Sharma has sought release on the ground that he has already spent 25 years in jail.
He has challenged the decision of the Sentence Review Board, which examines the records of those who have spent 14 years in jail and those who were given life term, declining his plea for release.
The board, which was constituted in 2004 as per Supreme Court directives and is chaired by the Delhi Home Minister, decides on the pleas of convicts and other related issues. The board also has representatives of Tihar Jail, Delhi Police and Home Department as its members.
According to Sharma's counsel, he has applied for release before the board thrice and his pleas were turned down in January 2016, September 2016 and in September this year.
During the day's hearing, the court said though he has a right to be considered for release by the board, he cannot claim his release as a matter of right.
"You have a right to be considered for release but you do not have the right for grant of release", Justice Mukta Gupta said while posting the matter to March 14 for further hearing.
Sharma, who is serving life term for murdering his wife Naina Sahni, chopping it off and throwing the body parts in a restaurant's tandoor, has sought premature release on the ground that he has spent over 25 years in jail.
Senior advocate N Hariharan, appearing for Sharma, said the valuable rights of the convict are also at stake and the board has rejected the plea without giving any reason.
When advocates Sumeet Verma and Amit Sahni, also representing Sharma, said the convicts in more henious offences have been released, the court said there can be no comparison.
The counsel claimed that the board's decision was arbitrary and in violation of the guidelines.
To this, the bench said it was not going to sit in appeal on the decision of the board.
The counsel submitted that the years also include four years in remission earned over the period of jail term.
In September 2015, 20 years after he was sent to jail for the murder, Sharma was released on unconditional parole till a final decision on his release was taken.
Now 56, Sharma had shot his wife Naina Sahni to death in 1995 objecting to her alleged relationship with a male friend. He had then chopped her body into pieces and attempted to burn it in a restaurant's oven.
Popularly known as the tandoor murder case, it is one of the landmark cases in India in which DNA evidence and a second autopsy were used to establish the guilt of the accused.