Property Law

The various ideas and beliefs regarding the concept, origin and justification of property are collectively called theories of property (also known as philosophical justifications of property or schools of thought on property).

Meaning

Property is a complex socio-legal institution. Different thinkers have explained why property exists, how it originated, and on what moral or legal ground it can be justified. These explanations, taken together, form the theories of property.

Types of Theories of Property

1. Natural Law Theory (Natural Right Theory)

• Property is a natural right given by nature or God, not created by the State.
• Hugo Grotius and Samuel Pufendorf held that property arose from an original implied agreement among people, yet it is rooted in natural reason.
• John Locke is the chief exponent: every person has a natural right to the product of his labour. By mixing labour with things held in common, a person makes them his own property. Property precedes the State, and the State exists mainly to protect it.
• Criticism: It ignores the social and legal recognition needed to enforce property rights.

2. Labour Theory

• Closely linked with Locke; Karl Marx also used labour, but reached the opposite conclusion.
• Marx held that property is created by labour, and private property in the means of production enables the capitalist to exploit the worker by appropriating surplus value. Hence private property should be abolished and replaced by social ownership.
• Criticism: Marx's abolition of private property has been found impracticable in practice.

3. Social Contract Theory

• Hobbes, Locke and Rousseau explain property as arising from an agreement among individuals who left the state of nature and formed civil society.
• Hobbes: property is created by the sovereign's law; there is no property against the sovereign.
• Locke: property is natural, and the social contract only protects it.
• Rousseau: the first person who enclosed a plot and said "this is mine" was the founder of civil society and of inequality.
• Criticism: The social contract is a fiction; no historical contract can be proved.

4. Legal Theory (State Theory)

• Property is the creation of the State and of law. There is no property without legal recognition and enforcement.
• Bentham: "Property and law are born together and die together." Before law there was no property; take away law and property ceases.
• Austin: rights, including property rights, are commands of the sovereign.
• Criticism: It makes property entirely dependent on the will of the State and can justify arbitrary confiscation.

5. Metaphysical Theory (Hegelian Theory)

• Hegel regarded property as the objective realisation of the free will of the individual. A person's personality requires an external sphere of freedom, and property is that sphere.
• Criticism: It is abstract and gives no practical test for distribution.

6. Psychological Theory

• Bentham and the utilitarians trace property to the natural desire for possession, security and the expectation of enjoying the fruits of one's labour.
• Property is justified because it satisfies the greatest happiness of the greatest number and gives security of expectation.
• Criticism: It justifies unequal distribution if the majority is satisfied.

7. Evolutionary Theory (Anthropological Theory)

• Henry Maine and others hold that property is not the result of any single contract or natural right but of slow historical evolution.
• It passed through stages: common or collective ownership (tribal, village, family) → gradual recognition of individual ownership → modern private property regulated by the State.
• Criticism: It explains origin but not the moral justification of present property.

8. Functional Theory (Sociological Theory)

• Durkheim, Laski and Duguit view property as a social function. The owner holds property not merely for himself but as a trustee for the community.
• Property must be used in the social interest; the State may regulate or redistribute it.
• Criticism: It weakens the security and incentive value of ownership.

Conclusion

Thus, the ideas and beliefs about property are known as theories of property. Broadly they fall into two groups — those justifying property as a natural or pre-legal right (Natural Law, Labour, Social Contract) and those treating it as a creation of law and society (Legal, Evolutionary, Functional, Psychological). No single theory is complete; each explains one aspect of this complex institution.

Why the Fundamental Right of Property is Called a Relative Right

1. Meaning of a relative right

A right is "absolute" when it cannot be taken away or restricted by the State under any circumstance. A right is "relative" when it is guaranteed but may be limited, regulated or taken away by the State under conditions prescribed by law. The fundamental right of property in Nepal belongs to the second category, and is therefore called a relative right.

2. Position under the Constitution of Nepal, 2072

• Article 25(1) guarantees that every citizen shall have the right to acquire, own, sell and otherwise dispose of property, subject to the law.
• Article 25(2) provides that the State shall not, except in the public interest, requisition, acquire or create any encumbrance on the property of any person. Where the State does so in the public interest, compensation must be paid in accordance with law.
• Article 25(3) expressly permits the State to make laws to impose restrictions on property for the public benefit, and to acquire or requisition property for public purposes.
• Article 25(4) allows the State to acquire or requisition property of a person in cases of taxation, land reform, protection of national interest, and other similar matters.

