A bench of justices J S Khehar and N V Ramana, however, kept the bail plea of the UP politician pending and asked the Special CBI court to frame charges and examine key witnesses in the case within three months.
The CBI has alleged that about Rs six crore has been received as graft out of the fund meant for setting up of modular operation theatres in 40 districts of Uttar Pradesh.
Earlier, Supreme Court judge R K Agrawal had recused from hearing the bail plea of Kushwaha without assigning any reason.
The politician, in his plea, has said that he has been in prison for nearly three years.
On February 13, the apex court had dismissed Kushwaha's bail plea, saying the allegations against him were very "serious".
The bench, however, had allowed Kushwaha to move lower court for bail if the trial does not commence within six months.
In July last year, the former minister had approached the apex court challenging the Allahabad High Court order rejecting his bail plea in the scam which had taken place during the previous Bahujan Samaj Party government headed by Mayawati.
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