The apex court's remark came after a bench of Justices P C Ghose and Amitava Roy was informed by Solicitor General Ranjit Kumar that the Prime Minister has met Punjab Chief Minister Amrinder Singh and his Haryana counterpart Manohar Lal Khattar on the issue on April 20 and there were points and counter-points from both the parties.
"We have no issues if the matter is settled but there is a decree of this court and it should be taken into account during the talks," the bench said.
It said the "dignity of this court and dignity of decree needs to be respected. We don't wish to say anything further on the talks".
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Senior advocate R S Suri, appearing for Punjab, said the Prime Minister met the two chief ministers and certain facts have come up which need to be ascertained.
Terming it as an emotive issue for both the parties, he said some time needs to be given as talks on it were yet to be considered as over.
"The matter has been pending before the bench since November last. There are already two decrees of the court and we are anxiously waiting for these to be executed by the plaintiff (Punjab)," he said, adding that the matter must be heard and decided.
To this, the bench said, "since holidays are coming and during this period if the matter is settled through talks then it is okay or we will proceed considering nothing fruitful has come out".
The apex court told the counsel for Haryana that it understood the anxiety of the state but he should also understand the situation at the ground-level on other side.
Divan said they have confidence in the court and that is why they are before it.
The apex court then posted the matter for further hearing on July 11.
It had on April 12 said the court does not want to "shut the door" to an amicable settlement of SYL canal dispute as the Centre has expressed keenness to find a solution, saying it had convened a high-level meeting of Punjab and Haryana.
While giving the Centre a chance to explore possibilities of an out-of-court settlement to the water dispute between the two neighbouring states, the top court made it clear that it would proceed with the hearing, if the bid failed.
Earlier, the Centre had made it clear that it was not taking any sides in the dispute between the northern riparian states which also included Rajasthan, Jammu and Kashmir, Himachal Pradesh and Union territory of Delhi.
A five-judge bench, while answering the Presidential Reference on November 11, 2016, had held that the Punjab Termination of Agreement Act, 2004 was unconstitutional as it negated the effect of apex court judgements of 2002 and 2004. The court had favoured the construction of SYL canal.
Punjab had contended that the apex court order was not binding as it was given under its advisory jurisdiction and the Punjab law still stands.
The apex court had on November 30 last year directed status quo on SYL canal and appointed Union Home Secretary, Chief Secretary of Punjab and Punjab DGP as court receivers of the lands, works, property and portions of the canal.
The court had also thwarted Punjab's attempt to wriggle out of SYL water sharing pact, saying it cannot "unilaterally" terminate it or legislate to "nullify" the verdict of the highest court.
Haryana constructed the portion of SYL canal in its territory. However, Punjab, after the initial phase, stopped the work, leading to spate of litigations.
In 2004, the Congress government in the state came out with the Punjab Termination of Agreement Act with an intention to terminate the 1981 agreement and all other pacts relating to sharing of waters of rivers Ravi and Beas.
Punjab had challenged the verdict by filing an original suit that was rejected in 2004 by the Supreme Court which asked the Centre to take over the remaining infrastructural work of the SYL canal project.
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