Locals Reinstall Former Owner in Auctioned House, Bank Says 'They Don't Pay Loans, They Do This'

Kathmandu — Locals have collectively reinstalled the former owner in a house auctioned by Lumbini Development Bank. The house, located in Milanchowk, Butwal, was auctioned for 5.3 million rupees despite being worth at least 15 million rupees, allegedly in collusion with a third party. In response, locals and a group led by Durga Prasai reinstated the former owner.

Who is the former owner? What is the dispute?

The owners of the house are Durgabahadur Paudel and Laxmi Basnet Paudel, who are businessmen. Paudel had taken a loan of 4.8 million rupees from Lumbini Development Bank for running a printing press. However, due to an economic downturn, they failed to pay some installments. According to the bank, they owe 5.8 million rupees including interest.

The bank auctioned the house for 5.3 million rupees, claiming non-payment of the loan. The house was purchased by Govinda Lamichhane, a resident of Surkhet.

Locals claim: 'The house is worth no less than 15 million'

Locals claim the house is worth no less than 15 million rupees. They argue that at current market prices, 3 dhur of land alone would not be available for the auction price of 5.3 million rupees.

Former owner Paudel stated that when disbursing the loan, the bank itself valued the house at 8.191 million rupees. However, he alleges the bank sold the house for a pittance in the name of auction. He said that although there was an agreement to sell the house and repay the loan, the bank forcefully auctioned it and rendered them homeless.

Former owner and locals suspect collusion in the bank selling a house worth 15 million rupees for 5.3 million rupees to recover a 5.8 million rupee loan.

Devi Sangraula, coordinator of the Debtors Association under Durga Prasai's mega campaign to save the nation, nationality, religion, culture, and citizens, said the house was returned after the bank excessively mistreated the debtor by selling a 15 million rupee house for 5.3 million rupees against the rules. He claimed that if this situation continues, all auctioned properties will be returned to debtors one by one.

Bank says: 'Auctioned after completing process as loan was not paid'

Bank's information officer Harikrishna Subedi said the collateral was auctioned after completing all procedures. According to him, the loan is 4-5 years old.

However, Subedi said that although the collateral was auctioned after completing procedures when the debtor did not pay, now various excuses are being made to create a dispute. "The collateral was auctioned after completing all procedures. They had filed a case in the district court and lost it," Subedi told Artha Sarokar, "The bank has not made any mistake. They don't pay loans, and after auction, they do this."