Chavan's lawyer Amit Desai argued that his client had been wrongly implicated. Under the section 169 of Criminal Procedure Code, an accused can be discharged if the evidence is deficient, which was the case here, Desai said.
Desai also said he will cite case laws next time to show that HC had the power to recall its own order if it was satisfied that there would be grave injustice.
CBI had initially moved the trial court seeking to drop Chavan's name from the FIR. After it was rejected, the investigating agency filed a revision application in the High Court which was dismissed by Justice Tahilyani.
CBI sought Chavan's exclusion after the then Maharashtra Governor K Sankaranaryanan refused sanction to prosecute him.
Chavan had to resign when the scam came to light in 2010. He has been charged with approving additional floor space index for the Society in return for two flats for his relatives and illegally approving allotment of 40 per cent of the flats to civilians though the society was meant for Kargil war widows and defence personnel.