The court is hearing Mr Jaitley's defamation case against Mr Kejriwal for accusing him of financial mismanagement in Delhi's cricket body DDCA, which he headed for 13 years till 2013.
Senior lawyer and former BJP leader Ram Jethmalani, who is representing Mr Kejriwal, pointed out that he had only re-tweeted what the "originator" - journalist Madhu kishwar - had alleged. He also read out other tweets that Mr Kejriwal had reposted, including one by Left leader Sitaram Yechury.
Many people, replied Mr Jaitley, made irresponsible statements on social media. "But when a Chief Minister endorses them, it becomes a grave and serious offence. Even false allegations seem credible. Repetition of a libelous statement gives me a cause of action against the person. Particularly if he has stature to take action against me," he said.
The Finance Minister parried a series of sharp questions from Mr Jethmalani, who also asked whether Prime Minister Narendra Modi had known that he was suing.
Mr Jaitley was also asked if he had any personal enmity towards former cricketer Bishan Singh Bedi, who had made several allegations of corruption against him. He said no but added that Mr Bedi had campaigned against him in the 2014 national election.
This took the line of questioning to elections and Mr Jaitley's defeat in Amritsar in the election.
"So this was the first time you were putting your great reputation at test in a democracy?" Mr Jethmalani sneered.
Mr Jaitley rejoined that an election result is the outcome of "several factors in the constituency and not merely a test of a candidate's reputation."
"Considering that (Mr Kejriwal) lost the same Lok Sabha election in 2014 by three and a half lakh votes..." said the minister, only to be interrupted by Mr Jethmalani and told - "Don't get into irrelevant matters and only answer what I asked."