"Sorry, we are not interested," a bench comprising Chief Justice H L Dattu and justices M B Lokur and A K Sikri said.
Nalini had challenged Section 435(1) of the Criminal Procedure Code which mandates the state government to consult the Centre before premature release of a convict if the case was investigated by the CBI.
She has been in jail for the last 23 years and undergoing life imprisonment after her death sentence was commuted.
She was sentenced to death by the trial court in the case on January 28, 1998.
Nalini, along with six other convicts, is presently lodged in Vellore Central Prison of Tamil Nadu.
"Though 2200 life convicts who had put in less than 10 years of imprisonment were prematurely released by the Tamil Nadu Government during the last about 15 years, she was excluded from consideration for premature release only on the ground that her offence was investigated by the CBI i.e. her case was covered by Section 435(1)(a) CrPC. The said section is unconstitutional," her petition said.
The Centre had earlier contended that the Tamil Nadu government can't release the convicts without its approval and had derailed the state government's decision to release them.
After the apex court had commuted the death sentence of convicts Murugan, Santhan and Perarivalan, the Tamil Nadu government on February 19 had proposed to remit the sentences of all seven lifers, including the three, and release them.
The decision of the state government to release the convicts was challenged by the Centre before the Supreme Court which had stayed the decision and referred the matter to a Constitution Bench.
The court had on February 20 stayed the decision to release of three convicts--Murugan, Santhan and Arivu-- whose death sentence was commuted to life term by it on February 18 in the case, saying there had been procedural lapses on the part of the state government on the decision to release them.
The apex court later on had also stayed release of convicts Nalini, Robert Pious, Jayakumar and Ravichandran in the case.
Santhan, Murugan and Arivu are currently lodged in the Central Prison, Vellore and they are in jail since 1991. The other four are also undergoing life sentence for their role in Rajiv Gandhi's assassination on May 21, 1991 in Sriperumbudur.
(With PTI inputs)