The division bench of Justices P V Hardas and Revati Mohite-Dere was hearing an appeal filed by advocate Ramprasad Gupta, Ramnarayan alias Lakhan Bhaiyya's brother, challenging Sharma's acquittal by the lower court.
The High Court today sought a reply from the government within two weeks. The sessions court last month acquitted Sharma noting that there was no direct or circumstantial evidence against him.
Advocate Gupta, in his appeal, has said that there is enough evidence against the police officer.
On November 11, 2006, a police team picked up Ramnarayan, an alleged aid of gangster Chhota Rajan, from Vashi in Navi Mumbai, and shot him dead in suburban Versova in western Mumbai the same evening. Police then claimed that he died in an encounter.
But his brother, advocate Ramprasad Gupta, moved the High Court alleging that police had murdered his brother. High Court first ordered a magisterial inquiry which concluded that it was a "cold-blooded murder; then the court constituted a Special Investigation Team to probe the case.