A bench of Justices MB Lokur and UU Lalit asked the CBI director to appoint a team of officers to conduct the probe into the alleged killings.
The court was hearing a PIL seeking probe and compensation in the alleged 1,528 extra-judicial killings in Manipur from 2000 to 2012 by security forces and police.
On April 20, the Army had told the top court that it cannot be subjected to FIRs for carrying out anti-militancy operations in insurgency-prone areas like Jammu and Kashmir and Manipur, while alleging local bias in judicial inquiries conducted against it in these regions, which have tarnished its image.
"In every military operation, the Army cannot be disbelieved. Every judicial inquiry cannot be against the Army. The alleged extra-judicial killing cases in Manipur are not cases of massacre, rather these are cases of military operations," the Centre had told the court.
The bench had also pulled up the Manipur government for not taking action on such alleged fake encounters by armed forces and asked was it "not supposed to do anything".
The Army had told the court that the judicial probes conducted into alleged extra-judicial killing charges were "biased" and slanted against them due to local factors. It had alleged that the district judges, who were locals, had conducted the judicial inquiries into the alleged killings and local factors came in the way of the probe reports which went against the armed forces.
The court was earlier told that there were 265 cases of deaths which have to be examined and there were various reports of the commission of inquiry in which serious allegations have been levelled against armed forces personnel. The Supreme Court had earlier asked the Centre to segregate the cases related to the armed forces from the list of 265 incidents of extra-judicial killings in Manipur.
The Centre had said that out of the 282 cases, which were referred to it for verification, 70 matters were found to be related to the Army and Assam Rifles, while the rest concerned the state police.
In July last year, the top court had directed a thorough probe into the alleged fake encounter killings in Manipur saying the use of "excessive or retaliatory force" by the armed forces or police was not permissible in 'disturbed areas' under the controversial Armed Force Special Powers Act.