Supreme Court Upholds Custodian's Declaration in Evacuee Property Matter Based on Pre-1949 Asset Transfer to Pakistan. The Court Held That Section 22(b) of the Administration of Evacuee Property Act, 1950 Did Not Violate Article 14 of the Constitution and That Transfer of Substantial Portion of Assets Before Declaration as Intending Evacuee Constituted Preparation for Migration.

Civil appellate and writ petition challenging the declaration of property as evacuee property under Section 22(b) of the Administration of Evacuee Property Act, 1950 and the constitutional validity of that provision under Article 14 of the Constitution.

The appellant sought to quash the order under Section 22(b) declaring his property as evacuee property and to obtain a writ of certiorari or mandamus under Article 32 of the Constitution, challenging the validity of Section 22(b).

The Deputy Custodian declared the appellant as an intending evacuee and his property as evacuee property on the ground that he had transferred a substantial portion of his assets to Pakistan between November 1947 and September 1948; the appellant challenged the declaration and the constitutionality of Section 22(b).

The Deputy Custodian, Jaipur on November 16, 1951 held the appellant to be an evacuee under Section 2(d)(iii) of the Ordinance and declared his property evacuee under Section 7 of the Ordinance and Section 22(b) of the Act. The District Judge, Jaipur set aside both declarations, holding that the transfer of substantial assets was established but other circumstances including conduct after October 18, 1949 had to be considered. The Deputy Custodian-General made a reference under Section 27(2) to the High Court of Rajasthan. The High Court rejected the appellant's contention that the transfer must be after the declaration as intending evacuee, held that the transfer of substantial assets before October 18, 1949 constituted preparation for migration, set aside the District Judge's order on Section 22(b), and directed disposal accordingly. The Deputy Custodian-General on August 10, 1957 held that the property was rightly declared evacuee under Section 22(b).

Whether Section 22(b) of the Administration of Evacuee Property Act, 1950 contravened Article 14 of the Constitution by discriminating between persons who transferred assets to Pakistan before and after October 18, 1949, particularly regarding the denial of restoration under Section 16 and compensation under Section 13 to the earlier group. Whether the circumstance of transfer of a substantial portion of assets should relate to an act done after the person was declared an intending evacuee for the purpose of Section 22(b).

The appellant argued that Section 22(b) violated Article 14 because persons who transferred assets after October 18, 1949 as evacuees under Section 2(d)(iv) were entitled to restoration under Section 16 and compensation under Section 13 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954, whereas persons who transferred assets between August 14, 1947 and October 18, 1949 as intending evacuees were denied these benefits despite doing practically the same act. The appellant further contended that the circumstances as to transfer of a substantial portion of assets should relate to an act done after the person was declared as an intending evacuee. The respondents submitted that the two groups were not similarly circumstanced due to the different political conditions before and after October 18, 1949, and that the transfer of substantial assets itself constituted preparation for migration regardless of when the declaration as intending evacuee was made.

Section 22(b) of the Administration of Evacuee Property Act, 1950 is constitutionally valid under Article 14. Persons who transferred assets to Pakistan during the period from August 14, 1947 to October 18, 1949 and those who transferred after October 18, 1949 are not similarly circumstanced because political relations between India and Pakistan were fluid and disturbed immediately after August 14, 1947 but improved considerably by October 18, 1949; hence the legislature could reasonably classify them separately for the purpose of restoration and compensation benefits. The transfer of a substantial portion of assets to Pakistan between August 14, 1947 and October 18, 1949 constitutes a circumstance prescribed as preparation for migration under Section 22(b), and it is available for consideration whether the transfer occurred before or after the person was declared an intending evacuee under Section 19.

The two groups of persons who transferred their assets between the 14th August, 1947, and the 18th October, 1949 and persons who transferred their assets after the 18th October, 1949 were not similarly circumstanced and the denial of equal benefits to the two groups was not an infringement of equal protection of laws under Art. 14 of the Constitution. The circumstance of transfer of a substantial portion of assets was available for consideration for the purpose of an order under S, 22(b) whether or not the transfer took place before the person was declared as an intending evacuee or afterwards. Political relations between India and Pakistan were in a fluid and disturbed state immediately after the 14th August, 1947, but the position improved to a considerable extent by the 18th October, 1949, which it may be noticed was the date when the Administration of Evacuee Property Ordinance, 1949, was made.

On April 1, 1950, the Deputy Custodian, Jaipur made an order declaring the appellant an intending evacuee under Section 19 of the Administration of Evacuee Property Ordinance, 1949 and directed notice under Section 2(d)(i) and Section 2(d)(iii) of the Ordinance. After the Administration of Evacuee Property Act, 1950 came into force, a notice was issued to the appellant under Section 22(b) to show cause why his property should not be declared evacuee property on the ground that he had transferred a substantial portion of his assets to Pakistan. On November 16, 1951, the Deputy Custodian held the appellant to be an evacuee under Section 2(d)(iii) of the Ordinance and declared his property evacuee property under Section 7 of the Ordinance and Section 22(b) of the Act. On appeal, the District Judge, Jaipur set aside the declaration under Section 2(d)(iii) and the order under Section 22(b), holding that while the transfer of substantial assets between November 1947 and September 1948 was established, other circumstances including conduct after October 18, 1949 had to be considered and it was difficult to say that preparation for migration had been made. The Custodian of Evacuee Property, Rajasthan moved the Custodian-General in revision; the Deputy Custodian-General made a reference under Section 27(2) of the Act to the High Court of Rajasthan. The High Court rejected the appellant's contention that the transfer must relate to an act done after the declaration as intending evacuee, held that the transfer of substantial assets during the period from August 14, 1947 to October 18, 1949 constituted preparation for migration, set aside the District Judge's order on Section 22(b), and directed disposal in accordance with its decision. On August 10, 1957, the Deputy Custodian-General held that the property was rightly declared evacuee property under Section 22(b). The appellant filed an appeal by special leave in the Supreme Court. After the appeal was heard in part on January 23, 1961, the hearing was adjourned to enable the appellant to file a writ petition. A petition under Article 32 was filed on February 14, 1961. The appeal and the petition were heard together and decided on April 25, 1961.

• Administration of Evacuee Property Ordinance, 1949: 2(d)(i), 2(d)(iii), 7, 19
• Administration of Evacuee Property Act, 1950: 2(d)(iv), 2(e)(i), 7, 16, 19, 22(b), 27(2)
• Displaced Persons (Compensation and Rehabilitation) Act, 1954: 12, 13
• Constitution of India: Article 14, Article 32