Punjab Chief Minister Shahbaz Sharif has filed a Rs10 billion defamation lawsuit against Pakistan Tehreek-i-Insaf chairman (PTI) Imran Khan for alleging that he was offered a Rs10bn bribe by a close associate of the chief minister to drop the Panama Papers case against Prime Minister Nawaz Sharif.

Filed in the court of Lahore additional sessions judge Azfar Sultan under sections 4 and 9 of the Defamation Ordinance 2002, the lawsuit states that the PTI chief had claimed in ARY News programme "Off the Record" on April 26 that the Rs10bn bribe offer was made to him through a person related to Shahbaz, on behalf of the chief minister and his family.

Khan's allegation "tended to lower the [Punjab chief minister] in the estimation of others and reduce him to ridicule, unjust criticism, dislike ... and causing him extreme mental torture", the suit states.

According to the lawsuit, the PTI chief had failed to tender a publicly broadcast apology even though he was served a legal notice in May calling for an apology for allegedly defaming the chief minister within 14 days.

As a result of Khan's "false and defamatory allegations", Shahbaz is entitled to a compensation of Rs10bn, it says.

The court has sought a response from Khan over the defamation suit by July 21.

Imran Khan responds

Responding to the defamation suit, Imran Khan said that he does not own Rs10b, and will ask Shahbaz Sharif's sons Salman and Hamza for a loan since "all the children in Sharif family have somehow become billionaires". He was speaking in Nathia Gali on the occasion of multiple political workers joining PTI.

"Defamation suits are filed when someone's reputation is tainted. How can your reputation be tainted when you do not have one?" Khan asked, repeating his accusations of corruption. "I am waiting for you to take me to court so I can tell the world who you really are."

In the events following the Panama Papers case verdict, the PTI chief, while addressing a gathering, had alleged that a mutual acquaintance of his and Shahbaz Sharif's offered him the exorbitant sum of Rs10bn on the condition that he drop the money laundering case against the Sharif family.

Despite stirring up a hornet's nest, Khan has yet to reveal the identity of the individual who offered the bribe, although he has insisted that the person lives in Lahore and that he will reveal his identity in court.