"We are unanimous that quashing part cannot be entertained. We will not quash the FIR... It will not be appropriate to deal with it," a bench comprising justices Gyan Sudha Misra and Madan B Lokur said.
"This prayer cannot be entertained in a petition filed under Article 32 (of the Constitution which provides remedies to enforce fundamental rights)," it said.
Pandey had "provided so-called crucial intelligence inputs" to fellow policemen that Ishrat and three others were LeT operatives and were on a mission to assassinate Gujarat Chief Minister Narendra Modi, Additional Solicitor General (ASG) Indira Jaising, appearing for the CBI, said.
"At the most, I can consider granting you the protection for four to six weeks against the arrest, but my learned colleague (Justice Lokur) has reservations. You satisfy him," Justice Misra said, while fixing the matter for further hearing on June 11.
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"Why are you so agitated? ...Please mind the manner in which you (ASG) are addressing the court," Justice Misra said.
However, at the end of hearing, the ASG sought an apology.
"We don't need an apology. The apology should reflect in the conduct," the judge said.
Pandey, a 1982-batch IPS officer, was Joint Commissioner of Police when on June 15, 2004, Ishrat Jahan, Javed Shaikh alias Pranesh Pillai, Amjadali Akbarali Rana and Zeeshan Johar were killed in an encounter with the Gujarat police on the outskirts of Ahmedabad.