Justice Manmohan further said that the chief minister should conduct cross-examination of Mr Jaitley in a dignified manner and in accordance with law.
He said dignity has to be maintained as no person can be subjected to "scandalous and abusive language in the garb of cross-examination."
The court, however, refrained from passing any order against Mr Kejriwal after noting his earlier submission that he had not instructed senior advocate Ram Jethmalani to use any objectionable remarks against Mr Jaitley.
The court was hearing an application moved by the Union minister to expedite the recording of evidence in an orderly and fair manner.
In the defamation case, besides Mr Kejriwal, the five other accused are Aam Aadmi Party leaders Raghav Chadha, Kumar Vishwas, Ashutosh, Sanjay Singh and Deepak Bajpai. They had accused Arun Jaitley of corruption as the President of the Delhi and District Cricket Association or DDCA, a post he had held from 2000 to 2013.
Mr Jaitley, who had denied all the allegations levelled by the AAP leaders in December 2015, had claimed that they had made "false and defamatory" statements in the case involving DDCA, thereby harming his reputation.