Property Law

Theories of Property

The various ideas, beliefs and doctrines regarding the concept, origin and justification of property are, taken as a whole, called the theories of property (also referred to as the philosophical or jurisprudential theories of the origin of property). They attempt to explain why and how property came into existence and on what ground it is justified.

Types of Theories of Property

1. Natural Law Theory

• Traces the institution of property to nature or to God.
• Grotius and Pufendorf held that property originated from an original common ownership, and that the division of things was sanctioned by natural reason and by tacit or express agreement.
• St. Thomas Aquinas and the scholastic writers justified private property as a necessary consequence of human nature, though the earth was originally given to mankind in common.
• John Locke is the most famous exponent: every person has a natural right to property because he mixes his own labour with the things of nature. "Life, liberty and estate" are natural rights antecedent to the State; the State exists only to protect them.

2. Positive Law Theory (Legal Theory)

• Property is the creation of the State and exists only by the will of the sovereign.
• Hobbes and Bentham are the chief exponents. Bentham said: "Property and law are born together and die together. Before laws were made there was no property; take away laws and property ceases."
• The State may therefore regulate, limit or even abolish property by law.

3. Labour Theory

• Property is the product of human labour; a person owns what he has produced by his own exertion.
• Locke is the leading exponent; Karl Marx also used the labour theory, but drew the opposite conclusion — that since labour creates value, the labouring class should own the means of production, and private property in them should be abolished.

4. Social Contract Theory

• Property arose out of an agreement among the members of society to divide things among themselves.
• Rousseau, Grotius and Pufendorf are associated with this view. Rousseau, however, treated the first man who fenced a plot and said "this is mine" as the founder of civil society and of inequality.

5. Metaphysical Theory (Hegel and Kant)

• Hegel held that property is the objectification of the free will of the individual; a person must have external things to realise his personality.
• Kant regarded property as an extension of the personality of the owner, justified by the freedom of the will.

6. Psychological Theory

• Bentham and the utilitarian school explained property by the desire for pleasure and avoidance of pain; the expectation of enjoying the fruits of one's labour is the psychological motive behind ownership.
• William James and others traced it to the instinct of acquisition and possession.

7. Sociological Theory

• Durkheim, Duguit and Laski viewed property as a social institution created for social welfare, not an absolute individual right.
• Duguit denied natural right in property and said the owner holds it as a social trust, bound to use it for social purposes.
• Laski held that property is a means to the enrichment of personality and must be distributed so as to serve the common good.

8. Economic Theory

• Property is the product of economic forces — production, exchange and surplus value.
• Marx and Engels in the Communist Manifesto declared that "the theory of the Communists may be summed up in the single sentence: Abolition of private property," since private property in the means of production is the source of exploitation.

9. Juristic Theory of the Bundle of Rights

• Modern jurists (Salmond, Hohfeld) analyse property not as a thing but as a bundle of rights — rights of possession, use, enjoyment, disposal and exclusion — which the law recognises and enforces against others.

Conclusion Thus the theories of property range from the natural-right and labour theories, which treat property as pre-legal and individual, to the positive-law, sociological and economic theories, which treat it as a creation of the State and a social institution. In Nepal, Article 25 of the Constitution guarantees the right to property as a fundamental right, but subject to law and to the principle of social justice — a position that reflects a blend of the individualist and sociological theories.

Meaning. A right is called relative when it is not absolute: it can be regulated, restricted or, in the manner provided by law, taken away in the public interest. The right to property in Nepal is a relative right because the Constitution itself and ordinary laws limit it.

Constitutional provisions

• Article 25 of the Constitution of Nepal, 2072, in Part 3 (Fundamental Rights), "Right relating to property", gives every citizen the right to acquire, own, sell, dispose of, earn professional business benefits from and otherwise deal with property, subject to law.
• The same Article provides that property shall not be requisitioned, acquired or encumbered except for a public purpose in accordance with law, and then only with compensation as provided by law.
• It expressly preserves the State's power to make laws for land reform, scientific land management, regulation of land use and ceiling of holdings, and to acquire land for such purposes.
• Unlike many other fundamental rights, the clause also leaves room for restrictions through law in the public interest, so the Constitution itself treats the right as qualified.
• Other provisions (the Directive Principles on land reform, Article 51, and the State's ownership of natural resources) point in the same direction.

Legal provisions

• Land Acquisition Act, 2034 allows the Government to acquire private land for a public purpose against compensation, even if the owner objects.
• Land Act, 2021 and land reform laws fix ceilings on landholding and regulate tenancy, restricting ownership and transfer.
• Forest, National Parks and Wildlife, and environment laws restrict use of private land in the public interest.
• Tax and revenue laws (Income Tax Act, 2058, and others) take part of a person's property by way of tax.
• Muluki Civil Code, 2074 limits the owner's power of disposal, for example by recognising the rights of co-owners, family members and heirs.
• Property obtained illegally may be confiscated under the Anti-Money Laundering and Corruption laws.

