Police informed that Lama was held on charges of perpetrating criminal activities. 

Last year in October, Lama was released after posting the bail amount of Rs. 30 million as sought by the Special Court. Lama was serving jail term in connection with fraud and amassing millions of properties through illegal means . He was accused of amassing Rs 270 million through illegal means .

Lama, a central leader of the Madhesi Janadhikar Forum-Loktantrik led by Bijaya Kumar Gachhadar, had also filed his candidacy from Kavre-2 in the second Constituent Assembly election.

The Special Court on July 19 had sent Lama to judicial custody after he failed to post the bail amount set by the court.

The Department of Money Laundering Investigation on May 19 had filed separate cases against five gangsters, including Lama, on charges of amassing millions of rupees through illegal means .