The then Maharashtra governor had refused to sanction Chavan's prosecution.
The court today also rejected an intervention application filed by activist Ketan Tirodkar opposing CBI's plea.
CBI and Chavan had opposed the plea saying that Tirodkar had no locus standi to file such an application.
Justice M L Tahilyani said he was rejecting Tirodkar's application because CBI and Chavan had opposed it. However, the judge said before passing the order on CBI's plea, he would go into a Supreme Court judgement cited by Tirodkar which says that sanction is not needed to prosecute an accused in such cases.
In its interim order last month, the High Court had stayed Chavan's prosecution.
Chavan stepped down as the Chief Minister after the Adarsh scam came to light in 2010. He was accused of approving additional floor space index for the society in south Mumbai in return for flats for his relatives.
He was also charged with illegally approving, as the revenue minister, allotment of 40 per cent of flats to civilians, though the society was initially meant only for Kargil war widows and defence personnel.
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