Thus the Constitution itself, in the same article that grants the right, authorises its limitation. A right that carries its own limitation clause is by nature relative.

3. Why it is relative — reasons

1. Subject to law: The right is not free-standing; it exists only "subject to law" (Article 25(1)). Ordinary legislation can regulate its exercise.
2. Compulsory acquisition is possible: The State may take away private property in the public interest, the only condition being payment of compensation. An absolute right could never be extinguished in this way.
3. Public benefit overrides private interest: Article 25(3) expressly subordinates the right to the public benefit.
4. Taxation and land reform: Article 25(4) recognises taxation and land reform as legitimate grounds for taking property — measures that directly cut into private ownership.
5. Not available to non-citizens: The right is guaranteed only to citizens, unlike rights such as the right to life and liberty which extend to all persons. This restricted reach further shows its relative character.
6. No remedy against lawful acquisition: Once the constitutional conditions (public interest + legal procedure + compensation) are satisfied, the owner cannot resist the acquisition; he can only claim compensation. The right thus protects the value of property rather than guaranteeing its permanent retention.

4. Legal provisions

• Land Acquisition Act, 2034 (1977) — empowers the Government to acquire any land for a public purpose, with notice, hearing of objections, and payment of compensation determined by the Compensation Determination Committee.
• Land Act, 2021 (1964) — imposes ceilings on landholding and redistributes surplus land, a direct statutory limitation on the right to own property.
• Civil Code, 2074 (2017) — regulates acquisition, ownership, transfer, mortgage and encumbrance of property, and provides for escheat (property devolving to the State when no heir exists).
• Income Tax Act, 2058 and other fiscal laws — authorise the State to take a part of property by way of tax.

5. Conclusion

The fundamental right of property is called a relative right because it is neither unconditional nor inviolable. It is guaranteed to citizens only, is exercisable subject to law, and may be curtailed or extinguished by the State for public benefit, public purpose, taxation, land reform and national interest, subject only to the requirement of legal procedure and compensation. It is therefore a qualified or relative fundamental right, in contrast to absolute rights such as the right to life and personal liberty.

Operation of Private Guthi and Its Conversion into Rajguthi

1. Meaning and Nature of Private Guthi

A Guthi is a religious and charitable endowment of land or other property dedicated to a specific religious, cultural or philanthropic purpose. Under the Guthi Sansthan Act, 2033 (1976) and traditional Nepali law, Guthis are broadly of two types:

1. Rajguthi – Guthi endowed, donated or maintained by the King or the State.
2. Private Guthi (Niji Guthi) – Guthi created by a private individual or family out of their own property for religious or charitable purposes.

A private Guthi is a trust-like institution in which the founder (Guthidhar) dedicates property for a definite religious object, and the property is thereafter managed by the Guthidhar or a Guthi Sansthan-appointed manager according to the terms of dedication.

2. Process of Operation of a Private Guthi

(a) Creation (Establishment)

• The founder must be legally competent (major, of sound mind, not disqualified).
• The property dedicated must be his own, transferable and free from legal encumbrance.
• The dedication must be made with religious or charitable intention (sankalpa), generally evidenced by a written deed (Guthi Likhat / Tamrapatra), registration in the Guthi Sansthan, and sometimes a public declaration.
• The purpose must be definite and lawful – e.g., worship of a deity, maintenance of a temple, performance of puja, bhog, jatra, or sadharan (charitable) works.

(b) Management and Administration

• The Guthi is managed by the Guthidhar (founder or his heirs) or by a Guthi manager (Guthi Thakali / Guthi Bhaladmi) appointed under the Act.
• The manager must maintain accounts, registers of property, income and expenditure, and produce them before the Guthi Sansthan on demand.
• The Guthi Sansthan exercises supervision, inspection and audit over private Guthis to prevent misappropriation.

(c) Utilisation of Income

• Income from Guthi land (Guthi Jagga) or other assets must be used only for the declared purpose.
• Any surplus must be accumulated for the Guthi and not distributed among heirs as personal property.
• Diversion of Guthi funds to personal use is punishable under the Guthi Sansthan Act and may also amount to criminal breach of trust under the Muluki Ain.

(d) Perpetuity and Non-Alienability

• Guthi property is inalienable in principle; it cannot be sold, mortgaged or partitioned as ordinary ancestral property.
• It passes from generation to generation for the same religious object.

(e) Termination

• A private Guthi may end only when the declared purpose becomes impossible or when it is legally converted into Rajguthi or otherwise dissolved by competent authority.

