Gupta's counsel Aman Lekhi and Dikshit's counsel Mahmood Pracha told Justice Kailash Gambhir that the parties have not been able to compromise the case and hence, the matter be decided by the court itself.
The court then listed the matter for February 19 to hear final arguments.
The court earlier had asked the two leaders several times that they should settle their dispute amicably.
Dikshit had filed a suit against Gupta after he refused to tender a "public apology" for putting up hoardings across the city accusing Dikshit's government of "openly looting" thousands of crores of rupees by misrepresenting facts on power tariff and conniving with the private discoms.
The petition filed by the chief minister had stated that the BJP, under the leadership of Gupta, "tried to defame her in public by putting up hoardings across the city accusing her government of corruption in fixing new power tariff in connivance with the private power distribution companies."
Gupta's counsel Lekhi, however, had earlier told the court that his client's the action taken by his client was not intended to malign any individual but was directed against the government.
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Dikshit had demanded a token Rs 1 as compensation for the alleged damage caused to her reputation by Gupta.
The advertisements which were put up in hoardings in June 2010 had claimed that the Delhi Electricity Regulatory Commission (DERC) was going to recommend reduction in power tariff, but the chief minister "came in the way."
Dikshit had filed the suit after Gupta refused to tender a "public apology for the slander", as demanded by her.