At the start of the hearing, the court reiterated what it had said on January 18 that WhatsApp was a private app and it was optional whether to download it or not.
"It is not mandatory to download it. Every other app has similar terms and conditions regarding sharing of user information with others," the court said and asked why the petitioner was challenging the policy of WhatsApp.
The court also observed that the Personal Data Protection Bill was being considered by Parliament and the government was looking into issues raised in the plea.
During the hearing, ASG Sharma told the court that by not giving Indian users the option to opt out of sharing their data with other companies of Facebook, WhatsApp prima facie appears to be treating users with an "all or nothing approach".
"This leverages the social significance of WhatsApp to force users into a bargain which may infringe on their interests in information privacy and information security," he further said.
He also told the court that though the issue was between two private individuals -- WhatsApp and its users -- the scope and expanse of WhatsApp "make it a germane ground that reasonable and cogent policies are put in place which is being done by the Personal Data Protection Bill and discussions are very much on".
Sharma said the government was already looking into the issue and has sent a communication to WhatsApp seeking certain information.
Senior advocate Kapil Sibal, appearing for WhatsApp, told the court that the communication has been received and will be responded to.
The court, thereafter, listed the matter for hearing on March 1.
Under the new policy, users can either accept it or exit the app, but they cannot opt not to share their data with other Facebook-owned or third party apps.