Conclusion. Because the right is subject to public purpose, compensation by law, land reform, ceilings, taxation and other legal limits, it is not absolute. It is therefore a relative fundamental right, balancing individual ownership with social interest.

Meaning of private Guthi. A private (Niji) Guthi is created when a person dedicates movable or immovable property (usually land) for a religious or charitable purpose such as worship of a deity, a festival, a temple, a rest-house or feeding, and entrusts its management to himself or his heirs as guthiyar. A Rajguthi is a Guthi managed directly by the Guthi Sansthan (earlier by the State). The subject is governed by the Guthi Sansthan Act, 2033, the Guthi-related provisions of the Muluki Civil Code, 2074, and the Guthi Rules.

Process of operation of a private Guthi

1. Creation and dedication. The founder (guthi-donor) makes a written dedication stating the purpose, the property, the guthiyar and the line of succession. The property is thereby separated from private ownership and cannot be partitioned or sold.
2. Registration. The Guthi is registered with the Guthi Sansthan and the property recorded in the land records as Guthi land.
3. Management by the guthiyar. The guthiyar manages the property, collects the income and applies it only to the stated purpose; he is a manager, not an owner.
4. Accounts. He must keep accounts of income and expenditure and submit them to the Guthi Sansthan when required.
5. Succession. The management passes by the terms of the dedication, usually to the male descendants or the heirs named.
6. Supervision by the Guthi Sansthan. The Sansthan inspects, advises, calls for accounts, and acts against misuse.
7. Restrictions. Guthi property cannot be sold, mortgaged or partitioned except as the law permits, and no one can acquire it by adverse possession.

Conditions for conversion of a private Guthi into a Rajguthi

A private Guthi may be taken over by the Guthi Sansthan and managed as a Rajguthi where:

• the guthiyar dies and there is no heir or successor to manage it;
• the guthiyar or his successor is unwilling, unable or unfit to manage it, or abandons it;
• the Guthi is neglected, mismanaged, misappropriated or income is not applied to its purpose;
• the guthiyar fails to keep or submit accounts or violates the Act despite notice;
• the guthiyar voluntarily hands over the management to the Guthi Sansthan; or
• it is necessary to protect the Guthi property or the religious and cultural purpose in the public interest.

The Guthi Sansthan acts after giving notice and an opportunity to be heard, and the takeover may be challenged in the court. After conversion the property is managed by the Sansthan and the income is spent on the original purpose.

Conclusion. A private Guthi is managed by the guthiyar under the Sansthan's supervision, and it converts into a Rajguthi when private management fails or ends.

Introduction. A registered deed of sale of land (rajinama / kharid bikri) is presumed valid, but it can be challenged in court on legal grounds. Under the Muluki Civil Code, 2074 (the chapters on transfer of land and registration), the Land Act, 2021 and the general law of limitation and contract, the following persons may challenge it.

Persons who can challenge

1. Co-owners and coparceners. A person who has a share in the land (a co-owner, or a family member entitled to partition) whose share was sold without consent.
2. Spouse, sons, daughters and other heirs. A person whose legal share or right (for example, the right to partition or inheritance) is affected by the sale.
3. The seller himself. A seller can challenge the deed if his consent was obtained by fraud, coercion, undue influence or misrepresentation, or he was a minor or of unsound mind.
4. Registered tenants whose tenancy right in the land is protected by the Land Act, 2021.
5. The Government or a local level, where the land is public, Guthi or government land, or ceiling and other restrictions have been violated.
6. Creditors where the sale was made to defeat their claim.
7. A person with a prior right such as a mortgagee or a person who holds a prior contract of sale.
8. Guardians or representatives of a minor or incompetent seller.

Grounds of challenge

• the seller had no title or sold more than his share;
• consent was absent, forged or procured by fraud, force or undue influence;
• the seller was incompetent;
• the deed violates mandatory law (ceiling, guthi or public land, tenancy);
• the deed was not made in the prescribed form or was not executed properly before the registration authority.

Procedure and limitation. The challenge is made by filing a suit in the district court within the period of limitation prescribed by law, counted generally from the time the person knew of the transaction. The court may declare the deed void or partly void, order cancellation, restoration of possession and compensation.

Conclusion. Any person whose legal right is affected by the registered sale, or who was a party to it under defective consent, can challenge it in court on legal grounds and within time.

