A Pakistani court on Monday issued notices to the Punjab province's government and counter-terrorism department (CTD) to file a reply by October 28 on the petition of Mumbai attack mastermind and JuD chief Hafiz Saeed challenging his arrest in a terrorism financing case.

Saeed, a UN designated terrorist on whom the US has placed a USD 10 million bounty, was arrested on July 17 in the terror financing case. He is lodged at the Lahore's Kot Lakhpat jail in high security.

'A Lahore High Court two-member bench headed by justice Mohammad Qasim Khan held the hearing of Saeed and others' petition. The court issued notices to the Punjab government and CTD of Punjab police to file a reply by October 28 on the issue,' a court official told PTI after the hearing.

Representing the Jamaat-ud-Dawa (JuD) chief, advocate A. K. Dogar said: 'Saeed and other 67 nominated in the terror financing FIRs are not terrorists. Saeed has no link with Lashkar-e-Taiba (LeT) or Al-Qaeda. The properties allegedly owned by him in fact belong to seminaries.'

He prayed the court to quash all 23 FIRs related to terror financing against Saeed and others.

The CTD had registered 23 FIRs against the petitioners on the charges of 'terror financing' in different cities of Punjab province and arrested Saeed on July 17.

The cases have been registered in Lahore, Gujranwala and Multan for collection of funds for terrorism financing through assets/properties made and held in the names of Trusts/ Non-Profit Organisations (NPO) including Al-Anfaal Trust, Dawatul Irshad Trust, Muaz Bin Jabal Trust, etc.

The CTD said investigation launched into financing matters of proscribed organisations – JuD and LeT – in connection with implementation of UN sanctions against these designated entities and as directed by NSC (National Security Committee) in its meeting of January 1, 2019, chaired by Pakistan Prime Minister Imran Khan for implementing the National Action Plan.

'These suspects made assets from funds of terrorism financing. They held and used these assets to raise more funds for further terrorism financing. Hence, they committed multiple offences of terrorism financing and money laundering under the Anti-Terrorism Act 1997. They will be prosecuted in ATCs (Anti-Terrorism Courts) for commission of these offences,' the CTD said.

Last week, the high court allowed transferring of Saeed's case from anti-terrorism court Gujranwala district of Punjab to Lahore's court on the ground that there is a 'threat to his life' while transporting him there.

Saeed-led JuD is believed to be the front organisation for the LeT which was responsible for carrying out the 2008 Mumbai attacks that killed 166 people. He was listed under the UN Security Council Resolution 1267 in December 2008.

The US department of the Treasury has designated Saeed as a specially designated global terrorist, and the US, since 2012, has offered a USD 10 million reward for information that brings Saeed to justice.