The verdict means that the court has rejected the testimony of Sanjiv Bhatt, a suspended Gujarat police officer, who claimed that as chief minister, Mr Modi had urged officials to look the other way as rioters attacked Muslim neighbourhoods.
"I think justice hasn't been delivered to the families who suffered in 2002 riots. Miscarriage of justice," said Mr Bhatt today.
The court has today accepted a report filed by a Special Investigation Team or SIT appointed by the Supreme Court to look into the litany of allegations leveled against Mr Modi by Zakia Jafri, the 75-year-old whose husband, former Congress MP Ehsan Jafri was set on fire during the riots.
The Special Investigation Team said in 2011 that there was no prosecutable evidence against Mr Modi. Mrs Jafri had challenged that conclusion. The court ruled against her today.
Mr Bhatt was not invited to testify for the Special Investigation Team. The four-member group, headed by former CBI director RK Raghavan, said that Mr Bhatt had "forged evidence to malign the state government."
He was suspended in 2011 by the state government for refusing to show up to work and allegedly misusing his official car.
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