The apex court was hearing the appeal filed by Setalvad and her NGO, Citizen for Justice and Peace (CJP), against a decision of the Gujarat High Court upholding a magisterial court order for a probe against Pathan.
"It is a serious offence whosoever has done it. Either they (Setalvad and her NGO, Citizen for Justice and Peace) are wrong or Pathan is wrong. We will look into it," a bench of justices Arun Mishra and Amitava Roy said.
However, Additional Solicitor General Tushar Mehta and senior advocate Mahesh Jethmalani, appearing for the Gujarat government and Pathan respectively, said Setalvad and her NGO have no locus standi in the criminal case as they were not parties to the matter either in the high court or the trial court.
After hearing the matter partly, the bench posted it for hearing to August 21, saying it would examine the matter on the question of law.
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When Sibal sought more time, the bench said it will "vacate the stay on the high court order and allow the investigation to continue and list the matter after six months".
At the outset, the bench wanted to know from Sibal about Pathan who had fallen out of favour with Setalvad. She had fired him from her NGO where he had worked for six years from 2002.
The senior advocate, who replied to a volley of questions from the bench, said he was a field worker in the NGO, but after his ouster he has been filing applications in various riots cases with a political motive in mind.
During the trial in the case, the additional sessions judge had on December 3, 2010 rejected the application of Pathan seeking to be examined as a court or prosecution witness to "prove that some of the witnesses and victims had falsely implicated him in fabricating the evidence".
He had said he would be an important link to throw light on how the victims and witnesses were tutored, cheated and made to sign false affidavits by Setalvad in the name of "interest of community".
These relate to false evidence, giving or fabricating false evidence with the intent to procure conviction of capital offence or imprisonment for life or imprisonment for seven years or upwards and using as true such declaration knowing it to be false among others.
Thereafter, the registrar filed a criminal case/complaint against Pathan and others in metropolitan magistrate court in Ahmedabad which on January 10, 2011 directed the assistant commissioner of police, Ahmedabad to inquire and investigate the matter and submit a report.
Pathan had not challenged any of the findings and observations made against him that a prima facie case was made out for the various offences under the IPC.
The trial in the Naroda Gam case is at the final stage.