DECIPHERING NEPALESE PROPERTY

LAWS: AN IN-DEPTH ANALYSIS OF

PRIVATE AND COMMON
OWNERSHIP IN LIGHT OF SUPREME
COURT RULINGS
 1

Introduction
It is said that property and law are born together and die together. Property law is principles,
policies and rules by which disputes over property are to be resolved and by which property
transaction may be structured. What distinguishes property law from other laws is that it deals with
the relationships between and among the members of a society with respect to “things”. The things
that may be tangible (perceptible by touch)1, such as land or a factory or a gold bangle, or they
may be intangible, such as stocks and bonds or a bank account.

Property law then deals with the allocation, use, and transfer of wealth and the objects of wealth.
It also reflects the economy of the society in which it is found. Since it deals with the control and
transfer of wealth between spouses and across the generations, property law also reflects the family
structure of the society in which it is found.

The significance of the concept of property law in any legal system is difficult to understate as it
dictates how valuable parts of the world (other than human generally) can be made as the subject
matter of rights, which may be disseminated by gifts, contract or command of law. Before the
enactment of the written law or codified law, the possession was merely enough to acquire property
right. There are certain theories and principles outlining and safeguarding the right to property.
However, the sanctity of the property rights depends on the history, culture, customs and religious
norms of the particular nation. In context of Nepal, property right is not a single right but a bundle
of rights., and incorporates different other legally enforced rights by different statutes and acts and
landmark judgements from the court.

The Constitution of Nepal, the Supreme Law and so many other statutory provisions including
acts, ensures and safeguards the property law of the country and rights of the people. Since,
Constitution is the mother law, it must be followed and shall abided by it while enacting laws.
There are a lot of property law clauses in the National Civil Code- Civil Code of Nepal 207. The
property law of our country is tucked away in a plethora of other legal laws. Part-4 of the National

1
OXFORD LANGUAGES, s.v. "tangible," accessed December 13, 2023, https://bitly.ws/35IGQ
 2

Civil Code, 2074 that is on the Law related to property had defined that property is anything that
can be used, purchased, sold, or by other means transferable or can be transacted or any cash,
matters or actions through which any benefit can be achieved. The explanation of this part has
made that except anything provided here ‘matters’ has been defined that matters means anything
that is physically existed and can be sold.

It r4eflects a comprehensive and adaptable approach to encompass a broad spectrum of assets and
rights. By explicitly stating that property includes anything that can be used, purchased, sold, or
otherwise transferable, it acknowledges the diverse forms of property prevalent in modern
societies. The inclusion of the term ‘matters’, clarified as anything physically existing and sellable,
further underscores the intention to cover both tangible and intangible assets within with ambit of
property. This definition aligns with economic realities, facilitating trade and commerce by
establishing a clear legal framework for ownership and rights.

Under the Constitution of Nepal, 2072 property as a fundamental right is not absolute but shall

have a reasonable restriction. It is not necessary that we should enjoy absolute ownership over the
property. Property of any person is not understood as only tangible material assets but the rights
to occupation of land through of tenancy right is a right to property. 2 Looking back at the history,
Constitution of Kingdom of Nepal, 2047 recognized the sanctity and inviolability of private
property. The Interim Constitution of Nepal, 2063, under its article 19 had also provisioned about
the right to property. It provided that every citizens shall subject to the existing law have the right
to acquire, own, sell and otherwise dispose property as a fundamental right. 3 Not just that Article
25 (2) of the Constitution of Nepal, 2072 provides that the state shall not, except for the public
purpose, requisition, acquire, or otherwise create any encumbrances on property of any person.
Clause (2) of Article contains a guarantee against undue encroachment upon the private property
by the executive. This is right inherent in sovereignty of each state. 4 These constitutional
provisions do not virtually confer this right but only recognize and generally surrounds it with
safeguards to the interest of the private owner in property.

