Rahul Gandhi had refused an earlier suggestion that he apologise and settle the case.
The court said: "… the purpose of law is that people obey law. Peace and harmony should prevail rather than chaos." To an argument that the defamation law defied freedom of speech, the court said: "Freedom is not crippled or cut. Every day, a writer, politician will speak something. The purpose of the law is not to turn people into litigants." RSS spokesperson M G Vaidya said: "The Congress had been consistently trying to spread lies and baseless allegations about RSS. Today's (Tuesday's) ruling has exposed the Congress."
Gandhi had been sued by an RSS activist during the 2014 national election campaign, after he accused the organisation of "killing Gandhi".
In November, Gandhi had refused to express regret for his comments. The Congress vice-president's counsel Kapil Sibal, told the court that his client would prefer to fight his case. He even attended a court hearing in Maharashtra's Bhiwandi town - where the defamation case was filed - though the Supreme Court had said he need not attend.