Chidambaram said the encounter in Delhi's Batla House area took place before he assumed the charge as Union Home Minister in 2008. He said he personally went through the evidence and talked to investigators after one of his colleagues suggested that it might not be genuine.
"I spent a lot of time pouring over the papers and talking to officers involved. And I was satisfied that it was a genuine encounter. Unfortunately, we have lost a brave police officer. It was also unfortunate that some of the suspects have escaped. I am told that the lone captured terrorist was held guilty. I am glad that the police have been able to prove their case," he told reporters.
His comments came hours after a Delhi court convicted the lone suspected IM operative Shahzad Ahmad in the 2008 Batla House encounter case for murdering a police inspector and assaulting other officers.
Chidambaram said even the National Human Rights Commission as well as the (Delhi) high court too had held that there was no reason to doubt the genuineness of the encounter.
"Today, I think the trial court has held that it was a genuine encounter and found the accused guilty," he said.
Asked about the statements of some of the Congress leaders, including Digvijay Singh, doubting the genuineness of the Batla House encounter, the finance minister said they were reflecting the views of families who were affected or the people of that area.
"I know that emotion was quite high. The families and residents of the area felt very strongly. I think my colleagues were simply reflecting the views they had heard. I do not think they had independent access to materials. But I had access to the materials and I was quite satisfied that it was a genuine encounter," Chidambaram said.
Asked about the requests made by the family members of two of the accused, who could flee the spot, Chidambaram said parents of the two of the people who are absconding met him when he was the Home Minister.
"I told them that if you genuinely believe that your sons were innocent, they should ask them to appear before police. And I had given my words that after interrogation, if we were satisfied that they (the two absconders) were not involved and they had a good alibi that they were not in the scene, I said we would not arrest them and let them off.
"But, unless they appear for interrogation, how do I help them. I told the two fathers that they should persuade their sons to appear before the police. But I do not know what did they do but the two (absconders) did not appear before police."
Chidambaram said he told the parents that according to his judgement, it was a genuine encounter and the trial court should come to a conclusion.
The finance minister also dismissed the criticism of BJP on the issue as well as in case of the Ishrat Jahan alleged fake encounter saying it was the habit of the principal opposition party to criticise what the ruling Congress says.
"If we say white, the BJP will say black. If the Congress will give some other colour, the BJP will give another colour. I don't think that is relevant. What is relevant is that the police has been able to prove their case against one accused they were able to apprehend. I think the accused has the right to appeal and he should use the right of appeal and after that the court will review the evidence again," he said.
With a Delhi court holding the controversial Batla House encounter as genuine, Congress said all sections should accept the verdict and guard against politicising the issue so that the morale of police forces is not undermined.
Congress spokesman Abhishek Manu Singhvi sought to downplay the statements made by his party colleague Digvijay Singh questioning the genuineness of the September 2008 encounter, saying individuals could have commented in a "surcharged atmosphere" but those should not be given credence now.
"Nobody has been as clearest and strident as Congress party in condemning fake encounters wherever they have taken place. But after the judicial verdict has come after going through all the facts, all sections of the society should accept it," he told reporters.
Noting that stakeholders have the right to challenge the trial court verdict in an appellate court, he emphasised the judgement was "based on facts" and the encounter should not be politicised.
"Otherwise, you will be undermining the fabric of the democratic society and our judicial systems and will be speaking irresponsibly," Singhvi said.
"It is important not to undermine the morale of those who are policing us," he said.
When pointed out that Digvijay Singh had raised questions on the genuineness of the encounter in which a Delhi Police Inspector was killed, Singhvi said the Congress had been maintaining that his "views" should not be treated as the party line.