In a ruling delivered on Wednesday, Justice Emmanuel Baguma dismissed the application after the accused persons declined to proceed with the hearing in the absence of their preferred lead counsel.
The bail application arose from an ongoing criminal case and was filed by a team of 13 law firms representing the applicants.
The matter had been scheduled for hearing on July 3 by consent of both parties, but none of the defence lawyers appeared in court on the appointed date.
According to the ruling, Besigye informed the court that his legal team was facing an internal impasse and insisted that the application could not proceed without Senior Counsel Martha Karua and lawyer Erias Lukwago.
Chief State Attorney Richard Birivumbuka argued that the absence of the two lawyers should not halt proceedings because the applicants were represented by 13 law firms comprising dozens of advocates.
He asked the court to dismiss the application under the provisions of the Judicature Act.
Justice Baguma agreed with the prosecution, holding that the applicants had been given an opportunity to prosecute their bail application but declined to do so.
"There was an opportunity and window for the applicants to apply for bail on their own and produce sureties for court's consideration but surprisingly, the applicants opposed their own application," the judge said.
He added that insisting on specific counsel under the circumstances amounted to an abuse of court process and proceeded to dismiss the application for want of prosecution.
Reacting to the ruling, defence lawyer Samuel Muyizzi criticised the decision, describing it as a "smokescreen of justice."
"We are not surprised by the ruling by Justice Baguma, but we expected he would have found different reasons and not a failure of prosecution. He has the discretion to deny or grant the application, but it has to be judicious," Muyizzi said.
He argued that the court and the state had created conditions that prevented the defence from proceeding, citing the continued exclusion of Martha Karua, whom the defence maintains was the applicants' chosen lead counsel.
"An applicant chooses who represents them before the court, and Besigye chose Martha Karua alone to lead the matter. The decision of the court is not proper and not judicious. Those are double standards. Court was dishonest; there was no abuse of process by the applicant," Muyizzi said.
The lawyer further contended that the court should first have determined a pending application relating to Besigye's right to legal representation of his choice before hearing the bail application.
"The accused had asked the court to compel the state to pronounce itself on the persona non grata order of Martha Karua, but the court has instead chosen for the accused who should represent them," he said.
Muyizzi described the ruling as political rather than judicial and indicated that the defence team would consider its next course of action.
Besigye and Lutale remain on remand as the substantive criminal proceedings continue before the court.