The two MLAs were sent to judicial custody in Tihar Jail till tomorrow, when the court would hear their bail pleas, as the police sought time to reply on them.
The court said the ground for judicial custody are justified as there are numerous cases against the accused MLAs.
Metropolitan Magistrate Shefali Barnala Tandon directed the concerned Deputy Commissioner of Police to personally monitor the case as it is "highly sensitive".
In its order, the court recorded the submission of the defence counsel that medical examination (MLC) was conducted on Prakash after the lodging of the FIR and nothing was to be recovered from the MLAs. It also noted that the MLAs were ready to cooperate and join investigation whenever required.
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It was submitted that MLC (of Prakash) was conducted after registration of FIR and nothing has to be recovered from the accused. They have submitted it is a political gimmick. The police custody application is dismissed, the court said.
Yesterday, a delegation of IAS and Delhi and Andaman Nicobar Island Civil Services (DANICS) officers met Home Rajnath Singh and apprised him of the situation in Delhi.
The two MLAs were produced before the court amid tight security as a large number of AAP workers and lawyers were also present there.
While Jarwal, an MLA from Deoli, was arrested last night, party legislator from Jamia Nagar, Khan, was taken into custody this afternoon.
During the hearing, public prosecutor Atul Srivastava sought two days police custody of both the MLAs saying they had committed a serious crime of assaulting and humiliating the senior-most officer of the state.
Due to this, the officer has sustained serious injuries and the medical examination report has also been submitted in this regard, he said.
He said a total of 11 persons were involved in the incident and the two MLAs have to be confronted with other accused to unearth the larger conspiracy. The role of the other accused, who are yet to be arrested, also needed to be ascertained, the prosecutor said.
Srivastava claimed that Anshu Prakash was intimidated by the accused and none of the MLAs present there came forward to save him.
Advocate B S Joon, appearing for both the MLAs, opposed the application for police custody and said they were ready to cooperate in the probe. He said the charge of assaulting public servant was invoked in the FIR without conducting the MLC of the bureaucrat.
Both of them are public representatives and not hardened criminals, Joon said, adding this is a fallout of power struggle between the Centre and the NCT of Delhi.
In his complaint, Chief Secretary Anshu Prakash had alleged that he was sitting on a sofa flanked by Khan and another AAP MLA during the February 19 night meeting, and without provocation, the two legislators "started hitting and assaulting" him "with blows on head and temple". The Aam Aadmi Party (AAP) has denied the allegations.
A case has been registered at Civil Lines Police Station in north Delhi on the complaint filed by the chief secretary.
Prakash, on the other hand, claimed that he was questioned about the AAP government's media publicity during the meeting, while the AAP functionaries said he was called to discuss complaints on ration distribution.
The chief secretary in his complaint alleged that the assault was "premeditated" and a "conspiracy" of all those present. Police have filed the FIR including the charge of criminal conspiracy in it.