Shobhit Kapur, a local leader and resident of the Chowk area of Faizabad, was arrested by police for his involvement in the riot on October 24 of last year.
He was charged with leading the mob that looted and burned about 100 shops in the area.
The charges under NSA were slapped on Kapur by the then Faizabad District Magistrate, AK Shukla after the same was recommended by then SSP, DS Yadav.
The bench then issued instructions for Kapur's immediate release.
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Thereafter, the acting Faizabad DM, AP Singh, late last night issued the release orders for Kapur.
The petition stated that though a representation regarding Kapur's case was sent to the Centre in December last year, a decision on it was taken only in February 2013.
The bench said that the representation was pending from December 17 last year till it was disposed of on February 2.
"We are of the opinion that on account of this unexplained delay, further detention of the petitioner is vitiated," the court said, adding that, "Further detention of the petitioner... Is hereby set aside".
It directed that Kapur be freed forthwith unless wanted in any other case.