Based on a cabinet decision taken on March 9, 2010, the Ministry of Finance (MoF) had instructed all land revenue offices to register or transfer houses and land from one person or company to another only on the basis of a good for payment cheque issued by the bank concerned. [break]The government had brought this decision into implementation since April 14, 2010.
Damber Prasad Sibakoti subsequently filed a writ petition at the apex court challenging the government decision.
Responding to the writ petition, the division bench of SC Justices Top Bahadur Magar and Bharat Bahadur Karki issued a ruling nullifying the government´s decision.
Through the same decision, the government had also instructed land revenue officers to bring anyone´s land under government ownership through payment of the net undervalued price if the officers suspected that the transaction in question involved understating of the actual price.
The SC scrapped the government decision, saying that the state cannot impose any decision that flouts existing constitutional and legal provisions. The SC said the government can introduce any policy only after amending the relevent constitutional and legal provisions.
"The government decision to bring someone´s land under its ownership because the transaction involved undervaluing flouts provisions of the Interim Constitution, the Civil Code, the Land Revenue Act and the Land Acquisition Act," reads the ruling, adding, "Individual rights guaranteed by constitution and law cannot be curtailed by a cabinet decision. Thus, the cabinet decision enforcing realty transactions only through banking channels is hereby nullified."
The SC said the cabinet is not above the law and thus cannot take any decision overruling or bypassing existing constitutional and legal provisions.
"The government decision to accept realty transactions through banking channels only cannot be enforced unless Acts, Laws and Regulations related to land ownership are amended accordingly," the ruling further reads.
The government had said it took its decision to track the income sources of individuals if needed, curb capital gains tax leakage, make real estate transactions more transparent and monitor properties amassed through unseen sources of income.
However, the petitioner had claimed that the government decision to bring an individual´s real estate under its control curtailed constitutional rights related to acquisition and disposal of land and houses.
The SC has also drawn the attention of the government towards the ramifications of its decision.
"If government feels that real estate transactions carried out outside banking channels could invite corruption or leakage of revenue, it has to address such problems by introducing proper laws, not by issuing a decision in violation of existing legal provisions," the ruling reads.
Related story
Lending slows as banks focus on recovery of loans at fiscal yea...
