District Judge I S Mehta granted Liyaqat bail on him furnishing a personal bond of Rs 20,000 with a surety of a similar amount.
The court imposed several conditions on Liyaqat while granting him bail and directed him not to leave the country without its prior permission.
Liyaqat was arrested by the Delhi Police from Gorakhpur in Uttar Pradesh when he entered India through the Nepal border last month.
The Ministry of Home Affairs had earlier ordered NIA probe into his arrest.
The Jammu and Kashmir Police had supported the claims of Shah's family that he was a former militant who had already surrendered and was part of a group returning from Pakistan- occupied Kashmir as part of the rehabilitation policy.
The Special Cell of Delhi Police on the contrary has claimed that it had foiled a suicide attack in the national capital with Shah's arrest, who they claimed, was a Hizbul Mujahideen terrorist who planned attacks in the national capital.
Shah's arrest triggered a controversy after the Omar Abdullah Government and the state police contradicted Delhi Police''s version that he was coming to Delhi to coordinate terror strikes during the festival of Holi.
--ANI (Posted on 17-05-2013)