Hafiz Saeed had yesterday moved the court seeking protection from arrest or action against Jamaat-ud-Dawa or JuD and Falah-i-Insaniat Foundation (FIF) ahead of the visit of the monitoring team of the United Nations Security Council 1267 Sanctions Committee.
The team will be visiting Islamabad from tomorrow for an assessment of Pakistan's compliance with the world body's sanctions regime.
In his plea, the global terrorist claimed that the government wants to arrest him at the behest of the United States and India, whose lobby for the last many years wants to prove that he was "somehow involved in Mumbai attacks".
Justice Amin Aminuddin Khan heard Hafiz Saeed's plea and refrained the government from taking any adverse action against him.
"The Lahore High Court today accepted JuD chief Hafiz Saeed's application and issued order restraining the federal government from arresting him till futher order," a court official confirmed to news agency PTI.
He said the court also issued notice to the government to file its reply on March 17.
Appearing for terror group Lashkar-e-Taiba's founder Hafiz Saeed, his counsel Advocate AK Dogar told the court that the UN Security Council delegation was due in the country this week and the government intends to take an "adverse action" against him during the team's stay in the country.
He said the government may arrest his client at the behest of the US and India.
The UN team's visit is taking place amid increasing pressure on Pakistan from the United States and Indian governments with respect to inadequate implementation of the sanctions on global terrorist Hafiz Saeed and entities linked to him.
The State Department had said last week that the United States had clearly conveyed its concern to Pakistan on Hafiz Saeed and called for his prosecution "to the fullest extent of the law".
It also said that Hafiz Saeed's name was on the UN list of designated terrorists.
Hafiz Saeed was listed under UN Security Council Resolution 1267 in December 2008. The UN Security Council sanctions list includes the names of JuD, Lashkar-e-Taiba, Al-Qaeda, Tehreek-e-Taliban Pakistan, Lashkar-e-Jhangvi, FIF and other groups and individuals.
The UNSC monitoring committee oversees the sanctions measures imposed by the Security Council under the rules. The member states are required to freeze without delay the funds and other financial assets or economic resources of designated individuals and entities.
Last week, Pakistan banned companies and individuals from making donations to the JuD, the FIF and other organisations on the UNSC sanctions list.
The Jamaat-ud-Dawa is believed to be the front organisation for the Lashkar-e-Taiba which is responsible for carrying out the 2008 Mumbai terror attack that killed 166 people. It has been declared as a foreign terrorist organisation by the US in June 2014.