ledger account maintained by the Custodian of Enemy Property.

    4. According to the applicant, after continuous efforts, a copy of the ledger account was supplied to him in the month of December 2007, by the Office of the Custodian of Enemy Property and on perusal of the same it was discovered that a sum of Rs 1,77,38,828.11 stood credited to the account of the applicant as on 27-3-2002. On coming to know of the above, the applicant requested the Custodian by his letter dated 27-12-2007, to remit the amount which stood to his credit in the ledger maintained by the Office of the Custodian.

    5. As no response was received to the said letter, another letter was issued to the Custodian on 6-2-2008, and in his reply the said Custodian replied that there was no provision in the Enemy Property Act, 1968, to refund any amount received from enemy property. In response it was also indicated clearly that no amount was admissible to the applicant by way of refund. It is on account of such response from the Custodian of Enemy Property that IA No. 47 of 2008 was filed for the reliefs which are indicated in the prayer.

    6. Appearing for the applicant, Mr P.V Kapur, learned Senior Advocate, submitted that after the clear and unambiguous directions given by this Court in its judgment dated 21-10-2005 (2005) 8 SCC 696 in Civil Appeal No. 2501 of 2002, there could be no justification for the Custodian of Enemy Property to object to making over of the monies collected by him on account of rents and profits to the applicant. Mr Kapur submitted that the intent of the order of this Court was very clear that on being found to be the sole legal heir of the Raja of Mahmudabad, the applicant was entitled to his entire estate, which included all amounts which had been collected from the properties of the Estate and credited to the account of the Estate in the ledger maintained by the Office of the Custodian of Enemy Property.

    7. As an alternate submission Mr Kapur urged that in addition to the directions contained regarding disbursement to the applicant of the amount collected by the appellants by way of rent or lease after 5-4-2002 till the handing over of the possession of the properties to the applicant this Court had also directed the appellants to get the immovable properties of the Estate vacated and to hand over the possession of the same to the respondent applicant within 8 weeks. The appellants were also directed to hand over the possession of the other properties as well.

    (emphasis supplied)

    8. Mr Kapur submitted that under the general directions given by this Court in respect of properties belonging to the Estate of Mahmudabad, which included the amount held by the Custodian on account of rents collected from the Estate of the Raja of Mahmudabad prior to 5-4-2002, the said Custodian and the Union of India were bound to make over the said amount collected by the Custodian to the applicant.

    9. Resisting the application filed on behalf of the respondent Mr MAM Khan, the learned Additional Solicitor General, Ms Indira Jaising submitted that in view of the categorical direction given in the order of 21-10-2005 (2005) 8 SCC 696 passed by this Court, the question of making payment of the amount in question to the respondent did not arise. Ms Jaising submitted that this Court had recorded the fact that the High Court had refused to grant mesne profits to the appellants and against that decision no appeal had been filed by him. Consequently, the applicant was not entitled to the mesne profits till the passing of the interim order of status quo by this Court on 5-4-2002. In the said order this Court went on to say that the applicant would be entitled to the actual mesne profits for the period prior to the passing of the interim order of status quo by filing a suit. However, whatever monies that had been collected by the appellants by way of rents after 5-4-2002 till the handing over of the possession of the properties to the applicant, should be deposited/disbursed to the respondent within 8 weeks.

    10. Ms Jaising submitted that the rents collected from the said properties after 5-4-2002 till the handing over of the possession of the properties to the applicant, had already been disbursed to him as directed. However, since other than the directions for recovery of mesne profits for the period prior to 5-4-2002 no other direction had been given by this Court for disbursement of the rents and profits from the said Estate prior to 5-4-2002, the claim of the applicant was misconceived. Ms Jaising contended that if it had been the intention of this Court that the applicant would be entitled even to the rents and profits prior to 5-4-2002, then it would have given a clear direction for payment of the entire amount to the applicant.

    11. As to the alternate submission of Mr Kapur, the learned ASG urged that in view of what has been stated hereinabove, it could not have been the intention of this Court to release the entire sum of Rs 1,77,38,828.11 being the amount of the rents and profits collected from the Estate of the Raja prior to 5-4-2002. Ms Jaising submitted that the claim of the applicant was misconceived in view of the directions contained in the judgment of this Court dated 21-10-2005 (2005) 8 SCC 696.