2
Purna Bahadur V.Ka.La.Pa, NKP, P. 88
3
Interim Constitution of Nepal, 2063 Art-19
4
DG Chaturbedi (1997) Law of Fundamental Rights, Delhi: Delhi Law House, (4th Ed.).,P.28
 3

In one of the landmark verdicts, the Supreme Court of Nepal has held that the right to property is
not a fundamental right but a legal right. The landmark verdict defining the scope and nature of
the right to property was delivered by J. Laxman Prasad Aryal on behalf of a five members full
members presided by Mohan Prasad Sharma in Mithilesh Kumar Singh V. PM Girija Prasad
Koirala and others (1999). 5 The petitioner had challenged the constitutionality of some legal
provisions introduced for even division of between tenant farmers and landowners where the court
decided in favor of the claimant giving legality to the property and defining a new dimension to
the explanation of the property being in the existence of a transferable identity and which looks
like a contractual obligation between state and the citizen highlighting the ‘social contract theory.’

Ownership

The major factor that classifies the property significantly is ownership. The ownership is right to
use, possess, and dispose of property, subject only to the rights of the persons having a superior
interest and to any restrictions on the owners’ right imposed by agreement with or by act of third
party or by operation of law. Ownership is the right to the exclusive enjoyment of the things which
can be owned, i.e. things which can be called property. It is the ultimate and exclusive right
conferred by a lawful claim or title an item of property or even transfer it. Ownership is the largest
interest, its unlimited and undefined scope deriving from the right to exclude others. 6

In the context of ownership, it is established that not every physical object is subject to possession.
A prime illustration of this principle pertains to the unequivocal impossibility of claiming
ownership over the human body or deceased individuals. This fundamental notion is well-
established. An illustrative case in point is Yearworth v North Bristol NHS Trust 16, where the
question of whether semen could be considered property arose. The case centered on the issue of
whether the defendants could be held liable for negligent storage leading to damage. The court
concluded that semen could indeed be owned. This determination was grounded in the intentional
production of semen, particularly by individuals anticipating chemotherapy that might impact

5
NKP (2056), P.480
6
Legal dictionary. the free dictionary.com/ownership visited on 2 May 2016.
 4

fertility. The deliberate creation of semen, coupled with the retention of control over its subsequent
use or destruction by the men involved, solidified its status as property under legal consideration.
This decision illustrates the nuanced complexities that can arise when determining ownership in
circumstances involving human biological materials. 7

Ownership can be taken by different person for different interests, for example when a freehold
owner grants a lease or when land is held on a trust of land for person with interest in succession
of one another. More than one person can own the same property at the same time. They may be
either joint owners with a single title to the property; or owners in common, each living a distinct
title in the property that can be possessed of independently.

When the ownership is vested in one person it is called sole ownership. When property joint held
by the several persons at the same time it is called the co-ownership. According to English Law,
property in common (co-ownership) could be further divided into joint tenancy and tenancy in
common. It may be in the form of joint tenant when in property is considered to be a single unit.
Duplicate ownership is as much as possible in as sole ownership. Two or more persons may the
same right vested in them. That may be done in many ways and one of the same right vested in
them. That may be done in many ways and one of them is that of ownership. The rightis an
undivided unity. By means of a partition, the co-ownership can be ended and the parties concerned
can have their own shares.

Common Property encompasses all real and personal assets, easements, and related interests,
including facilities and improvements. These are owned by the Association and are intended for
shared use and enjoyment by the Owners. 8 It is a situation in which a home or other property is
owned by more than one person or organization. 9 Ownership in common refers to the right of
ownership shared by two or more people whose interests are divisible. Upon the death of one
owner, their interest in the property passes to the dead owner’s heirs. This means that if A and B
have ownership in common of property and A dies, A's share does not go to B. Rather, A's share

7
Yearworth v. North Bristol NHS Trust, [2008]
8
Common Property Definition: 1k Samples, Law Insider https://www.lawinsider.com/dictionary/common-property.
9
https://dictionary.cambridge.org/dictionary/english/common-ownership.
 5

goes to A’s heir. This contrasts with joint ownership, where the interest of the dead owner would
pass to the remaining owner(s).10

On the basis of ownership, the section 256 of Civil Code of Nepal 2074 has classified the property
into 7 types among which are; private property and property in common.

