A division bench of Chief Justice Deepak Misra and Justice Sanjiv Khanna turned down the plea saying that the suitability of the persons on the panel could not be a matter of judicial review and did not warrant any interference from judiciary.
"It is a resolution passed by the Ministry of Law and Justice for drafting a bill. It can be treated as an internal matter of the executive and exclusively in the domain of the executive," the bench said.
"The suitability of the persons, we are disposed to think, cannot be a matter of judicial review.
"We don't perceive any public interest involved in this petition. Accordingly, the writ petition does not deserve to be entertained and the same stands dismissed," the bench said.
The petition seeking ouster of Hazare, 71, was filed by a civil society organisation Jan Shakti, alleging corruption in the administration of his Hind Swaraj Trust.
"The members of the committee do not hold public office and hence, there cannot be any eligibility criteria for having them in the panel," the court said, dismissing the plea.
"A drafting committee has been constituted and it pertains to a pre-enactment stage. We have our grave doubts whether the same can be scrutinised while exercising the power of judicial review," the court said.
It said, "The Constitution casts an obligation on the part of the court while exercising the power of judicial review to test the legislation in the constitutional backdrop, but not at a stage when the drafting of a bill is in process."
Jan Shakti, in its petition to the High Court, had claimed that an inquiry commission, set up in 2003 to inquire into Hazare's allegations against some Maharashtra ministers, had found the activist was indulging in corruption by way of "mis-administration" of one of his trusts.
After a detailed inquiry, the Commission, in its report submitted in 2005, gave its finding that Hazare was guilty of corrupt practices, the NGO alleged.
"The Commission's report says that some of the workers of Hazare's Bhrastachar Virodhi Janandolan Trust were abusing the platform for anti social activities such as extortion of money and blackmailing (by threatening to expose corruption through use of RTI)", it said.
The Centre had earlier defended Hazare's inclusion in the panel saying it was its "prerogative" to decide its members.