The High Court also accepted Amin's argument that he has already spent six years behind the bars in the alleged fake encounter case.
Justice Abhay Thipsay, however, stayed the operation of the order for two weeks after CBI counsel Hiten Venegaokar sought time to move the Supreme Court to challenge the bail.
Amin was granted bail on a bond of Rs 30,000 after his counsel argued that he was undergoing treatment at the Ahmedabad civil hospital for various health ailments.
The High Court had last month rejected Parmar's bail application and called for Amin's current medical report. It also said that the trial should be completed within a year.
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Senior counsel Mahesh Jethmalani, who initially represented Amin, had argued that apart from other contentions concerning the merits of the case, the high court should also take into account the health condition of the accused who is admitted to the civil hospital in Ahmedabad.
Venegaokar said not only was Amin present during the cremation of Kausar Bi but had also joined another police sub- inspector to the spot of her cremation.
Advocate Amit Nair, appearing for Parmar, had argued that his client had been in jail for more than five years. Nair submitted that Parmar was not even part of the encounter team or present during the cremation.