Rajiv Gandhi was killed by a Liberation Tigers of Tamil Eelam (LTTE) suicide bomber while campaigning in Tamil Nadu's Sriperumbudur in May 1991.
Tamil Nadu cannot free Rajiv Gandhi's killers without consulting the Centre, the Supreme Court said today.
A Constitutional bench said that the Tamil Nadu government has no power to release the convicts on its own as the case was investigated by the CBI or Central Bureau of Investigation.
"In cases where the state tries a case, the state has powers to grant remission," the court said.
Last year, the Centre moved court after the Jayalalithaa government announced that it would release seven people convicted for the former prime minister's assassination in 1991 by a suicide bomber. It was seen as a populist move by the state in the months before the national election. For years, the case has been linked to Tamil sentiment and all regional parties in the state have campaigned for the convicts' release.
The seven people have spent over 20 years in jail.
Three assassins - Murugan, Santhan and Perarivalan - were spared execution because of an exceptional delay in a decision on their mercy plea. Four others, including Murugan's wife Nalini Sriharan, Robert Pious, Jayakumar and Ravichandran are serving life terms.
Nalini, who was earlier on death row, was granted mercy on the intervention of Rajiv Gandhi's widow and Congress president Sonia Gandhi.
The Tamil Nadu government had in August argued that a convict in Mahatma Gandhi's assassination, Gopal Vinayakram Godse, had been released in 1964 after being sentenced to a life term. Vinayakram Godse was the brother of Mahatma Gandhi's assassin Nathuram Godse.