72-year-old Tunda, who is in judicial custody in connection with various terror attack cases, withdrew his plea after chief metropolitan magistrate (CMM) Amit Bansal transferred his case to a sessions court.
As the case was sent to a sessions court, advocate M S Khan, who appeared for Tunda, withdrew his bail plea with a liberty to file it before the sessions judge.
Tunda had on December 17 moved a bail plea in connection with the 1997 Sadar Bazar blasts case in which a charge sheet was filed against him by the Special Cell of Delhi Police.
The police had opposed his bail plea, saying Tunda was involved in various terror attack cases and he was a "desperate terrorist who washed out the brains of youngsters who became hardcore terrorists and committed many bomb blasts in India in the name of jehad".
The special cell had also said that "strong evidences" against Tunda were yet to be collected from other probe agencies.
Meanwhile, the case was transferred to a sessions court as the offences for which Tunda has been chargesheeted are triable exclusively by a sessions judge.
Tunda, in his bail application, had said he has been chargesheeted by the police only on the basis of "disclosure statements" made by two accused persons who were arrested earlier in connection with the case.
He was chargesheeted for offences under sections 324 (voluntarily causing hurt by dangerous weapon), 307 (attempt to murder) and 120-B (criminal conspiracy) of IPC and the police had claimed he was part of the conspiracy which led to two bomb blasts, one in Sadar Bazar and other in Qutab Road here, on October 1, 1997 in which several people were injured.