Special Judge Sunena Sharma allowed ED to quiz Pandey after the agency said he was required to be confronted with other accused in the case.
Appearing for the agency, additional solicitor general SV Raju moved an application seeking Pandey's 14-day custodial interrogation.
The application stated that the former top cop committed an unlawful act of tapping of MTNL phones, for which purpose ₹454 crore was paid, and becomes proceeds of crime.
Pandey told the court that he never did any phone tapping or live monitoring.
This comes a day after the federal probe agency took him into custody after more than seven hours of questioning.
The ED had last week arrested former NSE MD and CEO Chitra Ramkrishna in the case and had recently told the court that the "snooping of phone calls" at the NSE was being done from 1997. Pandey's company under scanner in this case was set up in March 2001.
Transaction of funds worth about ₹12 crore allegedly to Pandey and his company are under the scanner of the agency.
He retired from service while holding the post of Mumbai's Commissioner of Police, on 30 June, a charge he held for four months. He was appointed to the post by the MVA government headed by former Maharashtra chief minister Uddhav Thackeray.
Pandey briefly served as the acting Maharashtra director general of police or the head of the state police force.
