I did a lot of research and a few phone calls to figure out the entire process. Posting it for the benefit of everyone here. For making it clear: I reside in India now and I had worked previously in Bahrain.
My first option was to speak to the Bahrain Consulate and Embassy (in Mumbai and New Delhi respectively) and check how they could help me with it. They informed me that 3 months is what it takes if I go through Embassy/Consulate and they say in some cases it has taken more than that as well, so they don't guarantee.
Next I spoke to an agent who was suggested by the Embassy staff. He sent me the documents and again said it takes 2 months. When I asked him if this is very urgent, how soon can he arrange it.... his reply was a month. He was asking for Rs. 3500. But finally I decided to do it directly with the help of an old friend in Bahrain because from Bahrain it takes only 5 working days.
The process:
1. Download the form. Fill it up. Link to the form -
http://www.bahrainconsulate.com.ph/good-conduct-certificate/ (but I personally used a different form with 3 pages which had columns for fingerprints and authorized sign and seal from police). Make sure you do it from Police Station and not from a lab. I had confirmed with Bahrain officials regarding this and they specified that they require authorized seal and signatory of a Police Official, sub-inspector or higher.
2. If in India, go the police station/commissioner office, get them to do your finger prints. I did it by paying a fee of Rs. 500 for the process at commissioners office (where we apply PVC for jobs) and got my fingerprints taken at local police station. The finger print has to be in black ink. Usually there is another prescribed format for taking fingerprints at the police station. But you can take the Bahrain form along and do it at the same time. If they are not willing to do it, you can attach what you get from the police station.
3. Once your application is done, take photocopies of CPR, Residence permit in passport, entry exit pages and visa page. If you have a new passport, do include front and back photocopies of the same.
4. 3 passport size photos with white background. (I was unsure if it is white or dark blue, I included both)
5. 1 BD application fees. (put it in that envelope as well.)
6. Letter of request from you indicating the purpose.
7. Authorization letter (if someone else is going on your behalf)
I had spoken to the officer in this number (0097317714202 from sun-thu, working time I'm guessing as 9am to 4pm). Since I had someone take care of the delivery part, I didn't bother asking for the address but only reconfirmed the documents required.
My Good Conduct Certificate got issued in 5 working days. Thanks to my friend!