A dialogue of "Adipurush", in which Sita is mentioned as "India's daughter", had led to the ban on all Hindi films, which was announced by Kathmandu Mayor Balendra Shah.
Shah on Thursday said he is ready to face any punishment but will not allow the film's screening as the matter pertains to "Nepal’s sovereignty and independence".
A single bench of the Patan High Court judge Dhir Bahadur Chand issued a short term order, stating that the screening of films that have acquired permission from the censor board should not be stopped.
Bhaskar Dhungana, president of the Nepal Motion Picture Association, told media persons that the petitioners are waiting for a written order from the court.
"Now we will screen all movies passed by the censor board," he said.
"Adipurush" and other Hindi films were banned in Nepal on Monday following a controversy over its dialogues, including the mention of Sita (played by Kriti Sanon) as "India's daughter".
Sita, also referred to as Janaki, is believed by many to have been born in Janakpur in southeast Nepal.
In a Facebook post, Shah said that he would not "abide by the court’s order".
"The film's writer said that Nepal was under India,this clearly shows India’s ill intention. To term this as a stunt by the Nepal government and to issue an order by the court in favour of screening the movie means, to accept that Nepal was once under India’s rule, the court and the government are both the slaves of India,” he said in the post.
"I am ready to face any punishment for this but the movie won't work and won't be allowed to run," he added.
Following Kathmandu Mayor’s decision to ban "Adipurush" in Kathmandu, Dharan Mayor Harka Sampang and Pokhara Mayor also followed the suit, which ultimately led to halting of the screening of "Adipurush" across Nepal.
Produced by T-Series, Retrophiles and UV Creations, the film also stars Saif Ali Khan, Sunny Singh and Devdatta Nage.