LUCKNOW NAGAR NIGAM & OTHERS versus KOHLI BROTHERS COLOUR LAB. PVT. LTD. & OTHERS

Citation: [2024] 2 S.C.R. 847 · Decided: 22-02-2024 · Supreme Court of India · Bench: B.V. NAGARATHNA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

* Author
[2024] 2 S.C.R. 847 : 2024 INSC 135
Lucknow Nagar Nigam & Others 
v. 
Kohli Brothers Colour Lab. Pvt. Ltd. & Others
(Civil Appeal No. 2878 of 2024)
22 February 2024
[B.V. Nagarathna* and Ujjal Bhuyan, JJ.]
Issue for Consideration
1)	
Whether statutory vesting of property termed as enemy 
property under the provisions of the Enemy Property Act, 
1968 amounts to expropriation which leads to change of its 
status inasmuch as its ownership is transferred to the Union 
of India;
2)	
If there is a transfer of ownership by its statutory vesting 
in the Custodian for Enemy Property, whether the Union 
within the meaning of Article 285 of the Constitution would 
be entitled to exemption from payment of property or other 
local taxes to Municipal Corporation under provisions of 
the UP Municipal Corporation Adhiniyam, 1959 (Act of 
1959); and
3)	
Despite becoming the property of the Union, whether, clause 
(2) of Article 285 enables the appellant to impose property or 
other local taxes on the respondent, which is lessee of the 
subject enemy property.
Headnotes
Enemy Property Act, 1968 – Whether statutory vesting 
of enemy property including the subject property in the 
Custodian for Enemy Property amounts to expropriation 
and transfer of ownership so as to confer ownership of such 
enemy property on the Custodian – Enemy Property Rules, 
2015 – r.15.
Held: The Custodian for Enemy Property in India, in whom the 
enemy properties vest including the subject property, does not 
acquire ownership of the said properties – The enemy properties 
vest in the Custodian as a trustee only for the management and 
848
[2024] 2 S.C.R.
Digital Supreme Court Reports
administration of such properties – The Central Government may, 
on a reference or complaint or on its own motion initiate a process 
of divestment of enemy property vested in the Custodian to the 
owner thereof or to such other person vide Rule 15 of the Rules 
– Hence, the vesting of the enemy property in the Custodian is 
only as a temporary measure and he acts as a trustee of the said 
properties – In view of the position of a Custodian, who under 
the Enemy Property Act, 1968, acts as the trustee for the enemy 
property under the Act and not as the owner of the property, but 
as a protector of the property vested in him, the Custodian can 
never be an owner or having any right, title or interest in the enemy 
property as owner.[Paras 16.1, 22.4]
Taxation – Of Enemy property – Constitution of India – Art. 
285 – If ownership of enemy property is conferred on the 
Custodian for Enemy Property, whether such property 
becomes Union property within meaning of Art. 285 of 
the Constitution and therefore, it is exempt from payment 
of property or other local taxes to appellant-Municipal 
Corporation under provisions of the Act of 1959 – Whether 
despite such enemy property becoming property of the 
Union, clause (2) of Article 285 of the Constitution enables 
appellant to impose property or other local taxes on the 
respondent which is lessee of the subject property – Enemy 
Property Act, 1968 – UP Municipal Corporation Adhiniyam, 
1959.
Held: Vesting of enemy property in the Custodian does not 
transfer ownership of such property in the Custodian and by 
that process in the Union or Central Government, but since the 
Custodian is only a trustee of the enemy property, the same is 
liable to tax in accordance with law, including to the appellant 
– The Custodian is only authorised to pay the taxes on the 
subject enemy property – The Custodian while doing so is not 
acting on behalf of the Union Government being the owner of 
the enemy property, rather, the Custodian who is appointed by 
the Central Government under the provisions of the Act, which 
is a Central legislation only discharges his duties and functions 
under the provisions of the Parliamentary legislation i.e. the Act 
under consideration – Such discharge of duties and functions, 
including the payment of taxes vis-à-vis enemy property vested 
in him would not also by the same logic imply that the Custodian 
[2024] 2 S.C.R. 
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Lucknow Nagar Nigam & Others v. Kohli Brothers Colour Lab.  
Pvt. Ltd. & Others
is acting as if the property vested in him has become the Union 
property – Mere vesting of enemy property in the Custodian 
does not transfer ownership of the same from the enemy to the 
Union or to the Central Government; the ownership remains with 
the enemy but the Custodian only protects and manages 

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