"There is no sufficient ground to proceed against the accused," special CBI judge MB Gosavi said as he discharged the two from the case.
Kataria is the second top politician after BJP president Amit Shah who had been charge-sheeted in the two cases but will not stand trial after relief from the court.
Shah, who was Minister of State for Home when the alleged staged encounters took place, was discharged on December 30.
Kataria allegedly got in touch with Shah who later allegedly plotted the entire operation with the help of Gujarat police, the charge sheet said, claiming Rajasthan's former minister was the link between Patni and the present BJP chief.
However, the special judge, while discharging the duo, held that there was no evidence to show any link between Patni and Kataria.
"There is also no evidence to show that Kataria met Shah in connection with the encounter," observed judge Gosavi, adding there was no sufficient ground for CBI to book Patni and Kataria for murder and conspiracy.
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