Private Property:

It has been clearly specified in section 256 about the private property. 11The properties deemed to
have a private ownership of a person is listed in this section. The National Civil Code delineates
the criteria for categorizing properties as private, assigning ownership to specific individuals based
on different circumstances. Private property encompasses a range of acquisitions, including those
earned through personal knowledge, skills, or effort, obtained via donation, bequest, or succession,
acquired through a lottery or gift, or earned through remuneration, gratuity, pension, medical
expenses, provident fund, insurance, or other social security. The law also recognizes properties
obtained through intellectual pursuits, living separately under legal provisions, or managing
accommodation at one’s own cost. 12 Additionally, it acknowledges a woman’s entitlement to
properties earned or acquired before marriage, or received from her parental side at the time of
marriage. The law further extends recognition to properties granted to a woman by her husband or
with the consent of coparceners on the husband’s side, emphasizing her exclusive rights to such
assets.

Individual who possess properties meeting the criteria outlined in the National Civil Code are
granted the exclusive rights to deal with their private assets. This entitlement allows owners to
exercise control over the usage, management, and transfer of their private properties within the

10
Lii, Ownership In Common, US Law https://www.law.cornell.edu/wex/ownership_in_common.
11
National Civil Code of Nepal (2074), § 256.
12
Laxmi Prasad Kharel, Property Law in Nepalese Perspective (1st ed. 2078).
 6

legal framework provides clarity on boundaries and privileges associated with private property
ownership, contributing to the overall legal structure governing property rights in Nepal.

Property in Common:

Common property, defined by shared ownership among multiple entities, entails a reduction in
individual control compared to sole ownership. This concept manifests across diverse scenarios.
In the realm of real property, common property takes the form of holdings owned by tenants in
common. Each tenant possesses an undivided interest in the entire property, extending to resources
cultivated on such lands. For instance, farm goods produced on land jointly owned by tenants in
common are considered common property. Notably, harvesting these goods requires the approval
of fellow co-tenants. In the context of homeowners' associations managing properties in
subdivisions or condominium projects, the shared nature of ownership designates the property as
common.

All owners enjoy the right to utilize the property, with each holding a specific percentage interest
reflective of their ownership share. Government-owned lands designated for public use, such as
national parks and forests, represent a unique form of common property. These lands, owned by
the government on behalf of its citizens, underscore the collective ownership held by the nation's
body of citizens. Geographic names associated with these public lands are generally regarded as
common property, precluding their appropriation as trade names.

Additionally, the natural resources on these lands, including naturally flowing water in streams,
fall under the classification of common property. Extending beneath the surface of the land,
common property may also refer to subsurface resources, such as oil and gas rights. Unlike
absolute property rights, these rights are contingent and resemble common property until
effectively captured and possessed, transitioning to absolute ownership only upon successful
extraction. This nuanced understanding of common property reveals its diverse applications and
underscores the shared ownership dynamics prevalent in various legal contexts. 13

13
Lii, Common Property, US Law https://www.law.cornell.edu/wex/common_property.
 7

The National Civil Code underscores the parameters for categorizing properties as common,
irrespective of private individual ownership among the coparceners. Properties falling under this
classification include those inherited from ancestors, collectively owned by coparceners excluding
private property, and assets earned through joint farming, industry, trade, or business endeavor.
The provision recognizes the communal nature of certain assets within familial and coparcenary
structures, emphasizing shared ownership and the importance of delineating these properties as
common, subject to the conditions specifies in Section 257.14

Furthermore, the section extends this concept to marital unions, stipulating that unless legally
separated, any property earned by a husband or wife, along with its assets, shall be considered
property in common between the spouses. This acknowledgment of ownership reflects the legal
understanding of the collaborative financial and property interests inherent in marital relationships.
Additionally, the law recognizes a familial dimension by deeming any property earned by parents
for the purpose of partition between parents and their children as property in common. The
concluding clause emphasizes that the use, transfer of rights, and other regulatory aspects of the
property in common are to be governed by the stipulations found in other chapters of the National
Civil Code, providing a comprehensive legal framework for dealing with shared assets.

