Deokar, the Minister of State for Transport and also the Guardian Minister of Jalgaon district, was granted bail on May 21 by Additional District Judge N R Kshirsagar.
However, Additional Superintendent of Police Ishu Sindhu, who is in charge of the probe, had opposed the bail. One Premanand Jadhav and two others had then challenged the decision before the Aurangabad Bench of Bombay High court.
Justice T V Nalavde of the bench also rejected Deokar's plea that he be granted four weeks' time to appeal in the Supreme Court.
Meanwhile, NCP sought Deokar's resignation after his bail was cancelled. "Deokar has been asked by the state NCP chief Madhukar Pichad to submit his resignation as minister," a party source told PTI.
Jalgaon police have sought government permission to prosecute Deokar in the case and had even arrested him on May 21 for his alleged involvement in the 15-year old mass housing scam.
Deokar, NCP's face in Jalgaon in north Maharashtra, faces charges of criminal conspiracy, cheating, forgery and corruption in the scam involving fraud in the construction of 11,000 low cost houses.
In March, Shiv Sena MLA and former Maharashtra minister Suresh Jain was arrested in connection with the 2006 Gharkul Housing Scheme scam.
Jain, who was a Minister for Housing during the Shiv Sena-BJP rule in the 1990s, was arrested for allegedly favouring a builder and indulging in irregularities to the tune of Rs 29 crore.
As per the preliminary investigations, Jain had indulged in irregularities to the tune of Rs 29 crore and had favoured Khandesh Builders, a firm that was given a contract for constructing tenements under the Gharkul housing scheme.
Former municipal commissioner of Jalgaon Pravin Gedam had registered a complaint in this connection in 2006.
