The Supreme Court of Nepal has issued an interim order, shielding former Prime Minister Sher Bahadur Deuba and his wife Dr Arzu Rana Deuba from the arrest.
The interim order was issued by a joint bench of Supreme Court Justices Mahesh Sharma Paudel and Nityananda Pandey on Monday. The Supreme Court has pointed out that the procedure was not followed when the permission was obtained from the Kathmandu District Court to arrest the Deuba couple.
"While seeking and granting permission to issue arrest warrants from the Department of Money Laundering Investigation and the Kathmandu District Court, it does not appear that the method and format specified in these legal provisions were followed. Given this situation, it appears that the procedure of the prevailing law was not followed while in seeking and granting permission to issue arrest warrants," reads the Supreme Court order.
Under Section 16, Sub-section (1c) of the Prevention of Money Laundering Act, 2064, a person shall be arrested and detained in accordance with prevailing law if they are suspected of, or involved in, money laundering or terrorist financing offenses, and there are reasonable grounds to believe they might abscond or flee justice, lose, hide, or destroy evidence or obstruct, hinder, or adversely affect the ongoing investigation.
However, the Supreme Court has said that it is necessary and mandatory for the investigating agency and the court hearing the petition to comply with these legal provisions while arresting someone. The Supreme Court has pointed out that the grounds and reasons were not disclosed when requesting permission to issue an arrest warrant from the Department of Money Laundering Investigation in the Deuba couple's case and when granting permission from the Kathmandu District Court.
"Although the prevailing law undisputedly permits lawful arrests for criminal investigations, such actions must not be exercised arbitrarily. There can be no dispute that such an arrest should be made in accordance with the legal procedure established by the prevailing law. In such a case, it is necessary for the investigating agency and the court to always be aware of this matter," the order states.
amend the Money Laundering Prevention Act, 2064, added a proviso to Sub-section (2) of Section 22 of the Act and provides that if it a case deems to be initiated from the investigation conducted by the Department, the government prosecutor will file a case in the Special Court.
Since the jurisdiction to hear the cases of offences investigated by the Money Laundering Investigation Department lies with the Special Court, the permission granted by the Kathmandu District Court on April 7, 2026 before the issuance of the ordinance would automatically become invalid, the order states.
The Supreme Court has issued an interim order to the defendants under Rule 49 of the Supreme Court Rules, 2074 BS, effectively halting the arrest warrants authorized against the petitioners by the Kathmandu District Court on April 7, 2026.
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