The reason the CM confided in Manohar and Jaidev is because he has an ulterior motive. His concern is not the fact that innocents are being tagged as terrorists. His concern stems from the role he and the Sinhas have played in the Alan Broad case. If the system believes that Asad was the third terrorist and he is dead, it is a closure. As to Haider being the mastermind, as he isn't really the mastermind, there is no threat to anyone because irrespective of how much torture he may be subjected to, he doesn't have anything incriminating to disclose because he has no connection with any terrorists, whatsoever.
On the other hand, if Swadheenta manages to prove Arvind's existence, presence and role in the attacks, it means that there is a terrorist alive out there who could be questioned. If Arvind is captured and interrogated, he could end up spilling a lot of information that could bring down all those involved in filling their own coffers. He is a threat because he could spill information about Alan Broad, his involvement, his release, people involved in his release, and so on. If this happens, the CM will be publicly humiliated and his future, along with his career is doomed.
The CM knows that Suhasini is a strong lawyer and if she wants, she will manage to reach to the bottom of things. Apart from her professional brillance, she is also personally and emotionally invested in this case, so there is a high chance of her laying out the true facts before the world to punish the true killers of her son. Because the CM doesn't want this to happen, he will play his cards very carefully and show Manohar and Jaidev what the Sinhas stand to lose if the truth is out in the open.
So for the Sinhas, it is now a struggle between choosing justice for their dead son OR saving themselves from the repurcussions of the truth being revealed. And knowing Manohar Sinha, the CM knows that he will care more about saving himself than getting justice for his dead son. While he has more or less read Manohar correctly and can predict his actions, he cannot predict the actions of Suhasini, and most importantly Jaidev. I have my hopes on Jaidev - he will not act immediately, but act he will!