Introduction

The statement raises a genuine conflict between two legally protected interests: patent rights (which reward and incentivise invention) and the right to health of poor citizens (especially access to life-saving medicines for fatal diseases). I partly agree with the statement. It is correct that strong patent protection over medicines and medical products raises prices and thereby restricts the health rights of the poor. However, it is not correct to say that not creating patent rights will necessarily destroy invention, because the law itself contains inbuilt mechanisms — compulsory licensing, government use, parallel importation, and limited-term protection — that balance the two interests. The statement is therefore only half true: it states the problem correctly but ignores the balancing mechanisms available in law.

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1. Patent rights over medicines: the legal basis

Patent is an exclusive right granted by the State to an inventor for a limited period in exchange for full disclosure of the invention. It is a monopoly right, but a temporary and territorial one.

Legal basis:

• Paris Convention for the Protection of Industrial Property, 1883 — Article 1(2) and Article 4 recognise patents as protectable industrial property; Article 5A allows compulsory licences (licences granted without the patent holder's consent) to prevent abuse of monopoly.
• TRIPS Agreement, 1994 (WTO) — Article 27 requires patents to be available for all fields of technology, including pharmaceuticals, for a minimum of 20 years (Article 33). Article 27(2) permits exclusion of inventions whose commercial exploitation threatens ordre public or morality, including human, animal or plant life or health.
• Patent Act, 2022 (1965) of Nepal — Section 3 provides patentable subject matter; Section 8 grants the patentee the exclusive right to make, use, sell or distribute the patented product; Section 10 fixes the term at 20 years from the date of application.
• TRIPS flexibilities — Articles 30 (limited exceptions), 31 (compulsory licensing), 31bis (export of medicines to least-developed and developing countries with insufficient manufacturing capacity), and Article 6 (exhaustion of rights / parallel import).

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2. How patent rights affect the health rights of the poor

Health rights legal basis:

• ICESCR, 1966, Article 12 — the right to the highest attainable standard of physical and mental health.
• UDHR, 1948, Article 25 — the right to a standard of living adequate for health and well-being, including medical care.
• Constitution of Nepal, 2072, Article 35 — every citizen has the right to free basic health services and emergency health services; the State shall provide free basic health services.
• General Comment No. 14 of the CESCR (2000) — states have a duty to make essential medicines available, accessible, acceptable and of good quality, and to ensure that international agreements such as TRIPS do not undermine health rights.

The conflict: A patent gives the patentee the exclusive right to manufacture and price the medicine. During the 20-year term, no generic competitor may enter the market. The result is that:

• Prices remain high (the classic example is the HIV/AIDS antiretroviral drugs priced at over Rs 1,00,000 per patient per year before generic competition).
• Poor citizens in developing and least-developed countries cannot afford treatment for fatal diseases such as HIV/AIDS, cancer, tuberculosis and hepatitis.
• The patent holder's private right thus prevails over the poor patient's constitutional and international health right.

This is the truth in the first half of the statement.

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3. Why "not creating patent rights" is not the only alternative

The statement assumes a binary choice: either patents or no invention. This is a false dilemma. The law provides several balancing tools:

(a) Compulsory licensing — TRIPS Article 31 and Paris Convention Article 5A allow the State to authorise a third party to produce a patented medicine without the patentee's consent, on grounds such as public health emergency, national emergency, or abuse of monopoly. Nepal's Patent Act, 2022, Section 17 empowers the Government to grant a compulsory licence in the public interest. India's Natco v. Bayer (Bombay High Court, 2012) upheld a compulsory licence for Nexavar (a cancer drug) on the ground of unaffordable price — a leading example.

(b) Government use — TRIPS Article 31(b) waives the prior negotiation requirement in cases of national emergency or extreme urgency. A government may itself manufacture or import the medicine for public, non-commercial use.

(c) Parallel importation — Under TRIPS Article 6 and the doctrine of international exhaustion, a country may import a patented medicine from another country where it is sold more cheaply, without the patentee's consent.

(d) Limited term and limited scope — The 20-year term means the monopoly ends; after expiry, generics enter and prices fall sharply. The patent system is thus a time-bound monopoly, not a permanent one.

(e) Doha Declaration on TRIPS and Public Health, 2001 — expressly affirms that TRIPS does not and should not prevent members from taking measures to protect public health, and that members have the right to grant compulsory licences and to determine the grounds for doing so. Paragraph 6 led to Article 31bis.

(f) Section 3(d) of the Indian Patents Act, 1970 — denies patents for mere new forms of known substances unless they show enhanced therapeutic efficacy; upheld in Novartis v. Union of India (Supreme Court of India, 2013). This prevents "evergreening" of medicine patents.

