Vellappally, who contested against Congress leader Rahul Gandhi in the 2019 Lok Sabha elections from Wayanad constituency, was released on bail by Ajman Public Prosecution.
However, he has been prohibited from travelling without clearing the civil case, his uncle K.S. Vachaspathy confirmed to Gulf News.
"He is with me now," said Vachaspathy, who is also the central committee secretary of Sree Narayana Dharma Paripalana Yogam, the Ezhava community outfit in Kerala headed by Thushar Vellappally's father Vellappally Nateshan.
Vachaspathy said Thushar was held in connection with a Dh9 million cheque of his company that was closed down 11 years ago.
"We have fulfilled the conditions for securing the bail. But, he will have to clear the civil case for travelling. We are sure that he will be able to do that because this is a clear case of cheating as he had never issued any such cheque in the name of the complainant. This must be a stolen cheque or Thushar's confidante, with whom he used to keep blank cheques when he used to travel might have cheated."
Another aide of Thushar said his company was closed down after completing all legal formalities.
"An advertisement was also published in newspapers asking people who have any claims to approach the company. Nobody had made any such claims then. He has travelled to the UAE many times after the company was closed. His last visit was just two months ago."
The case was filed by a Thrissur resident Nassil Abdullah after his cheque bounced.
Several political bigwigs and even Indian businessmen in the UAE were involved in negotiations to get the case closed, sources told Gulf News.
Kerala Chief Minister Pinnarayi Vijan also wrote to External Affairs Minister S. Jaishankar to seek his "personal attention and intervention".
"All possible help within the limits of law needs to be made available to him," he requested in the letter.
The BDJS chief, who was the National Democratic Alliance (NDA) candidate from the Wayanad parliamentary seat, was earlier lodged at a jail in Ajman.
BDJS is the second biggest ally of the Bharatiya Janata Party-led NDA in Kerala. Thushar Vellapally lost his deposit when he managed to get a mere 78,816, votes in the election which Gandhi won with the highest-ever margin in Kerala of over 4.30 lakh votes.
( With inputs from IANS )