Nisha Bishwakarma
Introduction
At the core of property rights lies the principle of ownership. It gives an individual the necessary motivation to derive benefits from the owned property. The Pragya Nepali Dictionary too defines property as ‘wealth in someone’s personal right’ highlighting the values of individual ownership which serves as the foundation for individual autonomy and economic prosperity.[1]
American philosopher Lawrence W. Reid in his article titled ‘Seven Principles of Sound Public Policy’ writes, ” What belongs to you, you tend to take care of; what belongs to no one or everyone tends to fall into disrepair.” Reeds statement makes the defination and importance of property rights clear. He extends this with an example that says, “If you think you’re so good at taking care of property, go live in someone else’s house, or drive their car, for a month. I guarantee you neither their house nor their car will look the same as yours after the same period of time.” He adds, “If you want to take the scarce resources of society and trash them, all you have to do is take them away from the people who created or earned them and hand them over to some central authority to manage. In one fell swoop, you can ruin everything. Sadly, governments at all levels are promulgating laws all the time that have the effect of eroding private property rights and socializing property through “salami” tactics — one slice at a time.”
Property and Rights
A crucial element of a capitalist economic system, and one that is often misunderstood, is a sturdy framework of property rights. While critics claim property rights often overshadow human rights, this perceived conflict is illusory as property rights are fundamentally a part of human rights.[2] Property right refers to the right of a natural or legal person over any movable or immovable property. Therefore, if a person wishes, the ownership, control, and consumption of property can be transfered.[3]
The fundamental purpose of property rights is the removal of unwanted competition for control of economic resources. Article 17 of the Universal Declaration of Human Rights (UDHR) covers the right to property. Under which (1) every person has the right to own property alone and in association with others, and (2) no one shall be arbitrarily deprived of their property.[4] Therefore, there are three important criteria for property rights efficiency—all scarce resources are owned by someone, property rights are special rights, the source can be transferred for low to high yield.[5]
Property rights are also an important component of the institutional structure. They evolve over time and are driven by economic and political forces. The study of property rights needs to consider both formal and informal arrangements, which ensure that property rights are well defined and enforced. Recent advances in the political economy have given greater importance to the role of the state in the protection of such rights.[6]
This article discusses historical aspects of property ownership in Nepal. It makes an attempt to dispel the illusion that the idea of personal ownership of property is an imported principle. Additionally, this discussion has covered social perspectives, cultural practices, legal issues, and the socio-political context surrounding property rights.
Concept of property rights
The concept of property has evolved and refined from traditional agricultural societies to modern legal ones.[7] Generally, the right to property is a special legal provision regarding the conditions for the use of resources, whether the resources or property belong to the government or the individual. The right to property establishes the exclusive legal right to use the property. The use is approved by society on the basis of the public administrative rules and social values. In the case of government property, the terms of such use are prescribed by law and the authority is entitled to exercise that right.[8]
Property rights in religious literature
Religious texts prevalent in Asia, especially Hindu scriptures, have given different perspectives on personal and property rights. In Hindu philosophy, dharma (duty) and artha (prosperity) are two of the four objectives of life. Managing property responsibly is considered an important element of religion. It emphasizes the need to focus not only on personal gain but also on the welfare of society when using property.[9]
Property has the utmost importance in family and society. Manusmriti mentions various provisions related to property, including women’s rights. It states that women can own property received in the form of gifts, inheritance or dowry.[10]
The Mahabharata, notably the Bhagavad Gita, discusses the duties and responsibilities of a person, including the moral management of wealth and property. It emphasizes that wealth should be used not only for personal gain but also for the benefit of society. It also depicts various aspects of property disputes and inheritance through complex stories.[11] Similarly, the Ramayana depicts the ideal behavior of individuals and rulers regarding the management of state resources. It emphasizes the importance of righteousness and justice in governance and wealth management.[12]
Similarly, one of the oldest texts, the Vedas emphasize the concepts of dharma (duty) and artha (prosperity). Although personal property rights are not explicitly mentioned in the Vedas, the responsibility and morality of the individual are important aspects of managing financial resources.[13]
Similarly, Buddhist teachings, especially dhammapada, emphasizes the impermanence of material possessions and the importance of one’s moral conduct. Although property rights are not directly addressed, the philosophy promotes the moral aspect of preserving and consuming material property.[14]
Property rights in Nepal
In Nepal, there are constitutional and legal provisions for the ownership of property. It ensures a person’s right to use and consume movable and immovable property. The evolution of property rights in Nepal requires careful examination of the historical, social, and socio-political background of Nepal.
