Mr Deuba is the most senior politician to be jailed by the commission.
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Nepal's Supreme Court has asked the country's corruption commission to explain why it jailed former Nepalese prime minister, Sher Bahadur Deuba.
Mr Deuba and five others were convicted in July by the country's corruption commission, which King Gyanendra set up after seizing direct power this year.
The commission sentenced the former prime minister to jail for two years on charges of embezzlement.
Mr Deuba has called the commission illegal and unconstitutional.
Access road
The supreme court was responding to a petition which challenged the convictions of Mr Deuba and another ex-minister, Prakash Man Singh.
The Royal Commission on Corruption Control now has to furnish its reasons for holding the two men in detention and later taking action against them.
Mr Deuba was found guilty for wrongdoing over a contract to build an access road for a controversial multi-million dollar water project.
The commission said that the contract for the construction of an access road of the Melmachi water project had been improperly awarded to an unqualified bidder, causing an extra cost of $5m.
The Melmachi drinking water project is funded by a number of donor agencies.
The biggest donor, the Asian Development Bank, ruled out corruption following a separate investigation.
'Political vendetta'
The court has said it will go into the details of the case after hearing from the commission.
"The Chief Justice of the Supreme Court, Dilip Kumar Paudyel, ordered the Royal Commission for Corruption Control to explain within seven days the reason why the ex-premier and his party colleague has been detained," a court official was quoted by the AFP news agency.
The US has criticised the jailing of the former Nepal premier, saying it was another setback for democracy.
The country's major opposition parties say the commission is part of a political vendetta.
However, the commission members deny they have a political agenda.
King Gyanendra seized direct control of Nepal on 1 February, sacking Mr Deuba and his government and promising to root out corruption and end a Maoist rebellion.
Several members of the king's own handpicked cabinet are themselves facing corruption-related indictments in the Supreme Court.