But Justice Chandramauli Kumar Prasad and Justice Pinaki Chandra Ghose made it clear that there was no objection to fatwas issued on a religious issue "or any other issue so long it does not infringe upon the rights of individuals guaranteed under law".
Justice Prasad said: "We would like to advise the Darul-Qaza (Islamic courts) or for that matter anybody not to give any response or issue a fatwa concerning an individual, unless asked for by the person involved or the person having direct interest in the matter.
"Issuance of fatwa on rights, status and obligation of an individual Muslim, in our opinion, would not be permissible, unless asked for by the person concerned or in case of incapacity, by the person interested.
"Fatwas touching upon the rights of an individual at the instance of rank strangers may cause irreparable damage and therefore would be absolutely uncalled for."
The court ruling drew varying responses from leading members of the Muslim community, the largest minority in India. India is also home to the third largest Muslim population in the world.
The Darul-Uloom Deoband, India's most influential Islamic seminary, slammed the verdict.
Spokesman Ashraf Usmani told IANS on telephone from Deoband in Uttar Pradesh that the apex court "has never given such a wrong decision against the Sharia".
Usmani argued that Islamic courts in fact helped the country's judicial system by clearing many cases "which the Indian courts have not been able to do deal with".
The All India Muslim Personal Law Board (AIMPLB), which has the Darul-Qaza committee of five prominent clerics running Sharia courts in various Indian cities which Muslims can approach for deciding their matters in accordance with Islamic law, said the Darul-Qaza never claimed that they have legal powers.
It asserted that the apex court verdict was not a setback.
"Why are you ignoring the fact that the court has dismissed the petition for banning Darul-Qaza," AIMPLB assistant secretary Mohammed Abdul Raheem Qureshi told IANS when asked to react on the court ruling that Sharia courts have no legal sanctity.
"We never claimed that we are constitutional institutions or we have legal powers. We are private institutions and we decide the matters as per Sharia when parties approach us," he said.
Yaseen Akhtar Misbahi, a Muslim scholar here, told IANS that Sharia courts were very running for years. "If they help in solving the problems related to a particular community, no one should object."
The Patna-based Imarat-e-Shariah welcomed the judgement. A senior cleric, Anisur Rehman Quasmi, told IANS that the Supreme Court ruling would not hamper "ongoing religious work".
Cleric Mahmood Madani pointed out that fatwas were only an opinion. "Those who want to abide by it can do so and those who don't want do need not agree," Madani told IANS.
The Supreme Court ruling came in response to a plea by Vishwa Lochan Madan who sought curbs on the activities of kazis and muftis who, he said, gave out fatwas which amounted to judicial pronouncements and constituted a parallel justice delivery system based on Shariat.
The petitioner contended that all fatwas have the support of the All India Muslim Personal Law Board and alleged that it wanted to establish a parallel Islamic judicial system in India.
The apex court made it clear that a fatwa "not emanating from any judicial system recognised by law ... is not binding on anyone including the person who had asked for it.
"As such an adjudication or fatwa does not have a force of law and, therefore, cannot be enforced by any process using a coercive method.
"Any person trying to enforce that by any method shall be illegal and has to be dealt with in accordance with law," the judgment said.
The judges said fatwas should not violate basic human rights.
"It cannot be used to punish the innocent. No religion including Islam punishes the innocent... Religion cannot be allowed to be merciless to the victim. Faith cannot be used as dehumanising force."