A bench headed by Chief Justice Dipak Misra said it would deliver a judgement whether in an appeal by way of a special leave petition (SLP), the top court was entitled to see any documents relating to the investigation.
The curious turn of events took place as CBI's counsel and Additional Solicitor General Tushar Mehta intended to show the documents to the top court, while senior advocate Kapil Sibal, representing Mr Karti, raised serious objections over it.
The CBI FIR, lodged on May 15, had alleged irregularities in Foreign Investment Promotion Board (FIPB) clearance to INX Media for receiving overseas funds to the tune of Rs 305 crore in 2007 when Mr Karti's father was the Union Finance Minister.
Mr Sibal told the bench, which also comprised Justices AM Khanwilkar and DY Chandrachud, that documents cannot be filed by CBI in the apex court like this in an SLP that had arisen out of an order of the Madras High Court on a writ petition.
He argued that if the documents were to be filed and seen by the bench, then Mr Karti was also entitled to get them.
He said even if the documents were to be seen by the apex court, these materials cannot be relied upon by the court for adjudicating the validity of the look out circular (LoC) issued against Mr Karti.
Countering these submissions, Mr Mehta said documents could be filed by the CBI and seen exclusively by the court without giving it to the other side as it was part of the case diary.
"We will hear first and deliver a judgement whether in an SLP which arises from an Article 21 writ petition before the high court, we are entitled to see anything which has taken place during the investigation," the bench said.
The court has fixed the matter for hearing on November 1 and asked Mr Sibal and Mr Mehta to file their written notes on the issue.
At the outset, Mr Sibal argued that nothing stated in the case diary was an evidence and this was not a system that the CBI would hand it over to the top court like this.
"These are not facts of which the Supreme Court can take note of. These are not evidence," he said, adding, "this is a very serious issue".
He said Mr Karti has a fundamental right to travel abroad to get his daughter admitted at the Cambridge University.
He told the bench that Mr Karti has said it does not matter if his daughter was not admitted to the university but the court would have to decide this important issue.
"First, we will decide whether we can look into it (documents)," the bench said and also permitted the CBI to file an affidavit in the matter.
CBI had yesterday claimed in the court that the documents provided in a sealed cover contained "contemporaneous records" about Mr Karti's foreign bank accounts and properties.
Mr Sibal had rebutted the submissions and said the issue before the court was about LoC and not about bank accounts.
The agency had earlier claimed that Mr Karti had "tampered" with evidence relating to the case against him during his visits abroad in the months of May, June and July this year.
The top court is hearing CBI's appeal challenging Madras High Court order staying the government's LoC against Mr Karti.
On September 1, the CBI had told the top court that there were "good, cogent" reasons for issuing the LoC against Mr Karti.
On August 18, the court had asked Mr Karti to appear before the investigating officer at the CBI headquarters here for questioning in the case.
Before this, the apex court had said that Mr Karti would not be allowed to leave India without subjecting himself to investigation in the case. The court had then stayed the high court order putting on hold the LoC against Mr Karti.
The FIR was registered on May 15 before the special CBI judge here and the registration of the case was followed by searches at the residences and offices of Mr Karti and his friends the very next day.