The court allowed Chidambaram's family members and lawyers to meet him for half-an-hour daily during the CBI custody.
He was produced in the court on expiry of his four-day CBI custody which was granted to the agency on August 22.
The CBI sought extension of Chidambaram's custody by five days to confront him with certain e-mails and to unearth larger conspiracy.
Solicitor General Tushar Mehta and Additional Solicitor General K N Nataraj, representing the CBI, said there was sufficient ground for extension of Chidambaram's custodial interrogation as he was confronted with a co-accused during the interrogation from August 23-26.
The confrontation with co-accused is not complete, the prosecutors said and placed before the court a file containing e-mail exchanges between the accused.
He was produced in the trial court, hours after the Supreme Court refused to entertain his plea challenging the Delhi High Court order which had dismissed his anticipatory bail plea in the corruption case lodged by the CBI.
"We need five days of custody of Chidambaram as the confrontation with co-accused will continue to unearth larger conspiracy," Mehta contended without divulging the name of the co-accused.
He said investigation of the Enforcement Directorate (ED) is going on simultaneously and CBI has received information from it.
On being asked by the judge as to what CBI has done in last four days, the agency placed before the court relevant records.
The Solicitor General said it was necessary to confront Chidambaram with regard to relevant e-mails and it was absolutely relevant to go into the roots of the issue.
"Certain documents and evidence have emerged which need to be confronted and probed," he argued.
He said the ED has filed an affidavit before the Supreme Court in the money laundering case and has shared evidence with the CBI regarding which further interrogation is required.
Senior advocate Kapil Sibal, representing Chidambaram, opposed Mehta referring to documents filed by the ED.
After speaking to Chidambaram for two minutes, Sibal said in the previous remand application, there was a mention of USD 5 million and not a single document was put to him during these four days.
He said the case cannot be sensationalised, and not a single question with regard to shell companies as also bank accounts has been asked to Chidambaram.
He claimed that questions regarding the e-mails were already asked and Chidambaram has answered them.
"There has been 26 hours of questioning. Still nothing asked on all these issues," he said, adding that he wants CBI to put correct facts before the court.
"At least the process of investigation should be fair," Sibal said, maintaining that the agency should show the documents relied by it in the court.
The Solicitor General said Letters Rogatory (LRs) have been sent to five countries and the investigators are trying to link the transactions of the accused related with the case.
"There is prima facie evidence to link the accused with USD 5 million. We are awaiting response on LRs from the five countries," Mehta told the court.
LRs are a formal request from a court to a foreign court for certain judicial assistance.
Sibal said an accused cannot be put in custody till the investigators get the evidence and asked the agency to show basis of allegation of USD 5 million against Chidambaram.
During the hearing, the court questioned the manner in which the case diary was placed before it. Sibal also objected to the format of the case diary.
To this, the CBI said that the case diary was in loose pages as the format booklet was out of stock.
Chidambaram's wife Nalini and son Karti are also present in the court.
Chidambaram, 73, who was Union home minister as also finance minister during the UPA rule from 2004 to 2014, was arrested by the CBI on August 21 from his Jor Bagh residence. He was earlier produced before the court on August 22 and was remanded to four-day CBI custody.
The CBI had registered an FIR on May 15, 2017, alleging irregularities in the Foreign Investment Promotion Board (FIPB) clearance granted to the INX Media group for receiving overseas funds of Rs 305 crore in 2007 during Chidambaram's tenure as the finance minister.
Thereafter, the Enforcement Directorate lodged a money laundering case in this regard in 2017.
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