Standing firm in the court on not seeking bail, Kejriwal also refused to furnish a personal or surety bond, saying he had been following the same principle in other cases lodged against him.
After Kejriwal refused to seek bail and furnish any personal or surety bond, Chief Metropolitan Magistrate (CMM) Sanjay Bansal released him on an undertaking that he would appear on every date of hearing.
Dikshit's political secretary Pawan Khera had filed a defamation case against Kejriwal for allegedly making "derogatory remarks" and "baseless" allegations against her last year during protests on power tariff hike.
Khera accused Kejriwal of using "false and filthy" language against Dikshit in a television show.
Refusing to seek bail, Kejriwal told the court that he does not want bail and he was ready to face the consequences. He added that giving a surety would imply there was a chance he might flee, which was not the case.
Kejriwal further told the court that he was ready to give an undertaking that he will appear in the court on every hearing of the case.
The judge said: "This issue regarding bail will be decided on the next date of hearing. Let the accused put his signature on the order sheet and submit that he will appear on every hearing. This be taken as his undertaking. This will be valid till the next date of hearing only."
The court fixed Aug 17 for hearing arguments on framing of charges against Kejriwal.
Kejriwal earlier opposed the complaint saying it had been filed by Khera, and not by Dikshit.
He had admitted to the allegations levelled against him but said if the chief minister felt defamed, she should have filed the defamation case herself.