The court also launched a separate case to look into how police pressed charges against baby Mohammad Musa after his family clashed with gas company officials in a working class neighbourhood in the eastern city of Lahore.
Police lodged a case against the whole family.
The case drew international attention and sparked ridicule against the Pakistani criminal justice system, after the toddler was photographed crying his lungs out while being fingerprinted in court. His grandfather was later seen trying to comfort him with a milk bottle.
Inspector Kashif Muhammad, who was at the crime scene and pressed attempted murder charges against the baby, has since been suspended.
The charges were in direct contradiction with Pakistan’s minimum age of criminal responsibility, which was raised from seven to 12 years in 2013 except in terrorism cases.
Police told judge Rafaqat Ali Qamar Saturday that the baby was “no longer required in the case”.
Musa’s grandfather, Muhammad Yasin, subsequently withdrew a bail application for the baby as the court dropped the case.
Yasin had accused police of fabricating the charges because they were colluding with a rival party who wanted to see the accused evicted from their land and had obtained an order to remove their gas connections.