..."We had to put in a lot of pressure to have the third gender counted in the census," said gender minority rights activist Sunil Babu Pant.
"It was only after we said that we would go to court that the officials agreed to include the third gender as a category."
If the case had gone to court, it would likely have been upheld thanks to a landmark 2007 Supreme Court ruling that directed the state to end discrimination based on sexual orientation and gender identity and decriminalize "unnatural sex."
It also decreed the issue of citizenship certificates that clearly indicate an individual's choice of gender identity.
Citizenship certificates, which work as national identity papers, are needed in Nepal to open a bank account, own property, secure a job and get a passport among other things.
"The court also directed the government to form a committee to study what kind of laws can be made for same-sex marriage or civil union," said Hari Phuyal, a human rights lawyer who made the lead argument in the case.
"Nepal's 2007 ruling was an inspiration to even India and the ruling document was studied by the Delhi High Court [of India ] when it decriminalized sodomy last year," he said.
Pant, Nepal's first openly gay lawmaker, described the ruling as "very satisfying," but said its implementation was an "extremely slow and painful process."
His claim is underscored by the fact that Nepal's Ministry of Home Affairs is yet to direct the country's 75 administrative districts to issue citizenship certificates that indicate gender identity.
"Local authorities did not know about third gender and they were afraid that they would lose their jobs if they gave such a citizenship," said Buduja, who last month became only the second person in the country to obtain a citizenship certificate indicating gender.
Pradeep Khadka, of sexual and gender minority rights advocacy group Blue Diamond Society -- founded by Pant nearly a decade ago -- say delays in fully enforcing the 2007 ruling represent a struggle between conservative and liberal elements in Nepalese society.
Though discrimination persists, there is progress. The government is also finalizing a list of discriminatory laws that need to be changed so that gender minorities can enjoy the same rights as others, including inheritance rights...