In a major setback to national investigation agency (NIA), the Bombay high court on Wednesday granted bail to two accused in the September 2008 Malegaon bomb blast case, after observing that there was no material to connect the duo to the blast.

Shivnarayan Kalsangra and Shyam Sahu, who are in custody since October 2008, were granted bail on a surety of Rs one lakh each.

"There is no sufficient material to show prima facie involvement of the two accused in the blast case. They have not taken any active part in the blast conspiracy. The only link of these two accused to the blast case is that they knew the prime accused Ramchandra Kalsangra, who is yet to be arrested," justice A M Thipsay remarked while granting bail.

The court further observed that although the duo was aware that Ramchandra was involved in unlawful activities and about his strong philosophy for Hindutava it is not sufficient to accuse them of being part of the blast conspiracy.

"The NIA, which has taken over the probe recently from the state anti terrorist Squad (ATS) has been unable to point out specific evidence against the two accused and are claiming that the probe is still on. The trial is not yet started in the case in such circumstances the accused is not required to languish in jail," justice Thipsay said.

The court however observed that while there is material against Ramchandra there is no incriminating evidence against Shivnarayan and Shyam.

Shivnarayan is Ramchandra's brother and Shyam was his business partner. Ramchandra is still absconding in the case.

Twelve persons including Sadhvi Pragya Singh Thakur and Lt Col Prasad Purohit were arrested for conducting blast at Malegaon on September 29, 2008, killing six persons and injuring 100 others.

The accused have been booked under the stringent Maharashtra control of organised crime act (MCOCA), unlawful activities prevention act (UAPA), besides the Indian penal code (IPC).

The trial is yet to commence as some of the accused have challenged the invocation of MCOCA in the case before the Supreme Court, which is still pending.