Chief Metropolitan Magistrate Sanjay Khanagwal said prosecution has failed to prove its case and there was lack of evidence against 44-year-old activist of banned Student Islamic Movement of India (SIMI).
Several other cases are still pending against him.
Badr, who was out on bail in the case, was freed of charges under sections 153A (promoting enmity between groups), 153B (imputations, assertions prejudicial to national integration) and 505 (false statement, rumors circulated with intent to cause mutiny or offence against public peace) of Indian Penal Code.
He had said the alleged incident occured in January 2001 and the case was lodged in May. Badr's arrest in this case took place after a month of his arrest in another case.
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An FIR was lodged against unknown persons at New Friends Colony police station on May 19, 2001 by Delhi police for allegedly pasting a sticker on the wall of Jamia Millia Islamia University having provocative content. The case was later transferred to the Special Cell of Delhi Police.
Badr, then national president of banned outfit SIMI, was arrested in October 2001 from its headquarter at Zakir Nagar in south Delhi.
Besides other provisions, he was also booked for offence of sedition under section 124A of IPC but discharged of this section at the stage of framing of charges in 2002.
According to the police, the sticker was pasted on January 10, 2001, but the case was registered in May 19, 2001, when SIMI was not a banned organization. SIMI was banned by the government on September 27, 2001.