The trio made headlines on October 8 by jumping into the well of the house, demanding implementation of employment policy in the state.
The court rejected the prosecution plea that the offence committed by the youth was of very serious nature and should be deemed as an attack on the highest legislative body of the state.
The youths were arrested following instructions of legislative assembly speaker Mohammad Akbar Lone, who termed their act as contempt of the house.
Lone also ordered initiating proceedings against expelled BJP MLA Jagdish Raj Sapolia, who had facilitated the entry of the youths into the Public gallery by getting the required passes.
The youth were associated with a newly-floated political party, Jammu and Kashmir Democratic Front, of which Sapolia is a member.