Supreme Court imposes criteria to curb land ceiling exemption misuse

KATHMANDU: In a landmark decision aimed at curbing the misuse of land ceiling exemption provisions, the Supreme Court has laid down stringent criteria and conditions for commercial entities availing such facilities.

The constitutional bench of the apex court has delineated a comprehensive set of standards in response to its verdict prohibiting the exchange of land plots enjoying threshold exemption privileges, notably within the ambit of the Giri Bandhu Tea Estate case. Additionally, the Court has directed the transfer of 51 bigha of land from the estate’s holdings, exceeding the land ceiling limit and remaining unused for tea production, to be placed under state jurisdiction.

The Supreme Court’s ruling overturns previous government decisions permitting the utilization of land with ceiling exemption for real estate transactions. Upholding a seven-point standard, the apex court has issued a mandamus, urging the enforcement of these measures across similar business entities.

In the full text of its verdict, the constitutional bench has underscored the necessity of analyzing the detailed area of specific land parcels prior to any swap. Both the exchanged land plots must demonstrate comparable production capacities.

Furthermore, the Court mandates conducting feasibility studies on the land to be acquired in exchange for its productivity assessment, with input from technical experts.

The prevailing land prices in respective locations must also be factored in, ensuring equitable exchange. Importantly, land swapping should not adversely impact employment levels associated with the exchanged plots.

Moreover, the concerned firms are instructed to conduct environmental impact assessments and provide substantial evidence for land swapping purposes, subject to approval from relevant authorities.

This ruling follows the Supreme Court’s previous decision on February 7, 2024, which annulled the former government’s authorization for land swapping in the Giri Bandhu Tea Estate case in Jhapa. The tea estate sought to exchange its Birtamod land, valued at Rs 200 million per bigha, for less valuable land in Prithvinagar, Jhapa.

Advocate Om Prakash Aryal, challenging the amendment to the Land Act, specifically contested the provision allowing Giri Bandhu Tea Estate to conduct the land swap. Allegations of political influence in facilitating the swap for commercial interests were levied against former Prime Minister Oli, underscoring the legal battle’s broader significance in upholding regulatory integrity.