The Bhutanese Leading the way.
After all the court verdicts, a big question hanging over the Phajo Nidup case was how would he pay back the banks and numerous private parties he owed money to, coming to Nu 1.4 billion?
In a recent development, the Supreme Court (SC) has allowed Phajo to auction or sell his lands or give them away to settle his debts.
Phajo owes Nu 566.63 million (mn) to private individuals mostly in various land dealings. He then owes another Nu 904.45 mn to six Financial Institutions (FIs) in loans, interest and fines.
Phajo said that he has agreed to give Nu 400 mn to around 40 to 50 private parties by giving away 20 plus acres of his land within Phuenthsoling Thromde.
He said after this, he has around 78 acres of land remaining within Phuentsholing Thromde of which around 49 acres are under loan, and 29 acres without loan.
He said he has around Nu 160 mn pending to private parties which are in the process of being discussed for settlement by giving away lands.
However, at the moment not a single thram has exchanged ownership or hands as the above are yet to be finalized.
Phajo, has to pay Nu 904.45 mn to the various FIs, and to pay this off he would be advertising the sale of his remaining lands within Phuenthsoling Thromde in the coming days. Of this, he said around Nu 10 mn is owed by other parties.
He said apart from his land, he owns around 3 or 4 houses and various vehicles that will also be put up for sale to pay off the loans.
Phajo said he had made the request to the court to be allowed to sell his land as he feared that the banks will auction his properties at a low rate. He said he has around a year to sell his properties to clear the loans.
Phajo is said to receive Nu 49.233 mn from other parties.
Phajo is allowed to conclude his sale deals within the court premises as he is still being held in detention.
Earlier, the Enforcement Unit under the Thimphu District Court actively consulted with stakeholders and all parties involved in the matter to explore further options for resolving the outstanding amounts.
The District Court, at the time, had offered private parties, many of whom are victims or creditors the option to accept settlement through unencumbered land owned by Phajo Nidup. This is what seems to be happening now.
While the deal for private parties was clearer, the thinking earlier was to allow the banks to auction Phajo’s properties with first preference of payment going to those who registered the loan earlier against the same property.
This is because Phajo had obtained multiple loans on the same Thram in collusion with Phuentsholing Thromde land record officials, bank officials and others.
However, with Phajo appealing to the SC, he will get a chance to sell his lands at market rate and from that amount repay his loans to the 6 FIs.
In response to questions by The Bhutanese, the SC said that on 1st September 2025, the SC issued an order in the enforcement matter concerning Phajo Nidup, who had petitioned the Court seeking approval to sell his mortgaged properties through private sale rather than by public auction.
The SC stated, “The petitioner contended that a private sale would secure better value for the creditors and benefit the multiple financial institutions involved.”
After careful consideration, the SC directed the Enforcement Unit of the Thimphu District Court to permit Phajo to proceed with the private sale of the mortgaged properties under the Court’s supervision.
The SC emphasized that such sales must be completed within a reasonable timeframe. Should the petitioner fail to conclude the sales within the prescribed period, the properties will then be enforced and sold through auction by the respective FIs.
The Enforcement Unit will closely adhere to the SC’s directive and determine the reasonable timeframe for the completion of the private sales. The SC said it remains committed to ensuring a fair and timely resolution of this matter.
Background
On 21st May 2025, the SC sentenced Phajo Nidup to a total of 15 years, 5 months, and 28 days in prison, without the option of a fine.
The case, which reached over multiple court proceedings, involved 275 criminal counts, including 221 felonies and 54 non-felonies such as forgery, bribery, deceptive practices, solicitation, and tampering with official documents.
While the felony convictions amounting to over 15 years of non-compoundable prison time must be served, the remaining sentence related to non-felony offenses was deemed compoundable by the SC and for which he has to pay a fine.
The case also involved FI officials, Phuentsholing Thromde staff, NLC, RSTA, Dungkhag and RBP officials who were convicted.
