The meeting was held to hear the views of Garda Commissioner Martin Callinan on gangland crime, dissident republicans, white-collar crime, burglaries, recruitment and station closures.
However, when independent TD Finian McGrath attempted to raise the issue of the Fr Molloy investigation, he was ruled out of order by committee chairman David Stanton.
The committee then went into closed session and the gardai, media and onlookers were asked to leave.
Shortly afterwards, Mr McGrath left the meeting and the committee resumed its questioning.
Fr Molloy (52) was murdered at the home of his friends Richard and Therese Flynn in Co Offaly in July 1985 after requesting the return of a large sum of money owed to him.
The murder took place after a wedding party attended by several politicians.
The priest was beaten up and his battered body placed in the bedroom of the Clara mansion.