The house is located in Mohallah Khudadad area in Peshawar where the 92-year-old actor was born and spent his early formative years.
The Peshawar High Court yesterday summoned the secretary of the culture and archaeology department of Khyber Pakhtukhwa (KP) to appear before it and explain if the government was still interested in acquiring the house.
The court comprising Justice Nisar Hussain and Justice Rohul Amin was hearing the writ petition filed by local trader Lal Muhammad through his counsel Shahnawaz Khan. The trader claimed that the property belonged to him.
The notification of the KP Government stated that no one is allowed to make any alteration in the said house nor could sell it out to anyone.
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After hearing the arguments, the court disposed of the petition and directed the petitioner to approach the concerned department to this effect.
His lawyer had said the house in question could not be called Kumar's ancestral property as his father had sold it out within three days of purchase.
The petitioner had requested the court to direct the government to cancel the acquisition and release the property to the petitioner for his use, sale, transfer, reconstruction and development.
The then provincial government in 2012, on the 89th birthday of Kumar, issued a notification under Section 4 of the Land Acquisition Act 1894 regarding the house.
The actor, who was born as Yousuf Khan in Peshawar in 1922, is enormously loved in both India and Pakistan and for years there have been requests in Pakistan for salvaging his ancestral home.
Kumar, also known as 'Tragedy King' was conferred Pak's highest civilian award, Nishan-e-Imtiaz (Order of Excellence) in 1998.
Pakistan Prime Minister Nawaz Sharif had last year declared Kumar's house a 'national heritage,' that can promote close cultural relations between India and Pakistan.