We may postulate the difference in following manner: 15

Ownership Criteria:

 Private Property: This category includes assets earned through personal knowledge, skills,
or effort, obtained via donation, bequest, or succession, and various other individual means.
Private property is associated with exclusive ownership, emphasizing individual rights and
control.
 Property in Common: This classification encompasses properties inherited from ancestors,
collectively owned by coparceners (excluding private property), and assets earned through
joint farming, industry, trade, or business endeavors. Property in common is characterized
by shared ownership among coparceners or within familial structures. Nature of

14 14
National Civil Code of Nepal (2074), § 257
15
Gyanindra Bahadur Shrestha, Law of Property (1st ed. 2076).
 8

Acquisition:

 Private Property: Individual efforts, inheritances, and personal acquisitions contribute to

the formation of private property. The emphasis is on personal achievement or external
factors such as donations and inheritances.
 Property in Common: This category includes properties acquired collectively by
coparceners or, in the case of marital unions, by spouses. The communal nature of property
in common is highlighted, signifying joint efforts or shared familial interests in its
acquisition.

Marital Context:

 Private Property: The law recognizes specific scenarios where property is considered
private, such as that earned by a woman before marriage or granted to her by the husband
with exclusive rights.
 Property in Common: Property earned by spouses during marriage is automatically deemed
property in common unless legally separated. This acknowledges the joint ownership of
certain assets within the context of marriage.

Parental Earnings:

 Private Property: The law doesn't specifically address property earned by parents in the
context of private property.
 Property in Common: Property earned by parents for the explicit purpose of partition
between parents and their children is considered property in common, recognizing the
familial dimension in the acquisition and division of assets.

Regulatory Framework:

 Private Property: Owners of private property are entitled to exclusive rights and can deal
with their property as outlined in the National Civil Code.
 Property in Common: The use, transfer of rights, and other regulatory aspects of property
in common are subject to regulations specified in other chapters of the National Civil
 9

Code. This implies a distinct legal framework governing shared ownership and its
implications.
In summary, the National Civil Code carefully defines the criteria and circumstances under
which properties are classified as private or in common, emphasizing individual ownership
rights in private property and shared ownership within specific familial or coparcenary
contexts for property in common.

Critical Analysis (through case).

To distinctly separate the nature of property; whether it is private or a common-property, it

should be properly and relevantly documented through writing as well. Sometimes even the
private property can be ‘blended in common stock’ when the main source of earning of private
property is within the ambit of common ancestry or common earning. However, it is not enough
to say that it is not the property of common, even if it says private earnings in the relevant
document or not. A relevant conduct should prove the given. This principle was signified in a
latest case of 2077 B.S. Tara Bahadur Thapa v. Manu Thapa.16 While remaining within the
interest of common property , all the shares in the property acquired through the contribution can
be shared. If there is some aspect of the property earned purely individually, then it is considered
as joint property. If it is included in the collective property (combined with the common stock),
the property may be entitled to a share of all. It seems that even though the land was obtained by
the through the written statement of gift by the respondent (wife), the house was built on that
land with the collective investment of both claimant and defendant. Since, no credible or reliable
evidence had been submitted to show that the said house was constructed from the personal
earnings of the respondent Manu Thapa, it remained independent of any of her sole income, and
being the common property every coparcener has partitioned right over it.

A similar principle was signified in a very historical case of 2042 ; Modh Narayan Mishra v.
Rameshwor Mishra. 17 In addition to the document, it should also be clear that it is a property of
private acquisition. It cannot be said that it is a private income because it is obtained from a mere

16
NKP (10974), P. 27
17
NKP (2381), P. 27
 10

document. In the present case, the defendant could not say that the disputed land is the private
acquisition of the defendant, and it has not been proven.

In conclusion, we can witness how different cases and National Civil Code of Nepal carefully
distinguishes between private and communal ownership. Private property pertains to individually
acquired assets, earned through personal efforts or received as gifts, while property in common
involves shared ownership among family members or coparceners, encompassing inheritances
and collectively acquired assets. The legal framework extends to marital relationships, where
property earned during marriage is considered communal unless legally separated.

It is clear that the statutory provision of Nepal has acknowledged the distinct nature of properties
based on ownership rights that include private (solely owned property and common-property0
that re not quite familiar to any other countries’ property law. It signifies the progressive
movement of property related laws in Nepal.

Additionally, the recognition of property earned by parents for eventual partition introduces a
familial dimension to communal ownership. The National Civil Code provides a structured
regulatory framework for the utilization and transfer of both private and communal properties,
offering legal clarity and coherence in navigating the complexities of ownership in Nepal.