Metropolitan Magistrate Jitendra Pratap Singh allowed the Delhi Police to quiz 49-year-old accused Manoj Jain, who was arrested on January 21 in connection with the fire tragedy which took place a day before, till January 29.
Jain was produced before the court from judicial custody.
"Having considered the submissions in light of the record, gravity of the incident which had led to unfortunate demise of 17 persons and injury of two others, this court is of a view that the investigating agency deserves every lawful opportunity to investigate the matter fairly.
The police told the court that the custody of the accused was required to nab the absconding co-accused Lalit Goyal.
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Advocate Rishipal Singh, the counsel for the victims, argued before the court that the accused was running the factory without any licence and the explosive materials were procured from outside Delhi.
The probe agency claimed that the explosive materials were brought into the city without any permission or checking and it wanted the custody of the accused to verify whether he was running any other such illegal enterprises.
The fire had started in the storage unit on the ground floor of the two-storey building on January 20 and ripped through the structure. Of the 17 killed, 10 were women. A man and woman were also injured.
An FIR was registered under various provisions of the IPC relating to culpable homicide not amounting to murder and negligent conduct with respect to fire or combustible material. The maximum punishment for the offences is 10 years.