New Delhi: The Supreme Court on Thursday granted anticipatory bail to activist Teesta Setalvad, following allegations in the Gulbarg Society fund embezzlement case.

"It is directed that the petitioners (Setalvad and her husband) will not be arrested in connection with the case," a bench comprising justices Dipak Misra and Adarsh Kumar Goel said, while reserving its judgement on their plea seeking anticipatory bail.

The apex court directed Setalvad and her husband Javed Anand to provide all documents, vouchers and list of persons who gave donations to their NGOs Sabrang Trust and Citizens for Justice and Peace for carrying out investigation in the case.

The bench accepted the request of their counsel Kapil Sibal that their accountant will be allowed to represent along with them before the Gujarat Police during the inquiry.

On the apprehension of Gujarat Police on the issue of non-cooperation of the accused during the investigation, the bench told senior advocate Mahesh Jethmalani, appearing for the Gujarat government, "If they will not cooperate with you in the investigation, you can file an application before us for cancellation of their bail."

The bench declined to give any commitment to Sibal whether the inquiry will be limited to post-2007 donations received by the two trusts for setting up a museum in memory of the victims or it will cover the activities of NGOs since 2002.

The bench replied, "Who are we to say. You are only on anticipatory bail qua FIR."

Earlier, the Gujarat High Court on Thursday rejected the anticipatory bail petitions filed by social activists Teesta Setalwad, her husband Javed Anand and others in the related case.

Justice JB Pardiwala had on January 30 reserved the order on the bail petitions filed by Setalwad, Anand, Tanvir Jafri (whose father Ehsan Jafri, former Congress MP, was killed during the 2002 Gujarat riots) and Firoz Gulzar, a resident of Gulberg Society here.

They are accused of misusing funds to the tune of Rs 1.51 crore. All the accused now face arrest.

The apex court was hearing the appeal filed by Setalvad and her husband against the judgement of the Gujarat High Court which rejected their plea for anticipatory bail for not cooperating with the investigation.

The Gujarat government faced some tough questions from the bench which asked, "Is this such a case where the liberty should be taken away or curtailed?

"What is the need for personal or custodial interrogation?" the bench asked Jethmalani who said that it is a case of "rank non-cooperation" and "tampering with witness" by the accused.

However, the bench said, the question is "can the liberty of a person be put on ventilator of the ICU?"

At the outset, Sibal said no citizen is above the law and if any wrong has been committed, that person has to bear the consequences but, at the same time, the state can also be not allowed to prosecute the people who have been fighting the state.

He submitted that Setalvad and her husband have been protected by the court in six FIRs and this was the seventh FIR lodged by Gujarat Police accusing them of misappropriating crores of rupees but the fact was they had raised only Rs 4.60 lakh.

He submitted that the accused were ready to place entire documents and also ready for scrutiny of each and every entry of the account book.

The bench wanted to know from Jethmalani as to why Setalvad and her husband were required to be taken for custodial interrogation.

Jethmalani said maximum opportunity was given to them but they have not cooperated in the investigation in the case in which they have collected money in the name of the riot victims.

Sibal had earlier said that a concocted case of fund embezzlement of crores of rupees has been lodged without proper verification of accounts of the NGOs named in the FIR.

The High Court in its February 12 judgement had observed that Setalvad and her husband were not cooperating in the probe and that "they cannot be armoured with full-fledged anticipatory bail when applicants did not cooperate with the investigation".

Setalvad and her husband have been booked by the Crime Branch of Gujarat Police on charges of cheating, breach of trust and under the IT Act, in a matter relating to the construction of "Museum of Resistance" in the Gulbarg Society in Ahmedabad which was hit by communal riots in 2002.

On February 28, 2002, in the aftermath of the Godhra train burning incident, armed rioters had swooped on the Gulbarg Society and killed 69 people, including former Congress MP Ehsan Jafri.

One of the riot victims from Gulbarg Housing Society, which was burnt during the 2002 post-Godhra riots, had lodged a complaint with the Ahmedabad Police against Setalvad, Anand and two NGOs run by them - Citizens for Justice and Peace and Sabrang Trust - alleging misappropriation of funds to the tune of Rs 1.51 crore.

According to the complaint, the accused persons had collected funds in the name of converting part of the Gulbarg Society into a museum and had allegedly misappropriated funds worth Rs 1.51 crores.

The accused had contended that they have been implicated in the case and were victims of political vendetta. They claimed that they were being targeted by the perpetrators of the riots.

In 2006, the social activists decided to build the 'Museum of Resistance' at the site of the Gulbarg Society. Accordingly in 2009, a part of the plot was sold to Sabrang Trust.

However in 2012, the idea of the museum was dropped as the prices escalated. The same was communicated to the society.

But, according to the complaint filed against Setalvad, funds were collected by her despite the idea being dropped.

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