Justice Chandramauli Kumar Prasad granted bail to Goswami after hearing the defence counsel and vigilance bureau advocate. Goswami has already obtained bail from the High Court in another case related to a scam in the urban development department. With the bail granted to him on Friday, Goswami will be released from the high-security Beur jail in the capital where he has been held for more than a year.

The court granted bail to Goswami on two sureties of Rs 25,000 each. Senior advocate and advocate-general in the previous Rashtriya Janata Dal regime, Shashi Anugrah Narayan, who represented Goswami, told the court that his client had been languishing in jail for a long time and the trial of his case is yet to begin.

Vigilance advocate Y V Giri objected to the bail plea but was overruled by the court. The case relates to the alleged swindling of Rs 17 crore meant for providing relief to flood-hit people of north Bihar in 2004.

An inquiry into the matter by the state vigilance bureau was ordered when President's Rule was in force in the state in 2005.

An FIR was filed against Goswami and 27 others in the case on May 28 2005. Later, all the accused, including Goswami, and scam kingpin Santosh Jha, a supplier, surrendered and were sent to jail.

The registration of a case against Goswami, who was named by Time magazine as a Young Asian Hero, had shocked the country.

Goswami was also named as an accused in another case relating to the alleged defalcation of Rs 1.52 crore meant for urban development schemes. He was given bail in that case recently by Patna High Court.