A bench of justices A K Patnaik and J S Khehar questioned as to why the magistrate passed such extensive order, which on some issues was not in conformity with the evidence in the case.
"We have no doubt on magistrate's power. But if the magistrate goes on to give big order, then see what's the damage being done. We have to draw guidelines on up to what extent a magistrate can go while passing orders," the bench said.
"The magistrate is not supposed to do such exercise. He must be bound by the procedural law and evidence in the case," it said.
The CBI, however, justified the order saying there is noting wrong in giving the reasoning for dismissing the closure report in the case and to prosecute Talwars.
"The magistrate has to give reasoning for taking decision and the order was passed on the basis of findings given by the investigating agency," said senior advocate Siddharth Luthra, appearing for the agency.
The court also pointed out that such extensive order might have been passed as the case was under the media glare. "If the court is to justify to media on what is being done, then it is the end of the rule of law," the bench said adding that "the order says one thing but witnesses say other things".
Fourteen-year-old Aarushi was found dead with her throat slit at her Noida residence on the night intervening May 15 and 16, 2008, while Hemraj's body was recovered from the terrace of the house the next day.
Aarushi's mother is presently in judicial custody, while her father Rajesh Talwar is out on bail. The case for their trial in the twin murder case is pending at a Ghaziabad sessions court.
The apex court bench earlier had termed as "premature" the arguments of Nupur Talwar for quashing of proceedings against her on the basis of alleged lacunae in evidence in the twin murder case.