The three-judge court, formed by the government to try 70-year-old Musharraf on charges of high treason for imposing emergency in 2007, rejected the plea by prosecutor Akram Sheikh.
Sheikh had asked for Musharraf's "symbolic arrest". After hearing the court's decision, he asked who would be responsible if Musharraf left the country.
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The court yesterday ordered a medical board to assess the former dictator's health condition and exempted him from personal appearances till January 23.
The board comprising senior doctors of the Armed Forces Institute of Cardiology in Rawalpindi was asked to ascertain Musharraf's medical condition and submit its findings on January 24.
The decision came hours after Musharraf's legal team submitted a letter written by his US-based doctor Arjumand Hashmi, which said the former President should be sent to a facility in Texas for treatment.
Musharraf was taken to the military hospital on January 2 after he developed heart problems while being driven to the special court.
The former military strongman had missed all hearings in his case because of bomb threats and the health scare and there has been speculation that he would be allowed to leave Pakistan for medical treatment.
This is the first time in Pakistan's history that a former general has been put on trial for treason. If convicted, he could be given life imprisonment or the death penalty.
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