The top court also said it cannot deny the relief to him merely because "sentiments of community was against him".
Six people were killed in a bomb blast on September 29, 2008, at Malegaon, a communally-sensitive textile town in Nasik district of north Maharashtra.
The apex court said there were "material contradictions" in the charge sheets filed by the Anti-Terrorist Squad (ATS), Mumbai and the National Investigating Agency (NIA), which are required to be tested at the time of trial, and it cannot pick or choose one version over the other.
It said that Purohit has refuted the claim of conspiracy on the ground that he had informed to his senior officers about the intelligence inputs of meetings attended by him at the Abhinav Bharat, a right-wing Hindu extremist outfit, and alleged role of ATS officials in the planting of RDX explosive substance at the residence of a co-accused.
Holding that the "grant or denial is regulated, to a large extent, by the facts and circumstances of each particular case," it said but the "right to bail is not to be denied merely because of the sentiments of the community being against the accused."
The court set aside the April 25 verdict of the Bombay High Court denying bail to Purohit, but imposed certain restrictions while granting him relief after he spent eight years and eight months in jail.
The court, however, made it clear that the grant of bail to Purohit, shall be no ground for similar relief to other accused in the case and each plea for relief will be considered on its own merits.
"We also make it clear that the Special Court shall decide the bail applications if filed by the other accused persons, uninfluenced by any observation made by this Court. Further, any observations made by us in this order shall not come in the way of deciding the trial on merits", it said.
The confessional statements recorded under the MCOCA provisions by the ATS were not being relied upon by the NIA in the charge sheet against the accused persons, it said.
The bench said that NIA found no evidence against Sadhvi Pragya Singh Thakur to prosecute her, as all the witnesses had retracted from their statements.
A special MCOCA court had earlier ruled that the ATS had wrongly applied this law against Sadhvi Pragya Thakur, Purohit and nine others.
The 4,000-page charge sheet had alleged that Malegaon was selected as the blast target because of a sizeable Muslim population there. It had named Thakur, Purohit and co-accused, Swami Dayanand Pandey as the key conspirators. However, Thakur was last year given clean chit by the NIA.
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