The Supreme Court on Sunday opened the door for investigation against former prime ministers Madhav Kumar Nepal and Baburam Bhattarai for their alleged roles in the Lalita Niwas land scam.

The court’s argument is that not only those involved in implementing the government decision to transfer land plots in the names of private individuals and those purchasing such lands but also those taking the decision should be investigated.

The court specifically directed investigation of the persons directly involved in the Cabinet decisions of April 11, 2010, May 14, 2010 as well as August 13, 2010 and October 4, 2013, thus paving the way for a probe against two former prime ministers.

Madhav Kumar Nepal is the chair of the CPN (Unified Socialist) while Bhattarai heads the Nepal Samajbadi Party.

Experts said that the court’s order has opened the avenues for criminal investigation of all previous Cabinet decisions, even though Sunday's order was meant to address only concerns over non-investigation of the two former prime ministers involved in making decisions related to the transfer of ownership of the Lalita Niwas land.

When the Commission for Investigation of Abuse of Authority (CIAA) filed corruption cases against 175 individuals in February 2020, it spared Nepal and Bhattarai, stating that their decisions were collective ‘policy decisions’ of their Cabinets.

At the time, the commission had said in a statement that it does not have the authority to prosecute the two former prime ministers if it were to abide by the Supreme Court verdict of September 24, 1996 and Article 4 of the Commission for Investigation of Abuse of Authority Act.

As per the law, the authority cannot investigate the Cabinet’s policy decisions. The anti-graft body has long been demanding that ‘policy decisions’ be clearly defined in the law.

There is a long-held tradition of taking controversial proposals to the Cabinet so that the CIAA would not investigate them. “The court’s order has opened the door for investigating other controversial Cabinet decisions as well,” said Surya Nath Upadhyay, former chief commissioner of the CIAA.

For example, the decision of the then KP Sharma Oli Cabinet to extend the lease period of Gokarna Forest Resort for 25 years before the current lease agreement expires in 2025, had caused a huge controversy.

Besides opening the door for investigating the wrongdoings of past Cabinets, the Supreme Court order could discourage the Cabinet from deciding in favour of vested interests, experts said.

Upadhyay said that Cabinets, particularly the prime ministers, would now be careful when deciding on proposals coming from any ministry. “Even in the Lalita Niwas scam, the Cabinet was not required to make decisions regarding the transfer of ownership for individual land plots,” said Upadhyay. “We cannot expect prime ministers to be aware of every individual land plot, but they should not have entertained such a proposal at all.”

So far, the CIAA has been accused of targeting only small fish while not touching high profile people, particularly the political bigwigs. The commission, on the other hand, has been calling for clarity on ‘policy decisions’; it has been avoiding investigation on controversial Cabinet decisions.

But even a new bill to amend the CIAA Act-1991, which is currently in the House of Representatives, has not defined what qualifies a policy decision. Instead, it has barred the CIAA from investigating policy decisions of provincial governments as well.

“The message of the latest court order is that there cannot be immunity from criminal investigation in the name of policy decisions,” said Radhesyam Adhikari, a Nepali Congress lawmaker in the National Assembly. “The order has not stated that former prime ministers—Nepal and Bhattarai—are guilty but that they are also subject to investigation on the Baluwatar land grab.”

According to experts, the court order could be a milestone, particularly in tackling large scale corruption taking place in the name of policy decisions. Khem Raj Regmi, an anti-corruption campaigner and former president of Transparency International Nepal, pointed out some examples of how policy decisions are taken and how the court order could discourage corruption in such cases.

For example, there is a tendency among ministers to put pressure on bureaucrats to do things for certain vested interests. When an honest bureaucrat refuses to do so, the minister tries to influence the bureaucrat saying that the proposal would first be endorsed by the Cabinet in which case there would be little risk of corruption investigation.

“The latest court order will help minimise such practices,” said Regmi.

According to him, a bureaucrat with ill intent tries to influence the minister to get questionable proposals endorsed by the Cabinet.

There is also the tendency among prime ministers to take a proposal directly to the Cabinet if it is difficult to get it endorsed via the line ministry. “The court order may put a break on such practices,” said Regmi.

But there are also fears that the latest court order will undermine the institution of the prime minister.

“Whether or not there is good governance in the country basically depends on the prime minister who has power to remove ministers and to improve governance,” said Lawmaker Adhikari. “But a number of scandals have taken place in the name of Cabinet decisions, which have eroded the trust in the institution of the prime minister.”

“The biggest impact of the court verdict will be that it will weaken the institution of the prime minister while strengthening a non-elected body like the CIAA,” said Adhikari, a Nepali Congress lawmaker in the National Assembly. “It may make the prime minister and the Cabinet victims of indecision, affecting service delivery.”

There is a tendency among bureaucrats not to take even remotely controversial decisions as it could attract a CIAA investigation. As a result, the government’s development activities and service delivery have been badly affected. The Cabinet sometimes has to take tough decisions that bureaucrats are afraid of.

The government’s indecision has been one key reason behind the prolonged delays in major infrastructure projects and low capital expenditure.

Analysts also point out the potential danger of an institution like the CIAA being used by rival political forces or external forces against the government.

As per the Prevention of Corruption Act-2002, a public official is automatically suspended when the CIAA prosecutes him/her in court.

Experts said political forces and domestic and external power centres will all want to see their favoured candidates appointed as CIAA chief if this institution is seen as more powerful than the Prime Minister’s Office.

“When the CIAA has more power compared to the prime minister, there could be an ugly competition among political forces to install their own people as its head,” said Upadhyay.

In Pakistan, former prime minister Imran Khan has been given a three-year jail for selling a gift provided to him by a foreign head of state after Khan angered the Pakistani military establishment. Many believe he was targeted at the behest of the all-powerful Pakistani military.

Many suspected the hands of external forces in the appointment of the controversial figure Lok Man Singh Karki as the chief of the CIAA in 2013 through a “political agreement” among top leaders of major parties.

Karki went on to terrorise many politicians from his CIAA perch before some lawmakers dared to file an impeachment motion against him in Parliament in early 2017.

When the Supreme Court decided to review Karki’s appointment as CIAA chief in September 2016, the anti-graft body had said that it was probing complaints against the alleged misuse of funds in the cantonments where former Maoist fighters were housed.

Many analysts saw the CIAA move as an effort to influence then Prime Minister Pushpa Kamal Dahal to intervene in the process of the court’s review of his appointment.

“We have seen the misuse of the CIAA with our own eyes,” said Adhikari.

“Many people are happy with the court decision because of large-scale corruption taking place under the patronage of political figures but we should also be careful about the risks too.”