Bamdev Gautam was made Home Minister in the cabinet of Lokendra Bahadur Chand, the leader of the Rastriya Prajatantra Party parliamentary party, who became Prime Minister with the support of the CPN-UML. Because, he had staged a kind of rebellion in his own party, UML, to make Chand the Prime Minister.

Bamdev was considered very powerful in the cabinet. Even when his own party's central member Ishwor Pokharel made written allegations of buying MPs to come to power, keeping MPs in hotels and providing them with beauty products, and committing financial scams by misusing party funds, Bamdev did not stop trying to make Chand the Prime Minister. That is why he was made Deputy Prime Minister and Home Minister in the Chand cabinet formed on Chaitra 29, 2053.

Bamdev had removed Inspector General of Nepal Police Achyut Krishna Kharel from his post on the 24th day of becoming Home Minister. Gautam had removed Kharel 36 days after becoming IGP. He not only removed the IGP's badge, but also started a unique tradition by transferring him to the head of the National Investigation Department. Kharel was transferred to a position where there was no post and Additional Inspector General of Police Dhruv Bahadur Pradhan was given the rank of Inspector General of Nepal Police. Govinda Thapa, Director General of the Investigation Department, was transferred to the Special Police Department.

Bamdev broke the established tradition of the police and called Pradhan to his office and gave him the rank insignia (badge). At that time, it was customary for the retiring IGP to give the rank insignia to the newly appointed IGP. Breaking that tradition, Home Minister Gautam himself gave Pradhan the badge and gained attention in political circles. After giving Pradhan the badge, Gautam kept him in his office for more than an hour and held a secret meeting. There was widespread criticism that there was no provision for transferring the incumbent IGP to the post of Special Officer of the National Investigation Department, which was created under the Special Service. Some had also argued that Gautam had politically interfered in the police by sending a person from one service to another.

The letter given to Kharel during his removal from the IGP post mentioned that he had been appointed as the head of the National Investigation Department. The letter was silent on the post of IG of the police. At that time, Gautam's removal of IGP Kharel had become a big 'issue'. After being removed from the IGP post, Kharel had also sent a message to the palace to meet King Birendra. After being removed, Kharel had taken a 7-day leave.

Kharel's legal challenge

Kharel had approached the court to reinstate his post, saying that he had been removed illegally. He had filed a writ in the Supreme Court challenging the government's decision to remove him from the post and raising legal questions. Kharel had said in his writ petition, ‘There is no legal provision for transfer from one service to another in those services formed on the basis of different acts due to the difference in the nature of the service. The government has not decided to transfer. The government has not changed from one service to another. The government has no legal basis to change a person from one service to another without the consent of the person.’

He said in the writ petition that the Home Minister has given the rank insignia to the opposition chief, contrary to the dignified tradition of the police service, where the retired Inspector General always gives the rank insignia to the newly appointed Inspector General. His intention against me has also become clear.’ He had demanded an interim order be issued in the name of the opposition until the final decision of the petition is taken. While the government was preparing for local elections, there was a widespread transfer of police chiefs and chief district officers in all districts. The opposition was afraid of increased government interference in the local elections.