C K Raut was charged with the sedition for his recently made secessionist remarks.
The police had arrested Raut on September 14 in Morang district in eastern Nepal.
The government has demanded life imprisonment or a 10-year jail term for Raut, stating he was found guilty of treason as he had been carrying out anti-national activities.
If the court convicts Raut, he will face a minimum jail term of two years, according to the police.
Initially, Raut was booked under the Public Offence Act and the police had carried out an investigation into his campaign for an independent Madhesh region.
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Responding to the petition, a single bench of Justice Cholendra Shumsher Rana had ordered the police to present Raut in person at the court.
However, a division bench had quashed the petition as the Special Court had already allowed the police to keep him in detention to investigate charges of anti-national activities against him.
Raut had been brought to Kathmandu from Biratnagar on September 18.
He had launched a hunger strike for 11 days in police custody saying that his right to freedom and expression was violated by the government.
Raut, a former US-based Nepalese computer scientist, had returned from the US to Nepal in 2011, and has become the central coordinator of the Alliance for Independent Madhesh, a group which is seeking establishment of an independent and sovereign Madhesh, the plains region in southern Nepal.
Madhesi leaders here have asked for unconditional release of Raut.