We study N=2 supersymmetric quantum mechanics of a charged particle on sphere in the background of Dirac magnetic monopole. We adopt CP(1) model approach in which the monopole interaction is free of singularity. In order to exploit manifest U(1) covariance in the superspace formalism, we introduce a gauge covariant chiral superfield which is annihilated by the gauge covariant superderivative instead of the usual superderivative. We carry out the quantization of the resulting system and compute the quantum mechanical spectrum. We obtain the condition for the spontaneous breaking of supersymmetries explicitely in terms of the monopole charge and a parameter characterizing the operator ordering ambiguity. We find that the supersymmetry is spontaneously broken unless a certain combination of theses quantities satisfies some quantization condition.

11 pages, typeset in Revtex4 format, 1 reference added for Sect 1, some minor corrections