Maharashtra government and Adarsh society had last month filed affidavits in the high court stating that CBI has no jurisdiction to probe the matter as the land where the 31-storey building stands belongs to the state government.
"We will first deal with the jurisdiction issue," a division bench of Justices S A Bobade and Mridula Bhatkar said.
The state government in its affidavit said it had not consented for CBI probe in the matter.
"The judicial commission set up to probe the alleged scam has submitted that the land belongs to state government hence local police has jurisdiction to probe the matter," government had said in its affidavit.
The Defence Ministry today filed an application in the high court raising objection to the state government's claim that CBI had no jurisdiction to probe the matter.
"Dispute over the ownership of the land is not yet over. The commission's report is not binding on either the court or the government. The Ministry of Defence has not accepted the report. The report of the Commission is completely flawed, contrary to the evidence on record and is made on patently incorrect interpretation of law," the defence ministry said.
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The defence affidavit termed Maharashtra government's objection to CBI probe as "illegal and malafide".
The bench today directed Adarsh society to file its reply to defence ministry's application by August 3.
The court was hearing a batch of public interest litigations filed by social activists Simpreet Singh and Pravin Wategaonkar seeking monitoring of the investigation by the high court. (MORE)