Land is the most important source of wealth in Nepal. The social practices related to land management are usually related with Guthi, Kipat and other land systems. At present, various laws related to land management are in practice in Nepal to continue the prelevant practice of land management and to do it scientifically.
Before 1768, ownership or management of Nepal’s land was based on clans or communities. Ownership often came under the jurisdiction of a village or community. Rulers or local chiefs provided land to individuals based on social status or community contributions.
The concept of property rights is based primarily on laws related to Hindu and Buddhist traditions. Traditional land ownership was often communal. The village council or locals responsible would oversee the distribution and use of the land. Similarly, the concept of private property also existed but limited to elites and religious institutions. During the medieval period, especially under the Lichchavi, Malla and later Shah dynasty, land grants were given to temples and religious institutions. The land or property so acquired was managed in the name of Guthi.
With the rise of Rana rule in the 19th century, there was a significant change in land use. The rulers were willing to take ownership of the land and the underprivileged were exploited to maintain control over the land. The majority of the population, particularly the peasants and marginalised communities, had limited land ownership and faced severe economic hardships.[15]
The then King Prithvi Narayan Shah unified The Kingdom of Nepal in 1768. During the unification period (1768-1951), much of the land ownership was concentrated among the rulers and religious institutions. During the Rana regime (1846-1951), most of the land was owned by the ruling class. The system showcased class discrimination in the society due which only the ruler was rich. The ruler’s anarchic and desperateness an impression of wealth to be flawed and negative.
Land and taxes
In Nepal, since the Vedic times, there has been a practice of paying specific taxes to the state while keeping the land under state control. Rigveda and Atharvaved also indicate the collection of land taxes. Later, during the Mahishpal and Kirat periods, landowners were given a certificate called ‘Lekhya,’ and they were required to pay land tax based on production. In the Licchavi period, land revenue was collected in kind from a court called ‘Adhikaran,’ and land administration was decentralized. At that time, village chief oversaw land administration. The historical records of the Malla period however indicate significant improvements in customs, trade, administration, and land.
King Ram Shah had made arrangements to determine the unit of land on the basis of hale, pate, kodale, mato, muri, bijan, mana etc. Similarly, King Jayasthiti Malla made a rule to measure the land and to mortgage and sell the birta land. After the implementation of the Muluki Ain in the year 1910 BS, the collection of land revenue and the system for measuring land for taxation began, marking the start of preparing land records.
From 1930 B.S., the process of keeping a systematic record of the land was started by maintaining the land of the Tarai and the fields of the hills and other lands in the hilly areas named on the basis of agricultural tools in use. The Maal Adda was established in 1953. In 1959 B.S., the ‘Tehsil Office’, which was set up to pay salaries to the employees and to pay arrears, was merged with the Maal Adda. In the same year, ‘Madesh Maal Sawal’ was implemented. According to the then arrangement, the practice of preparing land records under land administration and collecting fees and land tax was started in the Terai from the land owners and elites known as Jamidars, Patwaris and the Mukhiyas.
Similarly, in 1960 B.S., Chandra Shumsher classified the land into four categories namely Aval, Doyam, Sim and Chahar. In 1964, after the land survey, taxes were assessed based on the type of land. Later in 1968 BS, efforts to maintain organized land recordsbegan along with Athsattha marking the start of the process to keep detailed land accounts and data. From 1971 BS onwards, a system for taking missed out land records was established in the Terai, also known as “Harpika.”
After the political changes of 2007 B.S., the system of making public the income and expenditure of the state was introduced. In the first budget of 2008 B.S., land revenue contributed more than 50 percent of the total revenue.[16] This also shows that land was the main source of wealth in Nepal and it still remains so far. In traditional times, apart from land, livestock was also a major source of wealth. Gradually, the practice of industrialization and privatization added to the types of assets. At present, the stock market and non-material assets have also become major sources of wealth.
