KATHMANDU — The Supreme Court of Nepal has issued a writ of mandamus directing all local governments to strictly adhere to the statutory fee of NPR 2 when authenticating household loan deeds (kapali tamasuk), declaring arbitrary percentage-based fees imposed through local municipal Economic Acts unconstitutional and void ab initio.
Although the constitutional verdict was delivered earlier, the recent publication of the full text formally enforces the ruling, barring local units from levying unauthorized service charges on citizens.
Key Highlights of the Ruling
Statutory Fee Limit: Local levels are legally bound to charge no more than NPR 2 for verifying household transaction documents.
Unconstitutional Local Regulations: Provisions in municipal Economic Acts that levied percentage-based fees on total transaction amounts have been declared null and void from the outset.
Nationwide Application: The order applies to all 753 local units across Nepal, ending inconsistent and illegal fee structures at ward offices.
Legal Context: Section 36 of National Civil Procedure Code, 2074
Under Section 36 of the National Civil Procedure Code, 2074, any personal monetary transaction exceeding NPR 50,000 executed through a household deed (gharsaar ko likhat) must be mandatorily authenticated by the concerned Ward Office to hold full legal standing.
While federal law explicitly fixes the fee for this authentication service at NPR 2, local levels had unilaterally introduced percentage-based fee structures through their annual Economic Acts. Consequently, citizens were often compelled to pay substantial sums—calculated as a percentage of the total loan amount—merely to receive standard ward verification.
Rationale of the Constitutional Bench
The Constitutional Bench—comprising former Chief Justice Bishowambhar Prasad Shrestha and Justices Dr. Ananda Mohan Bhattarai, Prakash Man Singh Raut, Sapana Pradhan Malla, and Prakash Kumar Dhungana—ruled that local governments lack the constitutional authority to enact financial provisions that directly contradict federal statutes.
The apex court observed that imposing percentage-based tariffs on private loan deeds under the guise of local service charges is both illegal and unconstitutional, placing an unwarranted financial burden on service seekers.
Direct Impact on Local Governance and Citizens
Uniform Compliance: All ward offices across Nepal must immediately adjust their revenue collection systems to charge strictly NPR 2 per verification.
Protection Against Overcharging: Service seekers are no longer required to pay percentage-based fees on loan amounts during document verification.
Precedence of Federal Law: Local Economic Acts must align with federal legislation, reinforcing legal consistency across all tiers of government.