3. Conditions for Conversion of a Private Guthi into Rajguthi

A private Guthi does not become a Rajguthi merely because it is badly run. Under the Guthi Sansthan Act, 2033, mismanagement leads first to supervision or takeover of management by the Guthi Sansthan, which is different from a change in the Guthi's legal character. Conversion into Rajguthi arises in the following situations:

1. Dedication or surrender to the State – where the founder or his successors voluntarily hand the Guthi and its property over to the State (formerly the King), it takes the character of Rajguthi.
2. Extinction of the Guthiyar's line (failure of heirs) – where no person remains entitled to manage the Guthi, the property cannot revert to private ownership because it is dedicated, and the Guthi Sansthan takes it over to be administered as a public Guthi.
3. Takeover for repeated misappropriation or neglect – where the manager persistently misuses or neglects Guthi property, the Guthi Sansthan may take over its management and, in serious cases, the Government may take it over permanently, after which it is administered like a Rajguthi.
4. Impossibility of the declared purpose by private management – where the private manager can no longer carry out the religious object, the Guthi Sansthan assumes responsibility to see that the purpose continues.
5. Government decision in the public interest – where the law allows, a decision of the Government of Nepal or the Guthi Sansthan can bring the Guthi under State administration.

Important distinction: temporary takeover of management for failure or misconduct is not the same as permanent conversion. Permanent conversion rests on surrender, failure of heirs or an express Government decision.

4. Conclusion

A private Guthi operates as a self-governed religious trust under the supervision of the Guthi Sansthan, with its income strictly tied to the declared purpose. It loses its private character and becomes Rajguthi when it is voluntarily dedicated to the State, when the founder's line fails, when it is surrendered to the State, when the founder's line fails, or when the Government takes it over after serious misuse or neglect. The conversion is thus both voluntary and compulsory in nature, aimed at preserving the religious object for which the Guthi was originally created.

A registered deed of sale (rajinama) is not immune from challenge. Registration gives the deed evidentiary value and notice to the public, but it does not cure defects such as fraud, forgery, incapacity or lack of title. Under the Muluki Civil Code, 2074, the Land Revenue Act, 2034 and the general rules on void and voidable transactions, the following persons may challenge it in court.

(a) The seller (transferor). Where consent was obtained by fraud, misrepresentation, coercion or undue influence, or where the seller was a minor or of unsound mind, or the signature or thumb impression was forged, the seller may sue for cancellation (lekhat badar) of the deed.

(b) Legal heirs and successors. Where the deed transfers ancestral or joint family property without the consent of the persons entitled, or was executed by someone who held no title, the heirs and successors of the owner may challenge it.

(c) Co-owners and coparceners. A co-owner cannot sell the whole of jointly held land, or a specific portion, without partition. A non-consenting co-owner may challenge the deed to the extent of his or her share.

(d) Holders of a prior or superior right. A buyer under an earlier deed, a mortgagee, or a lessee may challenge a later sale that defeats a right already created.

(e) Registered tenant (mohi). Under the Land Act, a tenant's statutory rights over the land cannot be defeated by a sale. The tenant may challenge a sale made in breach of those rights.

(f) The State or the Guthi. Where the land is public, government or Guthi land, or the registration breached the law (for example, forged documents or a breach of the land ceiling), the Government of Nepal or the Guthi Sansthan may challenge it.

(g) Creditors. A creditor whose security or recovery is defeated by a sale made to avoid the debt may challenge it.

Procedure and limits. The suit is filed in the District Court. The plaintiff must prove the ground of challenge, usually within the limitation period counted from the date of knowledge of the deed. If satisfied, the court declares the deed void and orders the land records corrected. Appeal lies to the High Court and then to the Supreme Court.

In short, any person whose legal right is directly affected by the registered deed, including the seller, heirs, co-owners, prior right holders, the tenant, creditors and the State, may challenge it in court on grounds such as fraud, forgery, incapacity, lack of title or breach of statute.

I agree only in part. An unqualified patent monopoly on medicines for fatal diseases can put them beyond the reach of poor citizens, and having no patent protection at all can discourage invention. Patent law answers this by granting the right and then limiting it for public health.

1. Why patents are needed. A patent gives the inventor a time-limited exclusive right (20 years under TRIPS Art. 33) in return for disclosing the invention. Medicines cost heavily to research and test and are easy to copy. Without patents, firms would under-invest in new drugs. Nepal's Patent, Design and Trademark Act, 2022 BS protects inventors, and Art. 25 of the Constitution of Nepal protects property.

