The high court had termed the action of the magistrate as "judicial impropriety" and "gross indiscipline" and recommended the chief justice to take appropriate action on the administrative side.
It had set aside the order of magistrate and cancelled the bail plea of an accused, arrested for allegedly giving fake educational degrees to students for money.
A bench of Justices A K Sikri and Ashok Bhushan said the approach of the high court was "erroneous in law" and set aside the order of single judge of the high court.
The top court said, "The grounds for grant of anticipatory bail are altogether different from that of regular bail."
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"No doubt, anticipatory bail was rejected on August 26, 2016 and within four days thereafter regular bail was granted. However, the high court could not have cancelled the bail, only on the ground that the anticipatory bail was rejected," it said.
It said that the high court was also wrong in observing that in the circumstances the only remedy for the accused was to approach the high court alone "as if he was precluded from filing an application for regular bail before the magistrate".
The top court said it was an event that occurred after the accused came out on bail and could be a ground which could be raised by the complainant before a trial court for cancellation of bail.
An FIR was lodged at Dharamshala police station of Kangra district in Himachal Pradesh. The accused Chander Kant was charged with the offences of forgery, criminal conspiracy, criminal breach of trust and other sections of IPC.
After registration of the FIR and when the probe was pending, the accused had moved high court seeking anticipatory bail, which was dismissed on August 26, 2016.
The complainant challenged the order of magistrate granting bail to the accused before the high court, which on June 2, 2017, after seeking explanation, passed various strictures against the judicial officer.
The judicial officer in her explanation to the high court had said there were "direct or indirect directions to grant bail liberally. Taking into consideration that anticipatory bail has been rejected but now as the accused remanded to custody and opportunity was given to police for custodial interrogation and recovery, I considered it to be a changed circumstance".
The high court said, "Judicial discipline requires decorum known to law which warrants that the appellate directions should be followed in the hierarchical system by the court which exists in this country."
"It is necessary for each lower tier to accept loyally the decisions of the higher tier. The judicial system only works if someone is allowed to have the last word and if that last word, once spoken, is loyally accepted," the bench had said.