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4. Why not creating patent rights would harm invention

If patents were abolished altogether:

• The inventor's cost of research and development (often billions) could not be recovered, because competitors could copy the product freely.
• There would be free-riding — competitors would sell generics without bearing R&D costs.
• Investment in research for new drugs for fatal diseases would decline, because the financial incentive would disappear.
• The constitutional right to property (Article 25 of the Constitution of Nepal) and the constitutional protection of intellectual property would be undermined.

Thus the second half of the statement is also correct in principle: without some form of exclusive right, invention is discouraged.

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5. The correct legal position: balance, not binary choice

The law does not require a choice between the two. The correct approach is a balanced patent regime:

The Doha Declaration, 2001 is the clearest legal statement that patent rights must be read subject to public health. Similarly, the UN Human Rights Council Resolution 17/4 (2011) and the Guiding Principles on Business and Human Rights require pharmaceutical companies to respect the right to health.

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Conclusion

I partly agree with the statement. It is true that strict patent rights on medicines for fatal diseases raise prices and restrict the health rights of poor citizens, and it is also true that abolishing patents would discourage invention. But the statement is incomplete and misleading because it presents a false binary. The correct legal position, supported by the Paris Convention, TRIPS Articles 6, 27, 30, 31 and 31bis, the Doha Declaration 2001, ICESCR Article 12, General Comment No. 14, and Nepal's Constitution Article 35 read with the Patent Act, 2022, is that patent rights must be balanced with the right to health through compulsory licensing, government use, parallel importation and strict patentability standards. A patent system that ignores the health rights of the poor is legally unsustainable; a system that abolishes patents altogether is economically self-defeating. The balanced middle path is the correct legal answer.

Case. Samtuliyar Devi v. Maheshwor Sah Karm, Supreme Court of Nepal (NKP).

Why a contract among coparceners cannot prevail over the right of partition

1. Partition is an inherent right. In a joint family each coparcener has a legal right to demand partition (ansabanda) from his birth or entitlement, as laid down in the Muluki Civil Code, 2074 and earlier Muluki Ain. The right is created by statute for the protection of each member, and is not a privilege depending on others' consent.
2. Public policy. A private agreement that the coparceners will never partition, or that a member gives up his right to partition, defeats the purpose of the law and is contrary to public policy. Under the Contract Act, an agreement contrary to law or public policy is void.
3. Statute overrides contract. The law on partition is mandatory. A contract can regulate matters left to the parties, but it cannot take away a right which the law grants.
4. Continuing nature of the right. The right to partition arises whenever a coparcener asks for it, so an earlier agreement cannot permanently bind him.

Consequence of a contract contrary to a partition deed

• The contract, to the extent that it conflicts with the partition deed or the right of partition, is void and unenforceable.
• The partition made under the law or the registered partition deed prevails, and the shares are fixed according to it.
• The party relying on the contract cannot obtain a decree on it, and the court will order or maintain partition in accordance with law.
• A person who acted on the contract cannot claim title against the share of another coparcener, and any transfer made under it does not bind that share.

Conclusion. Following the precedent in the case, the right of partition cannot be contracted away, and any agreement among coparceners contrary to it or to the partition deed is void, leaving the statutory right to partition intact.

(a) Astaloha Bakaspatra

An Astaloha Bakaspatra ("eight-metal grant") was a royal deed of gift recorded on a plate made of eight metals, by which the King granted land, usually as birta to a priest, scholar or deserving person, as a permanent and heritable grant, often free of tax. The plate was proof of title and had high sanctity. Such grants were abolished with the abolition of birta tenure under the land reform laws, notably the Birta Abolition Act, 2016, and the Land Act, 2021, so the land now stands on ordinary registered ownership.

(b) Usufruct

Usufruct is the right to use another person's property and to enjoy its fruits, profits or income, without destroying or damaging its substance. Ownership remains with the owner, and the holder of the right (the usufructuary) must preserve the property and return it at the end. It is limited in time, usually for life or a fixed period, and is personal and not heritable. In Nepal, examples are the widow's right to the husband's property for maintenance and the right of a person given a life interest in land under the Muluki Civil Code, 2074.

(c) Registration of deeds

Registration is the official recording of a document of transfer of immovable property (sale, gift, mortgage, partition) in the proper office, in Nepal the Land Revenue Office (Malpot). It gives the transaction legal validity and publicity, protects the buyer against third parties, and fixes priority by the date of registration. In Nepal, a deed of transfer of land is effective only after registration, which is regulated by the Land Revenue Act, 2034, the Land Act, 2021 and the Muluki Civil Code, 2074. A deed not registered within the time limit may attract a fine.