Avnish Bajaj being produced in court on Saturday. (PTI)

New Delhi, Dec. 18: The school sex-clip scandal appears to have found its way into Indo-US relations.

National security adviser and secretary of state-designate Condoleezza Rice has urged Delhi to look into the safety of Avnish Bajaj, the arrested CEO of Baazee that runs the online auction site on which video discs of the escapade were sold.

The India-born US citizen was today sent to judicial custody for seven days by a Delhi court, but not before a flip-flop by the prosecution on seeking remand or ?conceding? to grant of bail.

Rice conveyed her concern through David Mulford, the US ambassador in Delhi. Highly-placed sources in the government said South Block has taken note of her request but informed her through the ambassador that the case is ?sub judice? and the law of the land must be respected.

Late this evening, the US embassy in a statement said it was following the developments ?very closely and there is high level of interest in Washington regarding the case?. It added that ?consistent with normal US consular practices, the hearing today was attended by a US consular officer?.

The arrest of the Baazee CEO, who has been based in Mumbai for the past four-and-a-half years, has perplexed many in the Indian establishment as Bajaj has responded to summons to help the investigators probing the case. ?He, as well as baazee.com, had been cooperating in the investigations. The arrest has come totally out of the blue,? said a representative of the portal present in the court.

In Mumbai, the Baazee office appeared deserted except for a few key people. ?We are outraged that the police have objected to the release of Mr Avnish Bajaj, the country manager of baazee.com ?an eBay company ? in connection with the sale of an MMS clip by a third party on the website,? said spokesperson Deepa Thomas.

Yesterday, Meg Whitman, CEO of eBay ? the America-based online auctioneer which acquired Baazee for $50 million in June this year ? called up from the US to reassure Baazee staff.

Condoleezza Rice: Concerned

The police produced Bajaj in the court of metropolitan magistrate Nivedita Anil Sharma around 2.30 this afternoon. Bajaj?s counsel Dinesh Mathur pleaded that his client had at no point attempted to evade the police. Moreover, with the site having more than 75 lakh listings, it was impossible to scan each and every item being traded.

Mathur said the video clip ? featuring the sexual act between two students of Delhi Public School, R.K. Puram ? was taken off the site after it was brought to the notice of Baazee officials that it was violating a user agreement (an electronic document). He said the agreement required persons using the website?s services to avoid obscene and pornographic material.

?Thereafter, if the user violates it, we have no control,? Mathur said. ?The moment we know of it, such material is removed.?

The magistrate, however, said the user agreement did not stand as it was not ?signed? and was just a photocopy of a document. The court dismissed the bail plea, saying investigations were still incomplete and the offences alleged did not warrant grant of bail.

However, what came as a surprise was the prosecution?s flip-flop. Though the police had moved an application for custody, additional public prosecutor Kumar told the court that the police had no objection to Bajaj being released on bail. Investigating officer S.D. Mishra agreed with Kumar but added that Bajaj would have to surrender his passport and cooperate with the probe.

About half an hour later, another additional public prosecutor, Pankaj Bhatia told the court that the prosecution had not ?conceded? to the grant of bail to Bajaj. ?We are seeking his judicial custody,? he said.

DPS today moved an application seeking an in-camera trial of the case. ?All those guilty and responsible for any offences must be dealt with sternly,? . DPS counsel Puneet Mittal said. ?However, we are concerned that the name and reputation of DPS is being dragged in the court.?