40. Validity of transfer respecting property subsequently declared to be evacuee property. -(1) No transfer made after the 14th day of August, 1947 but before the 7th day of May, 1954, by or on behalf of any person in any mariner whatsoever of any property belonging to him shall be effective so as to confer any rights or remedies in respect of tire transfer on the parties thereto or any person claiming under them or either of them, if, at any time after the transfer, the transferor becomes an evacuee within the meaning of Sec. 2 or the property of the transferor is declared or notified to be evacuee property within the meaning of this Act, unless the transfer is confirmed by the Custodian in accordance with the provisions of this Act.
(2) Nothing contained in sub-section (1) shall apply to the transfer for valuable consideration of any such property as is referred to therein in any of the following cases, namely:
(a) Where the transfer has been made with the previous approval of the Custodian before the commencement of the Administration of Evacuee Property (Amendment) Act, 1953 (11 of 1953);
(b) Where the transferor has not left India for Pakistan within a period of two years from the date of the transfer:
Provided that in the case of a transfer made before the commencement of the Administration of Evacuee Property (Amendment) Act, 1953 (11 of 1953), the transferor had not left India for Pakistan before such commencement, notwithstanding that a period of two years had already elapsed before such commencement;
(c) Where the transfer is made after the commencement of the Administration of Evacuee Property (Amendment) Act, 1953 (11 of 1953) and, -
(i) The value of the property or properties transferred in any one year is less than five thousand rupees, or
(ii) The transfer is made with the previous approval of the Custodian or in the prescribed cases with the previous approval of the Custodian-General.
(3) An application under sub-section (1) for the confirmation of any transfer may be made by the transferor or the transferee or any person claiming under, or lawfully authorized by, either of them to the Custodian within two months from the date of the transfer or within two months from the date of the declaration or notification referred to in sub-section (1) whichever is later, and the provisions of Sec. 5 of the Indian Limitation Act, 1908 (9 of 1908) shall apply to any such application.
(4) Where an application under sub-section (1) has been made to the Custodian for confirmation, he shall hold an inquiry in respect thereof in the prescribed manner and may reject the application if he is of opinion that-
(a) The transaction has not been entered into in good faith or for valuable consideration; or
(b) The transaction is prohibited under any law for time being in force; or
(c) The transaction ought not to be confirmed for any other reason.
(5) Where, in respect of any transfer made before the commencement of the Administration of Evacuee Property (Amendment) Act, 1953 (11 of 1953), any application for confirmation thereof has been rejected solely on the ground-
(a) That although the transaction was entered into in good faith, the consideration paid was not adequate, or-
(b) That the application was bared by limitation, then, notwithstanding anything to the contrary contained in any law or contract, or decree or order of a Civil Court or other authority, but subject to any rules that may be made by the Central Government in this behalf, the Custodian may and shall, where the application for confirmation was rejected by the Custodian-General, if the Custodian-General so directs exercise any of the following powers in respect of the transfer, namely:
(i) Confirm the transfer if the consideration paid for the transfer is adequate;
(ii) Confirm the transfer, if the transferee agrees to pay to the Custodian the difference in value between the value of the property as assessed by the Custodian and the amount actually paid by the transferee to the transferor;
(iii) If the transferee agrees, take possession of such part of the property as, after dividing it by metes and bounds, is equivalent in value to the difference between the value of the property as assessed by the Custodian and the amount actually paid by the transferee to the transferor;
(iv) If the transferee agrees, take possession of the entire property by paying off to the transferee the amount which the Custodian finds as having been actually paid by the transferee to the transferor as consideration for the transfer; or
(v) If the transferee does not agree to any of the courses referred to in Cls. (ii) to (iv) inclusive, auction the property and if the sale proceeds exceeds the amount actually paid by the transferee, pay to the transferee the amount paid by him and take over the balance and if the sale proceeds are equivalent to, or fall short of, the amount actually paid by the transferee, pay the entire sale proceeds to the transferee:
Provided that where any application for confirmation of a transfer is rejected on the ground specified in Cl. (b) of this sub-section the powers conferred on the Custodian by this section shall not be exercised unless the Custodian finds that the transaction has been entered into in good faith.
(6) If the application is not rejected under sub-section (4), the Custodian may confirm the transfer either unconditionally or on such terms and conditions as he may think fit to impose.
(7) The Custodian may, in respect of any application for confirmation of a transfer pending before him on the commencement of the Administration of Evacuee Property (Amendment) Act, 1953 (11 of 1953), which is liable to be rejected on either of the grounds specified in Cls. (a) and (b) of sub-section (5), exercise any of the powers conferred on him under that sub-section.
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