Land and rights
When it comes to the rights of individuals on land in Nepal, the then King Mahendra enacted the Land Act 2021 during the Panchayat period. Before the Land Reform Act came into force, the ownership of land in Nepal was determined by the feudal system. Small aristocracy, including the royal family and high-ranking officials, controlled most of the land.
The application of different types of land, such as birta, guthi and jagir, led to exploitation of farmers who had limited access to land. The Land Reform Act addressed these inequalities and promoted a more equitable land distribution system.[17] This put an end to the “birta” system of giving land as gift to those loyal to the crown and tried to provide land to farmers deprived of land rights. As a result, most of the farmers who were laborers became the property owners.[18]
Current provisions of property rights in Nepal
Property right is a fundamental right according to the Constitution of Nepal 2072 BS. Article 25 of the constitution guarantees every person the right to acquire, own, sell and manage their property.
Similarly, articles 276 to 284 of the Civil Code, the main law governing property rights, mention the rights and duties of property owners. It includes provisions related to ownership, transfer and disputes of property. Other important laws include the Land Act, The Land Revenue Act, the Land Acquisition Act, and various rules related to land use and tenure. These include ownership, protection against intrusion, and the right to seek compensation for unlawful acts. In addition, these laws protect the limits and privacy of property owners.[19]
To Reflect,
The right to property is a fundamental right of a free society. However, whether the property belongs only to the state or to the individual or to both has shaped today’s global economy. Most countries have been able to prosper due to excessive enjoyment of property rights.
Although property rights are accepted as a constitutional or legal rights in Nepal, the gap between the rich and the poor seems to have widened due to the discrimination regarding the acquisition or use of property. Wealth growth can develop if the state becomes only a regulator, given that wealth is for human beings and can be acquired by humans.[20]
Property rights encourage investment and helps increase productivity. They ensure not only economic growth and investment, but also the freedom of an individual. Property rights encourage individuals and entrepreneurship. Businesses and consumers will be willing to invest if only their property is secured and if they can extract personal benefits from it.[21] Ultimately, safeguarding property rights is not just a legal obligation; it is a pathway to unlock national prosperity that thrives on the security of ownership, fostering innovation, investment, and a fair economic landscape for all.
[1] Pragya Nepali Dictionary, Nepal Academy
[2]Property Rights. Retrieved from https://www.econlib.org/library/Enc/PropertyRights.html
[3] https://www.wallstreetmojo.com/property-rights/
[4]https://www.un.org/en/about-us/universal-declaration-of-human-rights#
[5]https://en.wikipedia.org/wiki/Property_rights_(economics) #
[6] https://www.sciencedirect.com/topics/economics-econometrics-and-finance/property-right
[7] Land tenure and property rights in Nepal. Human Organization, 39(3), 226-235.
[8] https://www.econlib.org/library/Enc/PropertyRights.html
[9] https://www.jstor.org/stable/27296712
[10] https://en.wikipedia.org/wiki/Manusmriti
[11] https://www.lawyersclubindia.com/articles/breaking-barriers-the-evolution-of-equality-in-hindu-succession-16532.asp
[12] https://www.jstor.org/stable/27296712
[13] https://www.khanacademy.org/humanities/art-asia/beginners-guide-asian-culture/hindu-art-culture/a/principal-texts-of-hinduism
[14] https://www.accesstoinsight.org/lib/authors/bodhi/bl129.html
[15]Gurung, H. B. (1998). Land Tenure and Peasant Revolutionary Movements in Nepal. Kathmandu: Sajha Prakashan. Hachhethu, K. (2004). Land, Property, and Politics in Nepal. Kathmandu: Mandala Book Point. Upreti, B. R. (Ed.). (2011). Land Reform in Nepal: Problems and Prospects. Kathmandu: Martin Chautari.
[16] https://www.nepalhomes.com/news/2022/05/08/6278ad85ae3312483cd69109
[17] vol5_art1.pdf. (n.d.). History of land ownership in Nepal before the Land Reform Act.
[18] Wily, L. A. (n.d.). Nepal: Land reform brief. Retrieved from https://www.researchgate.net/publication/270956205_Land_Reform_in_Nepal_Information_in_Brief
[19] https://corporatelawyernepal.com/property-law-in-nepal/
[20] https://marketbusinessnews.com/financial-glossary/property-rights-definition-meaning/
[21] https://boycewire.com/the-importance-of-property-rights/