In a relief to Nepal's Central Bank Governor Maha Prasad Adhikari, the Supreme Court on Friday upheld its earlier interim order that stayed the government's decision to suspend him and allowed him to return to work.

Governor Adhikari was suspended by a Cabinet decision on April 8 for allegedly failing to perform his duty after he had some differences with Finance Minister Janardan Sharma.

A two-member joint bench of the Supreme Court on Friday issued the verdict in favour of Governor Adhikari after three days of continuous hearing on a writ petition filed by him.

The court also questioned the formation of the probe committee set up by the government to inquire into the alleged irregularities by the Governor.

With the issuance of the verdict, the way has been cleared for the Governor to return to his duty. Last week, in response to a writ petition filed by Governor Adhikari, who was suspended by the government, a single bench of the court had issued a short-term interim order urging the government not to implement its decision to suspend Governor Adhikari.

The government had suspended him amidst his tussle with Finance Minister Sharma, saying he did not perform his duty even as the country was heading towards a big economic crisis.

Adhikari was appointed as Nepal's 17th governor on April 6, 2020 under the previous regime headed by former prime minister K P Sharma Oli. This was only the second instance that a sitting governor, who enjoys a five-year tenure, was suspended.

According to sources, differences had emerged between Adhikari and Sharma in the wake of the dwindling forex reserves and the current state of Nepal's economy.

Earlier this month, the NRB announced a ban on the import of vehicles and other luxury items, citing liquidity crunch and declining foreign exchange reserves.

Since July 2021, Nepal has seen a decline in forex reserves due to the surging imports, declining inflows of remittance and meagre earnings from tourism and exports.