India's top court Wednesday set up an independent panel to probe allegations that a foreign-origin spyware was used by Prime Minister Narendra Modi's government to snoop on opposition politicians, senior officials, activists and journalists.

The snooping scandal surfaced in 2019 when social media platform WhatsApp's parent firm Facebook filed a lawsuit in a US court, alleging that Israel's NSO Group developed Pegasus software and used it to target prominent Indian citizens during the last general election.

A three-judge bench of the Supreme Court, led by Chief Justice NV Ramana, gave the order
to "probe the falsity and discover (the) truth" in the wake of a number of petitions seeking an investigation into the allegations of phone-hacking by a foreign firm.

"The alleged violation of privacy needed to be examined as it affected the rights and freedom of people. Such technology may also have a 'chilling effect' on press freedom in India," the Chief Justice said, while appointing a retired top court judge to head the panel.

During the hearing of the case, the federal government filed a "limited affidavit", claiming the allegations of phone hacking had no substance. "No government will make public what software it is using to allow terror networks to modulate its systems and escape tracking."

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However, the court came down heavily on the federal government for trying to play the national security card. "The state cannot get a free pass every time national security is raised. In the task of upholding fundamental rights, the state cannot be an adversary."

The judges also said that the government got multiple chances to respond to the court's notices on the allegations. "A vague denial from the government is not sufficient," the court said, giving the panel two months to submit its report in the case.

India's main opposition Congress party welcomed the Supreme Court's order.

"If the PM of the nation colluded with another nation and attacked its own citizens -- which included the Chief Justice, former PMs and other Chief Ministers, leaders of opposition parties, then this is an attack on the nation," Congress leader Rahul Gandhi said.

"Did the other nation have all this data? That is a very important question. Even if this data was on the Prime Minister's desk, then that too is totally criminal, and we will contest it. The Prime Minister is not above the nation," he added.