In a curative petition seeking recall of the verdict of July 8 last year as well as the order dismissing the review plea, the government said that the action taken by the army during such operations "cannot be put to judicial scrutiny".
Officers and men in the armed forces, engaged in counter- insurgency operations, are required to be given requisite measures of protection, it said.
Attorney General Mukul Rohatgi, appearing for the Centre, mentioned the issue before a bench headed by Chief Justice J S Khehar and said it was a "very, very important matter" having far-reaching consequences as the armed forces were engaged in such operations regularly in areas in the north-east as well as in Jammu and Kashmir.
The bench also told Rohatgi, "Either you bring it within the parameters of a curative petition and if you do not bring it within the parameters of a curative petition, we cannot help you."
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When the attorney general referred to counter-insurgency operations in the north-east and J-K, the bench said, "Okay. We will see it."
In its petition, the Centre has said there is "error apparent on the face of record" in the verdicts passed by the apex court and it has "hampered" the ability of the armed forces to respond to "insurgent and terrorist situations".
"If the position maintained by impugned order continues, it may, one day, be well-nigh impossible to maintain peace and security. The Indian Army has to, in given circumstances, take quick decisions which cannot be dissected later on like an appeal against the ordinary murder appeal," it said.
"The army and Assam Rifles have paid a heavy price for their diligence and sincerity and have lost 928 personnel at the hands of insurgents with 1,463 injured while operating in Manipur from 1990 to 2015," it said.
The plea said that the apex court's directions, including that allegations of use of "excessive and retaliatory force" by the armed forces in Manipur must be probed, have far- reaching ramifications on the security and integrity of the country, especially in areas which are plagued with constant militant and insurgency activities.
Counter-insurgency operations are combat operations which are inherently dangerous and mostly unpredictable and security personnel cannot be prosecuted for taking part in such operations, it said.
The Centre also said that the apex court had proceeded on an incorrect premise that there "is no war-like situation" in Manipur as the armed forces are confronted with secessionist and terror groups which are waging war against India.
"This court ought to have taken into account the complexity and the reality of the conduct of military operations and tactics especially while combating terrorists," the curative plea said.
It said that judicial review of military operations will have damaging consequences for operational effectiveness and may erode the fighting power.
The apex court's verdict last year on investigating the role of the armed forces in encounter cases had come on a petition alleging that the forces were misusing the protection under the AFSPA in Manipur during anti-militancy operation.
The court had also held that use of "excessive force" by the armed forces or police was not permissible in 'disturbed areas' under the draconian AFSPA.