Shah has been booked for waging war against the country by Delhi Police which claimed he was planning to carry out terror attacks in the national capital.
District Judge I S Mehta allowed the NIA's plea seeking permission to interrogate Shah in the jail itself.
"I have perused the application. The same is allowed. Chief investigating officer (of NIA) along with his team is allowed to interrogate Sayyed Liyaqat Shah in Tihar Jail till April 30, 2013 as and when required," the judge said.
While Delhi police has claimed that with Shah's arrest they had foiled a 'fidayeen' (suicide) attack in the capital ahead of Holi, its J-K counterpart insisted that he was one of those who had exfiltrated in 1990s and had returned to India to surrender under the state's rehabilitation policy.
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45-year-old Shah, a resident of Jammu and Kashmir, was sent to judicial custody by a court here till April 12 after he was produced before it on expiry of his 15 days of police custody.
The police had earlier said that Shah was apprehended on March 20 from the Indo-Nepal border area near Gorakhpur in Uttar Pradesh and during had revealed during interrogation that he is a trained militant of banned terror group Hizbul Mujahideen and was settled in Muzaffarabad in Pakistan occupied Kashmir (PoK).