The Supreme Court, which is hearing CBI Director Alok Verma's plea against the Centre's decision to divest him of powers and send him on leave, on Thursday said the essence of government action must be in the interest of the institution.

A bench headed by Chief Justice Ranjan Gogoi said Attorney General K K Venugopal told it that circumstances culminating in the situation started in July.

Solicitor General Tushar Mehta, appearing for the Central Vigilance Commission, referred to apex court judgements and laws governing the CBI.

The apex court said it was not that the fight between the CBI director and Special Director Rakesh Asthana emerged overnight, forcing the govt to divest the director of powers without consulting the Selection Committee.

The CBI director and the special director were fighting like "kilkenny cats", exposing the country's premier investigating agency to "public ridicule", the government told the Supreme Court on Wednesday while justifying the decision to divest Verma of his duties.

Attorney General (AG) K K Venugopal also told the top court that the government was well "within its right to intervene" and send both officers on leave by divesting them of their powers.

The top law officer asserted that "only the God knows where and how this fight between the two top officers would have ended" if the government would not have taken the action which was aimed at restoring the public faith in the CBI.

The court was hearing pleas of Verma, who is challenging the Centre's decision against him, and NGO Common Cause, seeking a court-monitored SIT probe into allegations of corruption against various CBI officials, including Asthana.