Principal Sessions Court judge M Nazir Ahamed allowed ED to interrogate him (Lodha) for five days.
The ED counsel had argued that Lodha's custody was required to get the names of other co-accused.
Lodha was arrested in Mumbai on December 21 and later produced before a Delhi court, which had sent him to seven-day ED custody.
After getting a prisoner transit warrant, the ED had brought him to Chennai and he was sent to CBI custody for two days last week.
Lodha's counsel alleged that after arresting Lodha, the ED sleuths in Delhi had told him that he would be let off within a few hours after giving a statement, but, he was subjected to"gross mental torture" for two days and was forced to give a statement.
When Lodha was produced before the Delhi court, he had retracted his statement in an affidavit. Based on the remand statement, CBI had registered an FIR, following which the ED also filed a case.
"The genesis of the whole case was based on a retracted statement," Lodha's counsel said adding, his client was ready to make an independent statement without any interference of ED.
Lodha's counsel also contended that according to legal precedents, custody could not be granted for investigating the name of co-accused.
The case was still under investigation and the Prevention of Money Laundering Act, 2002 had overarching power vis-a-vis the criminal procedure code, he said.
He had voluntarily provided the statement and according to PMLA rules the statement was admissible before court, he said adding ED custody was not similar to police custody.