A Story of Betrayal and Financial Exploitation
Arjun Phuyal, a 61-year-old man from Chandrapur Municipality-4, used to own a small grocery shop in Chandranigahapur Chowk. His business was thriving, and his income was steady. However, his life took a dramatic turn when he befriended Rambabu Sah Kalwar, a neighboring cloth merchant. Their friendship deepened over time, and they decided to invest in land together.
In 2009, Phuyal purchased 10.5 kattha (0.359 hectares) of land in Chandrapur-5 by borrowing Rs2 million from Kalwar and adding Rs1 million of his own money. The land was divided into three plots, with one kept in Phuyal’s name and the other two registered under Kalwar’s. Later, by mutual agreement, plots numbered 2027 and 1028 were also transferred to Kalwar.
In 2011, Kalwar, who wanted to buy land elsewhere, transferred the two plots originally in Phuyal’s name to himself. According to their agreement, Kalwar was supposed to provide Phuyal with funds to purchase land elsewhere. However, this never happened. Instead, Kalwar failed to return Phuyal's Rs1 million investment.
On January 24, 2024, Kalwar filed a lawsuit against Phuyal, alleging that he had robbed him of cash and gold. On April 13, 2024, the district court ruled that the robbery charges lacked sufficient evidence. Despite this, Phuyal remained in financial and mental distress, as the land he invested in was no longer in his name, and the money he gave to Kalwar was never returned.
Phuyal has spent the past ten years seeking justice, visiting various agencies and officials. "Even after a decade, neither has the land been transferred to my name, nor has the money been returned," he said. "I have been pushed to the streets—where should I go for justice?"
A Pattern of Exploitation
Phuyal is not alone in his struggle. Narayan Ghimire, another resident of Chandrapur-4, had borrowed Rs500,000 from Kalwar at interest. Despite repaying Rs2.7 million, including interest, over several instalments, Kalwar filed a court case against him by filling in Rs2.3 million on a blank security cheque dated November 24, 2019.
Ghimire claims that Kalwar had taken a blank cheque as security for the Rs500,000 loan and later filled in a large amount to file the case. "We approached the police, saying we had been wronged, but Kalwar sued us in court instead," he said.
Rambabu Mahato of Brindaban Municipality-2 also shared a similar experience. In 2017, he borrowed Rs500,000 from Kalwar at a monthly interest rate of 6 percent. In exchange, Kalwar made him sign a promissory note worth Rs2 million—four times the borrowed amount.
Mahato repaid the amount along with Rs140,000 in interest within nearly four months. Bank statements show that he subsequently repaid a total of Rs1.6 million borrowed at different times. Most recently, in 2018, Mahato borrowed Rs2.4 million. In return, he provided five blank cheques as security, while Kalwar retained the earlier Rs2 million promissory note.
Transactions between the two continued. Within a span of two years, Mahato said he paid Rs5.4 million in principal and interest. However, after Kalwar refused to return the cheques and promissory notes, Mahato approached the police.
A Widespread Issue
Phuyal, Mahato, and Ghimire are part of a larger group of victims. Around 7,000 residents across the district have filed complaints regarding loan sharking at the District Administration Office in Gaur, claiming they have been victimized by moneylenders.
A complaint regarding dual citizenship has also been lodged against Kalwar. The District Administration Office said the matter is under investigation.
Although the government has criminalized loan sharking by amending the law, victims who have filed complaints with the District Administration Office and the police say they are frustrated at not receiving the expected justice. Victims claim that when they go to file complaints, the administration often pressures them to reach settlements.
Mahato alleges that loan sharks with access to administrative bodies receive political protection and influence officials through financial inducements, leaving genuine victims in the shadows. They further state that, in many instances, court verdicts have caused additional hardship.
According to the victims, when courts base their rulings primarily on documents allegedly manipulated by moneylenders in advance, victims end up losing their ancestral property. Finding all avenues for justice closed, loan shark victims had travelled to Kathmandu and staged sit-ins on multiple occasions.