On December 18, 2014, the Islamabad Anti-Terrorism Court granted bail to Lakhvi, who was allegedly involved in planning, financing and executing the deadly terror attack in November, 2008 in India's financial hub.
The government in the first week of January had challenged the bail to Lakhvi in the Islamabad High Court.
A two-member bench headed by Justice Shaukat Siddiqui subsequently took up the plea and summoned Lakhvi for arguments.
The prosecution informed the court in its petition that the trial court ignored testimony in the case while granting bail to Lakhvi.
Also Read
Lakhvi has been detained under the Maintenance of Public Order (MPO) till the second week of March.
The IHC today also dismissed the detention case after the government on February 13 issued a fresh detention order for Lakhvi.
However, the government challenged the decision in the Supreme Court which suspended the IHC order and directed it to listen to the government's point of view before reaching a final decision.
The prosecution provided 'classified' information about Lakhvi during in-camera proceedings.
"The IHC dismissed the case as Lakhvi did not challenge his detention under new MPO order issued on Feb 13," Chaudhry Azhar said who is also a special prosecution of the Federal Investigation Agency.
Lakhvi and six others - Abdul Wajid, Mazhar Iqbal, Hamad Amin Sadiq, Shahid Jameel Riaz, Jamil Ahmed and Younis Anjum - have been charged with planning and executing the Mumbai attack in November, 2008 that left 166 people dead.