A division bench of Justices P V Hardas and P N Deshmukh gave the relief to Manoj Raj, Mansingh Grover, Aba Malma and Vivek Ambre, on personal bond of Rs 25,000 each.
The judges also directed them to attend Versova police station on every first Saturday of every sixth month, between 8am and 9am.
The judges said that the sentence awarded to the accused would not in any manner sustain the conviction.
The four convicts had sought bail, pending hearing in their appeal against the sessions court's conviction order.
On July 12, 2013, the sessions court had acquitted encounter specialist and police inspector Pradeep Sharma observing that there is no direct or circumstantial evidence to show his involvement in the case.
According to the sessions court, the prosecution evidence against Sharma was "weak" to arrive at a conclusion that he had led the police team.
The court, however, convicted 21 persons, including 13 policemen, and sentenced them to life imprisonment on charges of murder.
