Land Commission rejects govt proposal to sell Trowa theater land

The National Land Commission’s Dispute Settlement Committee (DSC) has shot down the government’s proposal to sell the Trowa theater land to the tenant Kunley Wangchuk as it is not in keeping with the Land Act 2007.

The committee cited the provisions of Land Act, 2007 which stipulates that ‘under no circumstances shall a government land on lease from the government land or government reserve forests land be converted to ownership right’.

However, one main legal weakness that the committee found in the entire case is that though the Ministry in 2006 had agreed to transfer the lease from Sangay Dorji, the new tenant Kunley Wangchuk had never signed the lease agreement and so could not be held legally culpable. This is also while the government did not take any action from its part to change the status quo of accepting a tenant who did not pay rent.

In fact the NLC committee says that the matter should have referred to the court right in the beginning by the Ministry of Works and Human Settlement (MoWHS) when the dispute occurred.

The committee has instead resolved that the sudden hike of lease rate from Nu 2 to 42 did not have any legal basis and was also not in keeping with the Tenancy Act. It has said that using the justification that Thimphu Thromde had similar rates was not applicable as the Thromdes rates were only for temporary labor sheds for construction and not such structures.

The committee had reviewed, deliberated and issued decisions regarding the land lease dispute as per Sections 20, 21, 22.2 and 22.3 of the tenancy Act 2004, and 22.3 of the Tenancy Act 2004.

The committee has instead decided that the lease rate for from January 1, 2006 to June 30, 2009 should be at Nu 2 per sft per annum.

The lease rate from July 2009 till date has been decided at Nu 20 per sft which shall be paid by Kunlay Wangchuk as per the then notification of NLC on lease rates, in exercise of its authority under the Land Act, 2007.

However, the DSC resolved that apart from the lease rent, penalty interest should not be levied from January 2006 till date since the lease agreement has not been executed. The DSC also mandated Kunlay Wangchuk to clear all dues on or before April 6, which is today.

The total comes to Nu 1.14 mn which has been paid by the tenant who has also signed a lease for 30 years more.

The DSC found that the first lessee was supposed to pay the lease rent from July 1, 2001 till December 31, 2005 and that a total amount of Nu 200,690.38 was realized from Sangay Dorji on April 6, 2006 as lease rent and penalty interest. However, while the actual amount due, computed by DSC is Nu 249,514.07, the committee also found no executive decision was taken to either resolve the matter or refer to the court.

The DSC states “Since Kunlay Wangchuk has not accepted the new terms and conditions the first lessee Sangay Dorji should have been notified and the matter should have been submitted to the court of law as per clause 7 of the lease agreement.”

 

New lease agreement signed

The DSC decided that National Housing Development Corporation limited (NHDCL) shall register the land and the lease agreement should also be transferred from MoWHS to NHDCL thereafter.

NHDCL’s managing director, Ugyen Chewang, said a new lease agreement has been signed earlier this week between the MoWHS and Kunlay Wangchuk after he cleared the dues as directed by the DSC, amounting to about Nu 1.4mn.

He said all dues till December 2012 have been cleared and the land has been leased to Kunlay Wangchuk for another 30 years.

MoWHS secretary Dasho Dr. Sonam Tenzin said “the ministry has executed all the signings and payment collections were done by NHDCL”

The MoWHS secretary also said both parties were satisfied with the decisions made by the DSC. “That is the only way forward. We aren’t allowed to sell government land and the earlier revised rate was also not recognized, so we have followed the directives of the committee.”

 

Background

The 19432.56 square foot (sft) land at Changjiji was leased for 25 years to Sangay Dorji in 2001 at an annual lease rent of Nu 2 per sft and the approval for the construction of an entertainment hall was issued by Thimphu City Corporation (TCC).

In 2006, the lease was transferred from Sangay Dorji to Kunlay Wangchuk which was approved by the MoWHS minister with a revised lease rent of Nu 42 per sft. National Housing Development Corporation (NHDC) was directed by the ministry to execute the new lease agreement but Kunlay Wangchuk who said the new rates were not unacceptable, refused to sign any agreement despite several notices issued to him nor has he paid any lease rent since 2006. The current total outstanding lease rent has been calculated at more than Nu 5.2mn.

At some point of time, the MoWHS has even sought to sell the land to the current theatre owner while national council (NC) members linked the case to ‘policy corruption’ during its ninth parliamentary session last summer.

The rejection of MoWHS’ proposal to sell the land to the theatre owner was the first and one of the key decisions made by the DSC.

The issue was first discussed during the fifth and later the seventh parliamentary sessions, in 2010 and 2011 and on both occasions it was decided that the government should resolve it in accordance with the law. The case was yet again included in the parliament’s joint public accounts committee’s (PAC) report presented in the ninth parliamentary session.

During the session, MoWHS minister Yeshey Zimba said selling the land to the theatre owner seemed most suitable since buying it back along with the theatre would incur huge cost for the government. The ministry sent a proposal to NLC to sell the land and the National Assembly then concluded with a decision to wait and hear from NLC.

A nine member dispute settlement committee (DSC) was charged with the complex responsibility comprising of heads of divisions of the NLC and chaired by NLC Secretary Dasho Sangay Khandu.

NC Deputy-Chairperson Sonam Kinga during the ninth parliamentary session said, “In the past six years and six months the lease rent due has piled up to more than Nu 5.2mn but the government hasn’t received a penny.” He said it was concluded in previous sessions of parliament that the government should resolve the case in accordance with relevant laws of land while the situation now is turning just the opposite.

He said, a ministry proposing to sell government land to a private individual means proposing to act against the law. Some NC members during the same session called for and expressed support for an Anti Corruption Commission (ACC) probe.

The ACC was tightlipped on the status of the Trowa case submitted to it by the National Council.

Meanwhile many have commented on the differing treatment meted to Trowa Theater who was allowed to occupy a government property without paying rent for six years while in other cases people were either evacuated or their properties bulldozed for failing to pay the government on time or for occupying government property.