The 167-page court order removes Prime Minister Khadga Prasad Oli, who had been running a caretaker government until planned elections.
In May, Oli directed the president to dissolve the House of Representatives, Parliament’s lower house, and announce new elections later this year. The decision was challenged in the Supreme Court by a coalition of opposition parties that said they had the support of a majority in Parliament to form a new government.
The Supreme Court also ruled Monday that the reinstated House of Representatives should meet within a week, when the leader of the main opposition party, Sher Bahadur Deuba, is expected to call a vote of confidence.
There was no immediate comment from Oli’s office or his aides.
Hundreds of Oli’s supporters gathered outside the Supreme Court to oppose the court decision.
“We are here to protest the unconstitutional decision by the Supreme Court, which was interfering with the affairs of the Parliament and its rights,” said one of the protesters, Ramesh Acharya.
The protesters briefly scuffled with riot police who were able to push them back. There were no injuries or arrests.
More protests are likely later in the week because Oli still has significant support among the public.
It is the second time the Supreme Court has reinstated the House of Representatives this year after it was dissolved by Oli.
He had the House of Representatives dissolved in December and called for new elections in April, but that was rejected by the Supreme Court and the lower house was reinstated in February. Oli again had the president dissolve the House of Representatives in May with elections planned for November.
Oli became prime minister in 2018 after the Communist Party of Nepal won a majority of the seats in the House of Representatives. The party, however, has had two splits this year, weakening Oli’s hold on power.