The Enforcement Directorate (ED) had moved the special court for Prevention of Money Laundering Act seeking to declare Modi and Choksi as fugitive economic offenders (FEAs).
Special Judge M S Azmi rejected the accused's plea.
A detailed order will be available later, the court said.
The ED has sought to declare the duo as FEAs under the newly-enacted Fugitive Economic Offender Act, saying all its efforts to bring them back to the country have failed.
The accused's lawyers claimed that the ED's investigation was one-sided and it did not consider relevant documents or examined certain relevant persons before approaching the court.
They sought to cross-examine witnesses cited by the ED, including deputy director of the agency Kapil Raj who is the complainant, another official who is an assistant director and the investigating officer.
As per the Central Bureau of Investigation (CBI) and ED, Modi and his uncle Mehul Choksi, who controlled high-profile jewellery firms, allegedly cheated Punjab National Bank (PNB) to the tune of Rs 14,000 crore by fraudulently securing Letters of Undertaking.