A Bench headed by Chief Justice of India SA Bobde observed that people's privacy must be protected in view of the allegation that users data was being shared with other companies.
"There is a concern that circuit of messages is revealed by WhatsApp," the apex court observed.
The Bench further said that citizens have "great apprehension about loss of their privacy" and they think that their data and chats being shared with others and it has to be looked into.
"You (WhatsApp and Facebook) maybe two or three trillion companies but people value their privacy more than money. It is our duty to protect their privacy," the Bench told counsels appearing for Facebook and WhatsApp.
The CJI further told the companies' counsels, "We are telling you what we heard and read. People think that if A sends a message to B and B to C. The circuit of messages is revealed to Facebook."
During the hearing, senior advocates Kapil Sibal and Arvind Datar appearing for WhatsApp and Facebook respectively denied the allegations and called this "misinformation".
Senior advocate Shyam Divan, appearing for petitioner Internet Freedom Foundation, told the Bench that there is a great amount of metadata which is shared for profit and is a privacy concern.
"We pray that privacy standards are not lowered for Indian users by WhatsApp... They be barred from sharing data with Facebook," Divan contended.
Solicitor General Tushar Mehta appearing for Centre said that the companies cannot share data of users and data must be protected.
The court then issued notice to WhatsApp and Facebook and posted the matter after four weeks.
It has urged the Court to grant an ad-interim order, restraining the sharing of any personal data of users by Whatsapp with Facebook for marketing or other purposes.
It requested the Court to direct the WhatsApp to provide the "same standard of privacy protections to its Indian users as it is providing to users in the European Region". It also asked Court to direct to provide its users with an opt-out option while using its services, to allow users to opt-out of sharing their data with Facebook for marketing and advertising purpose.