Minister Sunil Lamsal Accused of Pressuring Rs 100 Million Payout in Sub Judice Case

Kathmandu — Minister of Physical Infrastructure and Transport Sunil Lamsal has been accused of unlawfully pressuring Neco Insurance Company to release around Rs 100 million in connection with a disputed insurance claim currently under consideration by the Supreme Court.

According to sources, Lamsal summoned officials from the Insurance Authority and Neco Insurance, including CEO Ashok Khadka, to his office at Singha Durbar. Representatives of Lumbini Builders, a company linked to individuals from his home region of Butwal, were also called in. Despite the matter falling outside his ministry’s jurisdiction, the minister allegedly pushed for an immediate payout to the company.

The meeting took place on April 16, 2026, and was linked to Supreme Court case number 082-CI-0961. During the discussion, Lamsal is said to have insisted that Neco Insurance pay Rs 103,497,738, the amount determined by a High Court ruling, to Lumbini Builders without delay. Sources say the minister spoke in a stern manner and directly instructed the company’s CEO to proceed with the payment.

Officials at Neco Insurance have acknowledged that such pressure was exerted, although CEO Ashok Khadka declined to comment.

The incident has raised concern within the Ministry of Physical Infrastructure and Transport, where officials were reportedly surprised by the minister’s involvement in a matter under active judicial review. It has also emerged that the Insurance Authority attempted to facilitate a settlement despite the case being sub judice, although no agreement has been reached so far.

A settlement by Neco Insurance alone would not be sufficient to resolve the dispute. There is a possibility that the Supreme Court could overturn the High Court’s decision, which has been described as flawed and inconsistent with established insurance principles. In addition, any payout would involve a reinsurance company, meaning the decision cannot be implemented unilaterally or at the minister’s direction.

Neco Insurance is a publicly listed institution in which government entities hold more than a 21 percent stake. Critics argue that the minister’s actions could expose the government to financial risk and raise serious ethical concerns.

Under Nepali law, interference in cases under judicial consideration is prohibited. Even parliamentary discussion of such matters is restricted, and any attempt to influence proceedings can be interpreted as interference with the judiciary. A minister summoning involved parties and pressuring one side to settle raises serious legal questions.

When asked about allegations that he summoned parties involved in a Supreme Court case and pressured Neco Insurance to release funds, Minister Lamsal did not respond.

Background of the Dispute

The dispute originates from a bridge construction contract awarded on May 28, 2011, to a joint venture between Pappu Construction and Lumbini JV. The project involved building a 470 meter long and 11 meter wide bridge with 12 spans over the Kamala River, linking Siraha and Dhanusha, with a planned completion period of three years.

After Pappu Construction was blacklisted, Lumbini Builders assumed responsibility for completing the remaining work under a revised agreement. The bridge later sustained damage when one span collapsed during flooding on July 2, 2021, followed by further damage from floods on October 18 and 19, 2021.

However, the project’s insurance policy had lapsed and was only renewed on December 6, 2021. Based on this, the Insurance Authority ruled that the damages from the October floods were not eligible for compensation.

Lumbini Builders challenged the decision but was unsuccessful. At the time, the company reportedly made attempts to influence the outcome through improper channels, but the case could not be altered on technical grounds.

The matter took a turn when the Patan High Court issued a ruling that went beyond the surveyor’s report and instead relied on a private assessment, determining a specific compensation amount and ordering payment. The decision has been criticized as inconsistent with core insurance principles.

Neco Insurance has since appealed the ruling to the Supreme Court. The High Court delivered its verdict on January 3, 2026, and the full text was issued on April 5, 2026. The appeal has been registered, and the case is currently awaiting further proceedings.

Sources indicate that after learning of the appeal, the owners of Lumbini Builders sought to influence the outcome by reaching out to Minister Lamsal through multiple channels.