Saif Ali Khan is embroiled in a significant legal battle concerning his ancestral properties in Bhopal, valued at approximately Rs 15,000 crore. The Madhya Pradesh High Court has recently rejected his plea challenging the government's decision to designate these properties as "enemy property" under the Enemy Property Act. This ruling potentially alters the inheritance structure of the Bhopal royal family and could see the government taking control of the assets.

The core of the dispute lies in the Enemy Property Act, enacted in 1968 and reinforced after the 1965 Indo-Pak war. This act allows the government to seize properties of individuals who migrated to Pakistan or China and renounced Indian citizenship. The Pataudi family's properties in Bhopal have come under scrutiny because Saif's great-grandmother (some sources say grandmother), Abida Sultan, a daughter of Nawab Hamidullah Khan, migrated to Pakistan following Partition and relinquished her Indian citizenship.

The properties affected by this ruling include Saif's childhood residence, the Flag Staff House, as well as the Noor-Us-Sabah Palace, Dar-Us-Salam, Bungalow of Habibi, Ahmedabad Palace, and the Kohefiza Property.

In 2014, the Custodian of Enemy Property Department issued a notification classifying the Bhopal royal family's assets as enemy property. Saif Ali Khan contested this classification and secured a temporary stay in 2015. However, the High Court dismissed his petition on December 13, 2024, and lifted the stay. While the family was granted a 30-day window to appeal, no such appeal was filed.

The legal battle has seen several twists and turns. An earlier trial court decision in 2000 had recognized Saif Ali Khan, his mother Sharmila Tagore, and his sisters Soha and Saba Ali Khan as the legitimate heirs to the properties. However, this ruling was challenged by other descendants of Nawab Hamidullah Khan, who argued that inheritance should follow Muslim Personal Law. The Madhya Pradesh High Court has now set aside this earlier order and directed the trial court to hear the property succession dispute afresh, with a deadline of one year to conclude the proceedings. The High Court has instructed the lower court to handle the retrial with urgency, aiming to wrap up the proceedings within a year.

The petitioners had argued that upon Nawab Hamidullah Khan's death in 1960, his wealth should have passed equally to his legal heirs under Muslim Personal Law. They opposed the claim that all wealth should go solely to his daughter, Begum Sajida Sultan. However, the Indian government had declared Sajida Sultan as the exclusive heir through a formal communication dated January 10, 1962, based on the Bhopal Merger Agreement of 1949 and Article 366(22) of the Indian Constitution.

The Enemy Property Act has been amended over the years. The Enemy Property Act of 1968 stipulates that enemy properties are permanently kept with the Enemy Property Custodian and cannot be inherited or transferred. A 2017 amendment abolished inheritance rights related to enemy property, ensuring that such property cannot be owned or transferred, regardless of the citizenship of the potential owner.

The High Court's decision reopens a complex and long-standing legal battle involving tradition, constitutional provisions, and religious laws. The outcome of the retrial could significantly impact the inheritance dynamics of the Bhopal royal family.