A bench of justices P K Bhasin and J R Midha dismissed the bail plea of Shahzad, 25, who was awarded life term on July 30, 2013.
He was convicted and sentenced for killing decorated police officer Inspector M C Sharma and injuring two other cops in the September 19, 2008 encounter when a team of Delhi Police Special Cell raided the Batla House flat in Jamia Nagar on a tip-off that terrorists involved in the September 13, 2008 serial blasts in the city were holed up there.
He had sought bail, saying he has "a good prima facie case in appeal and there is every likelihood of his appeal being allowed and that he has stayed in custody throughout his trial."
In his appeal, Shahzad has said that the trial court erred in holding him guilty without any incriminating, clear or unimpeachable evidence and the findings were based on conjectures and surmises.
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The trial court had held Shahzad guilty on charges of murder, attempting to cause death and various other provisions of IPC and the Arms Act.
While awarding him life term, the court had noted that death of Sharma had shocked the collective conscience of the entire nation.
He was also slapped with a fine of Rs 95,000 of which Rs 40,000 was to be given to Sharma's family and Rs 20,000 to Head Constable Balwant Singh, who was injured in the encounter.
Shahzad is also among the 13 suspected terrorists facing trial in the 2008 serial blasts case. The multiple blasts had left 26 dead and 133 injured.