Mahendroo, a joint director general in the CWG OC, has been in jail since November 15 last year after he was arrested along with his colleague T S Darbari.
Special CBI Judge O P Saini enlarged Mahendroo on bail after CBI failed to complete the investigation and file its chargesheet in the case within the stipulated 60 days period after registration of the FIR.
The court also took into account the Delhi High Court`s order, which had yesterday granted bail to another co-accused T S Darbari in the case.
"In pursuance of the Delhi High Court order, the accused is enlarged on bail as the CBI could not file the chargesheet within 60 days," the special CBI judge said.
Darbari, a former official of the CWG Organising Committee and another close aide of Kalmadi, too had been given bail on account of CBI`s failure in filing the chargesheet within 60 days.
The court granted bail to Mahendroo on a personal bond of Rs 50,000 with two sureties of the same amount and asked him not to leave the country without its permission.
It also cautioned him against trying to influence prosecution witnesses or tamper with the evidence in the case while remaining out on bail.
The Delhi High Court had yesterday granted bail to Darbari and had deferred the hearing on the bail plea of another co-accused M Jayachandran, joint director (finance) in the CWG OC, to January 17.
The CBI has time till January 20 to file its chargesheet against Jayachandran, who was arrested on November 21, failing which he too would have to be released on bail.
The accused are facing charges of causing losses to the exchequer in award of contract to the tune of Rs 1.55 crore with regard to the QBR on October 29, 2009 in London before the Commonwealth Games.
The CBI had registered two cases in connection with contracts awarded to London-based A M Films and AM Car and Van Hire Limited at exorbitant rates.
The agency had conducted searches at their premises besides the OC headquarters here.
The first case was registered by the CBI under different sections of the IPC and Prevention of Corruption Act in relation to the award of contract to AM car and Van Hire Limited.
The CBI has questioned Kalmadi and carried out searches at his premises in Delhi, Pune and Mumbai.
The agency has named Darbari, Mahendroo, Jayachandran, OC Director Raj Singh, Director of transport firm Ashish Patel, and other unknown persons under sections 468 (forgery of court records and public documents), 471 (using forged documents as genuine), 120-B (criminal conspiracy) of IPC and Prevention of Corruption Act.
The second case involves London-based A M Films and the probe agency had named Patel, Mahendroo, Darbari and others under sections 420 (cheating), 120-B (criminal conspiracy) of IPC and Prevention of Corruption Act.
The accused are already facing charges of violation of Foreign Exchange Management Act (FEMA) and have been questioned by the Enforcement Directorate.
The ED had registered its first case under FEMA in CWG after British authorities referred to the Indian High Commission a matter regarding A M Films, a little-known company, to which a huge sum of money was transferred through the Royal Bank of Scotland.