CBI Director Alok Verma has been reinstated as the probe agency's chief by the Supreme Court

Highlights Alok Verma can't take major policy decisions for now, says top court

High-powered selection panel to decide on his status in a week

The CBI chief and his deputy were sent on leave in October

Exiled CBI chief Alok Verma was reinstated by the Supreme Court today, three months after the government divested him of his powers and sent him on forced leave in a midnight swoop. Alok Verma can go back to his office but cannot take any major policy decisions for now, the top court said, asking a high-powered selection committee comprising the Prime Minister, the Leader of Opposition and the Chief Justice of India to meet and decide on his status within a week.

It also means only partial relief for Alok Verma, who had challenged the government's October 23 order arguing that the CBI chief has a fixed two year term and can be removed only by the high-powered committee.

Mr Verma's term ends on January 31.

In election season, the top court's ruling is seen as a huge setback for the BJP-led government, which has been accused by the opposition of manipulating the Central Bureau of Investigation and misusing it against rivals.

Alok Verma and his deputy Rakesh Asthana, the CBI's top two officers, were both sent on leave in October in the middle of a bitter feud between them

"The legislative intent of insulating the CBI director is manifest," said the three judges who set aside the government's move unanimously. The appointment of M Nageswara Rao, joint director, as interim chief has also been set aside.

Finance Minister Arun Jaitley said the government had sent the two senior officers of the CBI on leave on the recommendation of the CVC (Central Vigilance Commission). "This action was taken perfectly bonafide as there were cross-allegations made by both the officers, and in accordance with recommendations of the CVC. The government felt that in the larger interest of fair and impartial investigation and credibility of CBI, the two officers must recuse themselves," Mr Jaitley told reporters outside parliament.

Opposition parties grabbed the judgement as vindication of their criticism that the government was "dictatorial".

"We welcome the Supreme Court's verdict lambasting the government against their illegal removal of Alok Verma as CBI Director," said the Congress, which alleges that Mr Verma was removed because he intended to launch a probe into the Rafale jet deal.

Arvind Kejriwal tweeted that the court ruling was a "direct indictment" of Prime Minister Narendra Modi.

SC reinstating CBI director Alok Verma is a direct indictment of the PM. Modi govt has ruined all institutions and democracy in our country. Wasn't CBI director illegally removed at midnight to stall the probe in Rafale scam which directly leads to PM himself? - Arvind Kejriwal (@ArvindKejriwal) January 8, 2019

Alok Verma and his deputy Rakesh Asthana, the CBI's top two officers, were both sent on leave in October in the middle of a bitter feud between them. Around 2 am, Nageswar Rao took charge and signed off on the transfer of half-a-dozen officers on Mr Verma's team.

Mr Asthana remains on forced leave. There is also no decision on the transfers.

During hearings, the government had argued that it had no option but to send both officers on leave since they were fighting like "Kilkenny cats". The Central Vigilance Commission, whose recommendation had spurred the government order, also defended the decision, saying "extraordinary situations need extraordinary remedies."

The Supreme Court had also asked Mr Verma to respond to a vigilance report on him in a sealed envelope. The vigilance inquiry followed corruption charges swapped by Mr Verma and Rakesh Asthana. The CBI Director was accused by Mr Asthana of taking bribe from a Hyderabad-based businessman being investigated by the agency. Mr Verma has accused Mr Asthana of the same crime.