"That is one aspect. That must come to an end (keeping him outside the state)," a bench comprising justices Aftab Alam and Ranjana Prakash Desai said. However, the bench said it has strong reservation over holding the trial of the case in the state.
"We have strong reservation about the trial to be conducted in the state. Trial has to go to Maharashtra," the bench said.
The bench posted the matter for September 4 after senior advocate Ram Jethmalani said he would like to make short oral arguments and will also place written submissions on the issue of bail and transfer of case of the Bharatiya Janata Party leader.
Jethmalani had submitted that the court should lift the condition imposed on Shah, when he was granted bail that he would keep himself out of Gujarat.
Jethmalani submitted that Shah should be permitted to be in Gujarat under the surveillance of the Central Bureau of Investigation officials in view of the upcoming assembly elections.
"Don't keep him away from political activities," he submitted.
Meanwhile, the court also asked the CBI to take a decision within a couple of days on its probe relating to the killing of Tulsiram Prajapati, who was one of the key witnesses in the killing of Sohrabuddin Sheikh.
The bench stated this after CBI counsel Vivek Tankha said that the CBI probe in Prajapati killing case was complete and the agency would file the charge sheet within a week or so.
The CBI also placed before the bench a fresh status report about its investigation, which covered the Prajapati case.
Tankha said let the CBI file its second chargesheet in the Prajapati case and it will have a stronger case.
Earlier, senior advocate Gopal Subramaniam, who was appearing as amicus curiae in the Sohrabuddin case, said the CBI should investigate whether there was any nexus between the police and the politician in eliminating the gangster who was allegedly involved in extortion activities.
"The CBI owes an explanation about the police-politician nexus," he said.
Further, he said the CBI probe should also cover whether Prajapati and Sohrabuddin Sheikh were actually involved in other cases having nexus with the police and politician.
The senior advocate said these are serious issues and the CBI needs to deal with them.
Sheikh and his wife Kauser Bi were allegedly abducted by the Gujarat's Anti-Terrorism Squad from Hyderabad and killed in a fake encounter near Gandhinagar in November 2005.
Prajapati, said to be an accomplice of Sohrabuddin, was also subsequently eliminated allegedly by the ATS to destroy evidence, as he was an eyewitness to their death, according to the CBI.
Shah has also been made an accused in the case. Shah, a close aide of Gujarat Chief Minister Narendra Modi, was arrested by the CBI on July 25, 2010 and has spent over three months in Sabarmati Jail in Ahmedabad.
Shah had to quit the Modi government in July last year after being slapped with charges of murder and kidnapping in the fake encounter killing.
He has been accused by the agency of being the "kingpin" of the conspiracy leading to the fake encounter killing of Sheikh.
The agency had earlier urged the apex court to transfer the trial of the fake encounter killing case outside Gujarat on the ground that witnesses are being intimidated and the trial cannot be held in a free and fair manner.