2. Why unrestricted patents harm the poor. Art. 35 of the Constitution makes basic health services free and a fundamental right, and guarantees that no one is denied emergency treatment. A monopoly price on a life-saving drug defeats this right. The standard example is HIV/AIDS antiretrovirals, which cost around US$10,000 a patient a year until generic competition cut the price to a small fraction of that.

3. Legal basis for balancing the two.

• TRIPS Arts 7 and 8: patents should serve social and economic welfare, and members may adopt measures to protect public health.
• Art. 31 TRIPS: compulsory licensing, where the government allows use without the patentee's consent, with fair compensation, in a national emergency or for public interest.
• Doha Declaration (2001): TRIPS "does not and should not prevent" members from protecting public health. Each member may decide what counts as an emergency and may use parallel imports.
• LDC transition: Nepal, as a least developed country, has been exempt from granting pharmaceutical product patents.
• Art. 30 (research and regulatory-use exception): generics can be prepared for approval so they enter the market as soon as the patent expires.

4. Conclusion. The statement wrongly presents the two interests as a choice. Patents should exist to reward invention, but they should be limited by compulsory licences, parallel imports and public health exceptions so that essential medicines stay affordable for poor citizens. The legal balance lies in qualified patent rights, not in the absence of patents.

Why a contract among coparceners cannot prevail over the right of partition. Partition is an incident of coparcenary: every coparcener has a right to demand a separate share. This right cannot be taken away or indefinitely postponed by agreement. Further, a contract binds only its parties. An agreement among some coparceners cannot bind a coparcener who did not consent, and it cannot defeat the share fixed by partition. A court will not enforce an agreement whose effect is to deny a party his lawful share, as that is contrary to law and public policy.

Consequence of a contract contrary to the partition deed.

1. Once partition has been made by a deed (and registered where the law requires), each coparcener holds a separate and definite share. The partition deed is the binding record of those shares.
2. A later contract that is inconsistent with the partition deed, such as one that transfers, burdens or reallocates a share against the deed, is void to the extent of the inconsistency. It gives the other party no right against the share of a coparcener who did not agree.
3. The affected coparcener may seek a declaration, cancellation of the contract to that extent, and recovery of possession of his share, together with any income wrongly taken.
4. Any parts of the contract that do not conflict with the partition deed may remain valid between the parties who agreed to them.

Precedent. This answer follows the principles usually attributed to Samtuliyu Devi v. Maheshwor Sah Karm: the right of partition prevails over a contrary contract, and a contract against a partition deed is void to that extent. The case citation and wording could not be independently confirmed, so check the facts and holding against the reported judgment before quoting them in an exam.

a. Astaloha Bakaspatra

Astaloha bakaspatra was a royal grant document in Nepal, by which the ruling authority gave a person land or other rights as a gift (bakas) in recognition of service or merit. The word astaloha refers to the eight-metal alloy associated with the formal, authenticated charter. It normally conferred a lasting, hereditary right over the land, often free of revenue. Such grants are an early form of documented title and a source of the history of Nepali land tenure.

b. Usufruct

Usufruct is the right to use another's property and enjoy its fruits or profits without destroying or changing its substance. The owner keeps ownership, and the usufructuary may not sell or waste the property. It lasts for life or a fixed period and then returns fully to the owner. A life interest in land or the income of property is an example.

c. Registration of deeds

Registration is the official recording of a transaction document, such as a sale, gift, mortgage, lease or partition of land, at the Land Revenue Office (Malpot Karyalaya). Its purposes are:

1. to give public notice of the transaction and prevent double sales and fraud;
2. to provide reliable evidence of title and the date of the transaction;
3. to settle priority between competing claims; and
4. to enable the State to collect registration fees and taxes.

Registration does not cure defects in the deed, and a registered deed may still be challenged on grounds such as fraud or forgery.

d. Redemption

Redemption is the right of a mortgagor (borrower) to recover mortgaged property by repaying the debt, with any interest due, within the time allowed by the deed or by law. On redemption the mortgage ends and the property returns free to the owner. If the mortgagor fails to redeem in time, the mortgagee may take steps to enforce the security, such as sale of the property or foreclosure, under the law. Redemption therefore protects the debtor from losing the property while the debt can still be paid.

e. Public property

Public property is property owned by the State or a public body for the general public, such as roads, rivers, ponds, parks, public buildings and forests. It cannot ordinarily be sold or mortgaged to private persons or acquired by long possession. Encroachment or damage is punishable by law, and it is managed by the State or the local authority in the public interest.