    12. In addition to her aforesaid submissions, Ms Jaising also urged that neither of the two applications were maintainable since the appeal and the contempt petition in which they have been filed have already been disposed of earlier. Ms Jaising submitted that having disposed of the appeal and the contempt petition, this Court had become functus officio and was bereft of jurisdiction for passing orders on the said two applications which are not in the nature of consequential reliefs being claimed from the disposed of matters but substantive applications raising substantial claims, dehors the reliefs prayed for in the appeal and the contempt petition. Ms Jaising referred to various decisions on the question of the maintainability of applications filed in concluded proceedings, which we may refer to if it becomes necessary to do so.

    13. Replying to Ms Jaising's submissions, Mr Kapur submitted that the answer to the question as to what is to be done in regard to the rents and profits collected prior to 5-4-2002, is clearly provided in Section 18 of the Enemy Property Act, 1968, which provides that the Central Government may 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 specified in the direction and thereupon such property shall cease to vest in the Custodian and shall re-vest in such owner or other person. It was submitted that there was neither any legal nor moral justification for the Custodian to hold on the said amount lying to the credit of the Estate of the Raja of Mahmudabad which had devolved upon the applicant as held by the Bombay High Court and confirmed by this Court.

    14. On a careful consideration of the submissions made on behalf of the respective parties, we are of the view that a conscious distinction with regard to the rents and profits collected from the Estate of the Raja of Mahmudabad prior to 5-4-2002 and thereafter, had been made by this Court while disposing of Civil Appeal No. 2501 of 2002 on 21-10-2005 (2005) 8 SCC 696. It was clearly the intention of the Court that in respect of rents and profits collected after the order of status quo passed on 5-4-2002, the same were to be made over by the Custodian to the applicant, but as far as the rents and profits collected prior to that date were concerned, the applicant would be required to file a suit to recover the same. We have been informed that, in fact, such a suit has been filed by the applicant and the same is pending decision.

    15. Notwithstanding the use of the expression “mesne profits” in the first part of the directions given by this Court, what was intended was that all rents and profits collected in respect of the Estate of the Raja of Mahmudabad prior to the order of status quo passed on 5-4-2002, would have to be treated separately and not with the other collections made from the Estate. The use of the expression “mesne profits”, in our view, would cover all the monies received by the Custodian for the period prior to 5-4-2002, and would, thereafter, be covered by the aforesaid order of this Court directing the appellants to release to the respondent the sum of Rs 1,77,38,828.11 held by the Custodian to the credit of the Estate of the Raja of Mahmudabad.

    16. The interpretation sought to be given to the second part of this Court's order extracted above, will not include handing over of possession of the rents and profits prior to 5-4-2002, which had been excluded in the previous paragraph of the judgment of this Court. In our view, the directions given to the appellants to hand over the possession of other properties, mentioned in the second part of the order extracted hereinabove, relates to the immovable properties of the Estate and not to the rents and profits collected by the Custodian from the Estate prior to 5-4-2002.

    17. The two sets of properties are dealt with separately and are on two different settings. Mr Kapur's attempt to include both the movable and immovable properties of the Estate of the Raja of Mahmudabad is misconceived and is not acceptable. Since the amount recorded in the Custodian's ledger as being credited to the Estate of the Raja of Mahmudabad represents the collections made from the Estate prior to the order of status quo passed on 5-4-2002, the respondent has been given leave to recover the same by filing a suit. In view of the said order passed by this Court, it can no longer be argued that the directions to make over the possession of other properties to the applicant also included the rents and profits collected from the estate prior to 5-4-2002.

    18. We are not, therefore, inclined to allow IAs Nos. 47 and 48, which are, accordingly, dismissed. The applicant will be free to pursue his claim for the said amount of Rs 1,77,38,828.11 before the civil court.

    19. There will, however, be no order as to costs.

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    Comments

    Union Of India And Another v. Raja Mohammed Amir Mohammad Khan (2) .
    (Jan 19, 2010)