The Supreme Court granted bail to Lieutenant Colonel, Shrikant Prasad Purohit in the 2008 Malegaon blast case on Monday. Seven people were killed in bomb blast on 29 September at Malegaon in Nasik district of north Maharashtra.
Purohit (45), who was in jail for eight years, had denied participation in the case.
The National Investigation Agency (NIA) is investigating the matter. The case also names Sadhvi Pragya Singh Thakur as one of the accused.
Purohit approached apex court challenging a Bombay high court order dismissing his bail appeal. A special Maharashtra Control of Organised Crime Act court had earlier said that the Maharastra anti-terrorist squad (ATS) had incorrectly applied this law against Thakur, Purohit and others.
The 4,000-page charge sheet had alleged that Malegaon was chosen as the blast point as of a large Muslim population.