Justices Sir Brian Leveson and Blake, sitting in the Queen's Bench Division in London, had dealt a major blow to the CBI last week by ruling against extradition as there was no prima facie case established against the 47-year-old former Indian Navy officer.
In their written judgement released here on Friday, the judges laid out the facts of the proceedings, which commenced in 2010.
"To date, the proceedings have lasted three years: the District Judge did not put the blame for such delay on the appellant (Shankaran). In the meantime, it is not in dispute that proceedings in India have also moved at what can only be described as a sluggish pace," the order reads.
The UK's Crown Prosecution Service (CPS), representing the Indian government, has 14 days to appeal against the judgment dated April 1.
"We are still liaising with the Indian authorities," a CPS spokesperson told PTI.
However, according to sources, the CBI has been advised against a further appeal against the order, which overrides an extradition order issued by UK Home Secretary Theresa May in May last year following a ruling by District Judge Nicolas Evans at Westminster Magistrates' Court.
"Irrespective of the identity of the requesting state, for as long as any defendant to the extradition process is within this jurisdiction, he or she is entitled to rely on the European Convention of Human Rights (ECHR)... If extradition would breach the Appellant's human rights, then he must not be extradited," the ruling points out.
Shankaran is an accused in the case of leaking classified information from the War Room to arms dealers. He has been absconding since the case was registered by the Central Bureau of Investigation (CBI) in March 2006.
The case involves leakage of over 7,000 pages of defence information of sensitive nature from the naval war room and air defence headquarters.
Shankaran's passport was revoked in May that year and an Interpol Red Corner Notice was issued against him in July 2006. He was arrested by British authorities in April 2010 on the basis of non-bailable arrest warrants issued by the Court of Chief Metropolitan Magistrate in New Delhi.
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