"The government is ordered to release JuD chief Hafiz Saeed if he is not wanted in any other case", said the Pakistani board which was headed by Justice Abdul Sami Khan.
The US State Department also said that it was displeased by the Pakistani court's verdict to release Saeed from house arrest.
The decision in Lahore also flies in the face of a USA offer of a $10 million bounty for Saeed for his suspected role in the Mumbai attacks.
Mumbai: The lawyer of lone captured terrorist of 2008 Mumbai terror attacks Ajmal Kasab, Abbas Kazmi, on Thursday termed Hafiz Saeed's release from house arrest in Pakistan as shocking.
A U.S. department spokesperson told The Hindustan Times that United States government has designated Saeed as a Specially Designated Global Terrorist under Executive Order.
The provincial government of Pakistan's eastern province of Punjab had asked for an extension to Saeed's detention but the request was turned down by the court, prosecutor Sattar Sahil told Reuters.
In May 2008, the United States had designated Saeed as a "Specially Designated Global Terrorist" under Executive Order 13224. "We did not believe that Pakistan was serious about cracking down on Saeed and his outfits in the first place", said an official.
The banned Jamaat-ud-Dawah (JuD) head, carrying a bounty of $10 million announced by the U.S. for his role in terror activities, had been under detention since January 2017.
In an interview with The New York Times in September, Naveed Qamar, the Milli Muslim League's campaign manager, said the party had the blessings of Mr. Saeed, who would lead the party once he was released. He has repeatedly denied his role in the Mumbai attacks in which 166 people were killed. Saeed heads the Jamat-ud-Dawa, or the JuD, which poses as a charity, but is a front for the terror group Lashkar-e-Taiba (LeT).
"The United States reiterates its stance that LeT is a designated Foreign Terrorist Organisation responsible for the death of hundreds of innocent civilians in terrorist attacks, including a number of American citizens", a state department spokesperson said.
The Pakistan government has reportedly told a judicial body that the country could face worldwide sanctions if Jamaat leader Hafiz Sayeed is released from house arrest.
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