Nepal’s Supreme Court on Monday reinstated its parliament, which was dissolved by caretaker Prime Minister K.P. Sharma Oli in May, and ordered that his rival Sher Bahadur Deuba be appointed as Prime Minister.

The move deals a major blow to Oli, who was unable to muster a majority in the House of Representatives and had sought to force a fresh election by dissolving parliament on May 22.

Oli’s move had sparked a fresh constitutional crisis in the Himalayan nation and it marked his second attempt to dissolve parliament in recent months after an initial attempt in December 2020, following a split in his party, was reversed by the Supreme Court in February.

After Nepal’s parliament had been reconstituted, Oli lost a confidence vote on May 10. Before his rivals could stake a claim however, he advised Nepal’s President Bidya Devi Bhandari to dissolve parliament, saying neither he nor Opposition leader Deuba were able to muster a majority and form a new government.

The Opposition decried the move and vowed to challenge it.

On Monday, Supreme Court official Debendra Dhakal said the court had ordered parliament be reconvened within seven days.

It also ordered that Sher Bahadur Deuba be appointed as prime minister by 1700 hours (1115 hours GMT) on Tuesday.

“The court has not left any room for political manoeuvring by the outgoing Prime Minister,” said Bipin Adhikari, a constitutional expert and analyst.

Deuba, 75, a four-times former prime minister who heads the centrist Nepali Congress party, had attempted to form a new government after Oli failed to garner a majority among lawmakers.

Nearly two dozen rebels from Oli’s Communist Unified Marxist Leninist (UML) party were expected to support Deuba at the time.

“The court has saved democracy. Now five political parties will form a coalition government,” Deuba said.

Oli was not immediately available for comment but his aide, Rajan Bhattarai, called the court’s move “a wrong political decision, which will have long term implications on the parliamentary democracy in our country”.

But he added the court’s decision would be respected.

Dozens of Oli’s supporters protested near the parliament building against the decision.

Oli was elected in early 2018 as head of an alliance with the Maoist Centre, a group of former Maoist rebels, promising to end corruption and bring economic development to one of the world’s poorest countries.

But some allies accused him of undermining colleagues and ignoring party decisions in making policies and key government appointments.

In a landmark verdict, Nepal’s Supreme Court on Monday directed President Bidya Devi Bhandari to appoint Nepali Congress chief Sher Bahadur Deuba as Prime Minister by Tuesday and reinstated the House of Representatives for a second time in five months.

A five-member Constitutional Bench of the Supreme Court led by Chief Justice Cholendra Shumsher Rana issued the verdict stating that Bhandari’s decision was an unconstitutional act, delivering a major blow to the veteran Communist leader who was preparing for snap polls.

The bench issued a mandamus to appoint Deuba as the Prime Minister by Tuesday. Deuba, 74, has served as the prime minister on four occasions; first from 1995 to 1997, then from 2001 to 2002, again from 2004 to 2005, and from 2017 to 2018. Currently, he is the Leader of the Opposition in the House.

The court also ordered summoning a new session of the House of Representatives at 5 PM on July 18.

Chief Justice Rana also said that the bench has concluded that party whip does not apply when lawmakers take part in the voting to elect new Prime Minister as per Article 76(5) of the Constitution.

The bench comprising four other senior most justices -- Dipak Kumar Karki, Mira Khadka, Ishwar Prasad Khatiwada and Dr Ananda Mohan Bhattarai -- had concluded hearings in the case last week.

President Bhandari had dissolved the 275-member lower house for the second time in five months on May 22 at the recommendation of Prime Minister Oli and announced snap elections on November 12 and November 19.

Last week, the Election Commission had announced the schedule for mid-term elections despite the uncertainty over polls.

Welcoming the apex court verdict, senior leader of the Nepal Communist Party-UML Madhav Kumar Nepal said that the judgement was commendable.

“The Supreme Court has done a commendable job. This has saved the political system that is in place. Since the court has directly asked to appoint Deuba as new prime minister, we have no role to play now,” he said.

Under Madhav Nepal's leadership, 23 lawmakers of UML had put their signature in favour of Deuba's claim to the prime ministership.

Madhav Nepal also said that Parliament will now take all the decisions. “Parliament has been reinstated. We will now go to Parliament. All the decisions will be taken from Parliament now,” he said. “The court's verdict has also raised moral questions on Oli's actions.”

Meanwhile, Prime Minister Oli's supporters, including youths and students affiliated to the ruling CPN-UML, took to streets here to protest against the apex court's verdict against the 69-year-old Communist leader.

Cadres of the National Youth Force affiliated to CPN -UML gathered in Maitighar Mandal near the court premises chanting slogans against the verdict.

"We are not bound to accept all the orders passed by the Supreme Court, beware!” read a banner carried by the demonstrators.

Oli's confidant and former minister Mahesh Basnet was also present at the protests, according to media reports.

As many as 30 petitions were filed against the dissolution of the House by the President. One of the petitions was filed by the Opposition parties' alliance with the signature of 146 lawmakers demanding reinstatement of the lower house of Parliament and appointment of Deuba as the prime minister.

Nepal plunged into a political crisis on December 20 last year after President Bhandari dissolved the House and announced fresh elections on April 30 and May 10 at the recommendation of Prime Minister Oli, amidst a tussle for power within the ruling Nepal Communist Party (NCP).

On February 23, the apex court reinstated the dissolved House of Representatives, in a setback to embattled Prime Minister Oli who was preparing for snap polls.

Oli, who is currently heading a minority government after losing a trust vote in the House, has repeatedly defended his move to dissolve the House of Representatives, saying some leaders of his party were attempting to form a “parallel government”.