However, the apex court dropped the CBI probe against Dimple Yadav, daughter-in-law of Mulayam and wife of Akhilesh Yadav, saying that she was not holding any public office and she was only a private person holding no position.
A bench comprising Chief Justice Altamas Kabir and Justice H L Dattu also modified its March 1, 2007 order and ordered CBI to file the status report before the apex court and not to the government.
"We are modifying our order of March 1, 2007 to remove the error in it directing CBI to place the report before the government," the bench said, making it clear that the agency will have to place the probe report before the apex court.
The bench said, "Since CBI is an independent body", there is no obligation for it to file the status report before the government.
The bench said it is also not contemplated in the Delhi Police Establishment Act under which CBI functions that the agency has to file its status report to the government.
"CBI, which is probing the case, has to decide what steps it has to take," it said.
While holding that the CBI probe against Mulayam, Akhilesh and his other son Prateek Yadav will continue, the bench said the "proceeding in the review petition cannot be converted into appeals."
CBI will take independent action in pursuance to the March 1, 2007 order in accordance with the law, it said.
The bench cleared the UP Chief Minister's wife Dimple from the DA case, saying, the "probe against her is liable to be dropped and the review petition filed by her is allowed."
The apex court had reserved its order on February 17, last year on the review petition filed by Mulayam, his sons Akhilesh and Prateek and Dimple.
The court had ordered a CBI inquiry on March 1, 2007 into the alleged accumulation of disproportionate assets by the Yadav family, on a public interest litigation (PIL) by an advocate, Vishwanath Chaturvedi, reportedly a Congress leader.
Deviating from the precedent of hearing review petitions in the judges' chambers, the bench had heard the petition in open court at Yadavs' request.
Seeking review of the apex court order, Mulayam and his family members had submitted that there was no evidence against them and that they were being harassed by political adversaries.
They had assailed the apex court's earlier order claiming it would "set a dangerous precedent" of allowing political opponents to file "false and frivolous" petitions against their detractors.
Earlier, during the arguments, the Centre, while refraining from going into the merits of the allegations against the Yadavs, had cited a number of judicial pronouncements to drive home the point that the apex court has powers to order a CBI inquiry in "exceptional cases."