The case was filed on the directions of Justice Noorul Huque Qureshi of Islamabad High Court, who was annoyed at police's failure to comply with his earlier order in this regard.
During the hearing of a petition filed against 70-year-old Musharraf by Haroon Rasheed, the son of the cleric, Qureshi said non-registration of the case despite his order amounted to contempt of court.
Haroon Rasheed had asked the court to direct police to file a case against Musharraf for alleged involvement in the killing of his father and grandmother.
Reacting to the verdict, Aasia Ishaque, the spokesperson of Musharraf's All Pakistan Muslim League party, said the former President will fight to prove his innocence.
"Musharraf is not going to go away. We were expecting such a case. He will continue to fight the politically motivated case and prove his innocence," she told PTI.
On Friday, the High Court summoned Niazi over his failure to comply with an court to look into whether a case could be registered against Musharraf.
On July 12, the same court had ordered police to book Musharraf and said that if the Lal Masjid operation was a cognisable offence, a case should be registered against him for the death of the cleric and others.
Musharraf, who returned to Pakistan from self-exile in March, is facing serious charges in several cases, including the assassination of former premier Benazir bhutto, the 2006 killing of Baloch leader Akbar Bugti and the imposition of emergency in 2007.
He is currently under arrest and being held at his farmhouse on the outskirts of Islamabad.
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