"We are inclined to modify the said condition, while other conditions will stand," a bench comprising Chief Justice P Sathasivam and Justice Ranjana Prakash Desai said.
The bench took into consideration that the trial of the case has been shifted to Mumbai and the case was committed to the sessions court after the apex court's order on September 27, 2012.
It also noted that Shah has been elected to the Gujarat assembly and he had been appointed as the general secretary of the BJP.
In response to his application, CBI only said there was an apprehension that as an influential person, he may influence or threaten the witnesses.
The apex court had earlier rejected the CBI's plea to cancel bail granted to Shah, a former minister, by the Gujarat high court, but had agreed to transfer the case to Mumbai to preserve the integrity of the trial.
The bench had imposed strict conditions on Shah and had made it clear that the relief granted in the Sohrabuddin case will not be extended to him in the Tulsiram Prajapati killing case.
The apex court had directed Shah to give an undertaking in writing to the trial court -- that he would not commit any breach of conditions of the bail bond and would not try to influence any witnesses or tamper with the prosecution evidence in any manner and report to the CBI office every alternate Saturdays at 11 am.
The bench had warned that in case Shah commits any breach of conditions of the bail bond or the undertaking given to the court, it will be open to the CBI to move the trial court for cancellation of his bail.
Sheikh and his wife Kauser Bi were allegedly abducted by Gujarat's Anti-Terrorist Squad from Hyderabad and killed in a fake encounter near Gandhinagar in November 2005.
Shah, a close aide of Chief Minister Narendra Modi, was arrested by the CBI on July 25, 2010.
He had spent over three months in Sabarmati Jail in Ahmedabad.
He had to quit the Modi government in July 2011 after charges of kidnapping and murder were slapped on him. The CBI has alleged that he was the kingpin of the conspiracy in the case.
Besides the Sohrabuddin case, Shah, the then minister of state for home in Gujarat, has also been named as an accused, along with some retired and serving senior police officers in the charge-sheet filed on September 4, 2012, in the fake encounter case of gangster Prajapati.
Prajapati was a witness when Sohrabuddin and his wife were picked up by the Gujarat police before they were killed in November, 2005.
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