The apex court nullified the Special Court's decision to send 60-year-old Dixit to a 10-day judicial custody.
Dixit, who is also the Chairman of Sajha Yatayat - the public transportation bus system in Nepal which serves Kathmandu Valley, was produced before the Supreme Court today.
Responding to a habeas corpus writ filed by his wife Shanta Dixit, the court had earlier directed the Commission for Investigation of Abuse of Authority (CIAA) to produce him before it.
Dixit was arrested on April 22 on the charge of amassing property through illegal means in the capacity of chairman of Sajha Yatayat, a public transport corporation.
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He was admitted next day to the ICU of a hospital after he complained of high blood pressure.
The Special Court had remanded him to a 10-day judicial custody effective from Friday.
Dixit, the publisher of Himal and Nepali Times magazines, is considered well-disposed towards India and also writes for leading India media outlets.