Mathaiah, whose name figures as the fourth accused in the case registered on May 31, 2015, by Telangana's Anti-Corruption Bureau, had moved the court seeking quashing of the FIR.
On May 31 last year, TDP's deputy floor leader in Telangana Assembly Revanth Reddy and two others Bishop Sebastian Harry and Uday Simha were arrested by ACB while allegedly paying a bribe of Rs 50 lakh to Elvis Stephenson, a nominated MLA, for supporting TDP nominee Vem Narendar Reddy in Legislative Council elections on June 1.
All of them were subsequently granted bail. Mathaiah had secured a High Court order staying his arrest.
He had sought quashing of the FIR on the ground that at no point he had had any conversation with Stephenson and the link was not established between him and Revanth Reddy.
Justice B Siva Sankara Rao allowed his application and quashed the FIR against him.
On July 28 last year, ACB filed a preliminary charge sheet against Revanth Reddy, Sebastian Harry, Uday Simha and Jerusalem Mathaiah under Prevention of Corruption Act and section 120B (criminal conspiracy) of IPC.