The order by Justice A V Chandrashekhara came after Special Public Prosecutor Bhavani Singh told the court he had no objection to granting conditional bail to Jayalalithaa, who is in prison here since her conviction by the Special Court on September 27.
In his order pronounced in a packed court room, the judge said there "are no grounds" to give bail to the former Tamil Nadu Chief Minister and observed that corruption amounts to "violation of human rights" and leads to economic imbalance.
As the SPP told the court that he was not opposed to bail for Jayalalithaa, AIADMK supporters, who had gathered near the Parappana Agrahara jail, where Jayalalithaa is lodged, and near the court, went delirious anticipating her release. When the verdict came, they went into a state of disbelief.
"My client will take a call," senior counsel Ram Jethmalani, who appeared for Jayalalithaa, told PTI, after the verdict when asked whether they will approach the Supreme Court.
Many areas in Tamil Nadu, where AIADMK members were staging demonstrations, protests and even pujas are under high alert as violence is feared in wake of adverse court order.
The court also rejected the pleas for bail by Jayalalithaa's close aide Sasikala and her relatives V N Sudhakaran, disowned foster-son of the former Chief Minister, and Ilavarasi, who have also been sent to four years in jail in the 18-year-old case.
In his submission, Jethmalani strongly pleading for immediate bail to 66-year-old Jayalalithaa, cited the Supreme Court verdict granting relief to former Bihar Chief Minister Lalu Prasad in the fodder scam.
The court did not accept the submission, with the judge noting that Lalu Prasad had spent 10 months in jail before being granted bail by the apex court.
Arguing for the AIADMK supremo, Jethmalani also earlier pleaded for suspension of the sentence by the Special Court which had sent her to four years in jail.
Jethmalani asked for suspending the sentence pending appeal under Section 389 of the Criminal Procedure Code, under which pending any appeal by a convicted person, the appellate court may order that the execution of the sentence or order appealed against be suspended. Also, if the person is in confinement, that he or she be released on bail, or on own bond.
The "regular practice" was to give bail, Jethmalani told Justice Chandrashekhara who took up the matter which was posted for today by the vacation bench on October 1.
Jethmalani also said appeals should be heard within a reasonable period of time.
Criticising the judgment of the Special Court in the Rs 66.65 crore disproportionate case, he said assets prior to the period between 1991 and 1996 (when Jayalalithaa was Chief Minister) could not be taken into account. There was nothing disclosed in the conduct of Jayalalithaa to show that she might abscond, he contended.
Counsel Amit Desai, appearing for Sasikala, Sudhakaran and Ilavarasi pleaded for bail, telling the court that no witness talked of assets acquired by the three and suspicion cannot take the place of evidence.
Special Court Judge John Michael D' Cunha, in his verdict, had held Jayalalithaa and three others guilty of corruption that unseated her as the Chief Minister. He had slapped a fine of Rs 100 crore on Jayalalithaa and Rs 10 crore fine each on the three other accused.
In her petitions seeking immediate bail and challenging her sentence, Jayalalithaa maintained that the charge of amassing wealth against her during 1991-96 when she was the Chief Minister for the first time was false and that she had acquired property through legal means.
She also contended that the trial court had overlooked several judgements and not considered the binding nature of various income tax orders and decisions of the Income Tax Appellate Tribunal, which had accepted the income and the level of expenditure pleaded by her.
Tight security was in force around the Karnataka High Court complex as also the Parappana Agrahara jail with police perconnel deployed in good strength anticipating a rush of AIADMK supporters and leaders.
Prohibitory orders are in force in the vicinity of the court and the jail, close to the entry point from Hosur on Karnataka-Tamil Nadu border where the police kept a close vigil on entry of vehicles.
The vacation bench had on October 1 deferred the matter till today to be taken up by a regular bench after the end of Dasara vacation.