Granting them yet more time, Justice Kailash Gambhir asked the counsel for both the parties to sit together on May 19 in the office of senior counsel Aman Lekhi, who is appearing for Gupta, to resolve the dispute.
The court's direction came after it was informed that both the leaders were busy due to civic polls in Delhi last month and they were not able to instruct their counsel for the settlement.
This is the third time that the court has granted more time to both parties to resolve the issue. Earlier on March 15 and April 24, the court had asked the counsel to sit together and persuade their clients to settle the dispute.
The court was hearing a defamation suit filed by the chief minister against the BJP leader for allegedly making unsavoury remarks against her.
Earlier, BJP's Delhi unit president Vijender Gupta had filed an application seeking dismissal of the case saying that fair criticism of the government was part of a democracy.
"The statement was made against the government and nothing personal was said against the chief minister," senior counsel Aman Lekhi had said during an earlier hearing.
The court has now fixed May 29 as the next date for hearing.