Govt amending Land Act to transfer ownership of land to individuals

The Ministry of Land Management, Cooperatives and Poverty Alleviation (MoLMCPA) has started the process to bring the ownership of land exceeding the ceiling back to individuals again. The ministry is preparing to amend the Land Act, 2021 for the purpose.

If the amendment is passed, the ownership of about 200,000 ropanis of land, currently utilized by various industries, companies, institutions and educational establishments beyond the stipulated ceiling will be transferred to individual ownership.

Under the Land Act, 2021, there is a provision that allows industries, companies, institutions and educational institutes to possess land exceeding the ceiling to ensure sufficient land availability for investment purposes. However, there are restrictions on selling, transferring ownership and mortgaging such land.

According to the MoLMCPA, a significant amount of land, totaling 200,000 ropanis, is held in excess of the ceiling by various entities. The MoLMCPA has prepared a draft for amendments to facilitate the mortgaging of such land in banks. Discussions have started for amendments to the Land Act, 2021, according to Ganesh Bhatta, the spokesperson for the MoLMCPA.

The proposed amendment will focus on enabling businessmen to obtain loans by mortgaging land exceeding the ceiling of their ownership. If the amendment is passed, the land exceeding the ceiling will be transferred back to the names of individuals.

A senior official of the MoLMCPA said, “The bank will auction the pieces of land that have been kept in excess of the ceiling as soon as the interest and principal are not paid, transferring ownership back to individuals.” The official stated that allowing the mortgaging of such land by various companies could lead to auctions, enabling individuals to acquire the land through this process.

According to MoLMCPA sources, businessmen operating hospitals with the purpose of establishing medical colleges, as well as those involved in sugar mills and some tea plantations, stand to benefit from this amendment. Some businessmen, unable to establish medical colleges, seek to sell excess land, which is currently prohibited by law.

According to the existing law, industries, companies, educational institutions and other institutes can only use the land exceeding the ceiling to increase their investment.

As per a provision mentioned in section 7 of the Land Act, 2021 a person or his family member can own 10 bighas in the entire Terai, including Inner Madhesh, 25 ropanis in Kathmandu valley, 70 ropanis in all hilly areas except the Kathmandu Valley. 

Similarly, to prevent an increase in the ceilings for the size of land where one builds one’s house, the law allows 1 bigha of land in the Terai, including Inner Madhesh, five ropanis in the Kathmandu valley and five ropanis in all hilly areas.

Section 12 (c) of the Land Act, prohibits the sale or transfer of land purchased under the Act by related industries, establishments, companies, projects, educational institutions or any other organization.

According to the MoLMCPA sources, as per the current law, the land exceeding the ceiling cannot be sold, transferred, or mortgaged to the bank, leading to eventual transfer to government ownership. But with the amendment to be made to the Act, the pathway for government ownership will be halted, transferring the ownership back to individuals.