Sources said Shah, who was Home Minister of the state in 2004 when the encounter took place, was quizzed as jailed IPS officer D G Vanzara had claimed in his resignation letter that Gujarat government was "inspiring, guiding and monitoring" every police action from "very close quarters".
However, when contacted, agency officers refused to confirm the information. No immediate comments were available from the agency spokesperson as well.
The sources said Vanzara, during his questioning by CBI in Sabarmati Jail, has reiterated the stand taken by him in the resignation letter that police officials accused in various encounter cases were merely implementing "conscious policy" of the state government towards terrorism.
They said the agency would be filing supplementary charge sheets in connection with the encounter case giving details of the conspiracy and alleged cover up by officials of Gujarat government.
Vanzara had claimed, they said, in the resignation letter that he and other accused officials had implemented the "conscious policy of this government, which was inspiring, guiding and monitoring our actions from very close quarters".
Vanzara, who is lodged in Sabarmati jail after CBI named him as the main accused in the 2004 alleegd fake encounter case, was quizzed about the contents of his resignation letter in which he also faulted Modi.
The 59-year-old former Deputy Inspector General of Police sent his resignation letter on September 1 in which he expressed bitterness over the way the Modi government had failed to stand by him and other officers who implemented the state's "conscious policy" of "eliminating terrorism".
Shah, who is BJP's UP incharge, is charge sheeted in other encounter cases of Sohrabuddin Sheikh and Tulsiram Prajapati and was arrested in the first case in July 2010. He is out on bail now.