A bench of justices Sanjiv Khanna and Ashutosh Kumar said Bhagmal will remain on bail for 60 days from the date of his release and listed the matter for further hearing on July 1.
It also extended the interim relief by 30 days to convict Balwan Khokhar on the same ground.
The court, however, asked Bhagmal to furnish a bail bond of Rs 50,000 with one surety of the like amount.
It further directed retired naval officer Bhagmal not to leave India without prior intimation to the court.
On April 15, the court had called for a medical report on Balwan Khokhar after it was informed that the convict broke his hand after a fall in the jail.
The court had on that day refused to grant bail to co-convict Girdhari Lal.
The trio and two others were held guilty in a case relating to the murder of five members of a family in Raj Nagar area of Delhi Cantonment on November 1, 1984, a day after the assassination of then Prime Minister Indira Gandhi.
They also challenged their conviction and award of life sentence by the trial court in May 2013.
The trial court had acquitted Congress leader Sajjan Kumar in the case but awarded life term to Bhagmal, Khokhar and Girdhari Lal.
The court had also awarded three years jail term to two others ? former MLA Mahender Yadav and Kishan Khokhar.
The high court had in September 2013 denied bail to Bhagmal.
The convicts have filed their appeals before the High Court while CBI has also filed an appeal demanding death sentence for the trio, saying they were engaged in “a planned communal riot” and “religious cleansing”.
PTI