This post should have happened a long time ago. Apologies. Basically, it seems that the Supreme Court had provided Musharraf with the legitimacy he needed to stay in power (a role that the Pakistani judiciary has played in the past as well for other military leaders). Maybe after seven years in power he thought he was now legitimizing the judiciary, but this turned out not to be the case.
On March 9, Pakistani president Pervez Musharraf called Supreme Court Chief Justice Iftikhar Muhammad Chaudhry to his Rawalpindi office and non-functionified him.
Although the country's judicial history has been a chequered one all along, and judges have been removed by various methods, this is the first time that the chief justice of Pakistan has been made, in the words of the official handout, 'non-functional' and his case has been sent to the Supreme Judicial Council for action.
The president's orders came in the afternoon, and within minutes took the country by storm. Many in the legal fraternity were shocked by the way the country's top adjudicator had been treated. Among them was the President of the Supreme Court Bar Association, Munir A. Malik, who described it as a 'blatant attack on the independence of the judiciary', and former chief justice Saeeduzzaman Siddiqui.
Still, a few thought it was bound to happen as, according to them, the chief justice's style of judicial activism, and his personal conduct on some issues, was a bit too unsettling for the government. The most vocal defender of the move was the minister of state for information, who said the president had no choice but to take action after serious allegations of misconduct and misuse of authority had been levelled against the chief justice (Dawn).
For insight into the Pakistani judiciary's "chequered" past (granting legal legitimacy to military rulers), I recommend this post from Sepoy at Chapati Mystery. The Glasshouse has been an excellent resource for almost daily updates on the situation as it's developed, and if you don't require a background summary, I would strongly recommend that you stop reading this right now and go there instead.
The mess really started when Chaudhry refused to resign and instead tried to return to the Supreme Court office. He was stopped by police and "escorted" home, where he remained incommunicado:
The Pakistan Bar Council described the action as a case of 'illegal house arrest'. "Yes, he is in illegal detention," Ali Ahmed Kurd, vice-chairman of the PBC, told reporters outside the official residence of the chief justice.
"There is no other way to describe the situation as no one is being allowed to meet him," he said after police officials stopped him and other lawyers from going inside the chief justice's residence (Dawn).
In hearings the following week, Chaudhry disputed the charges levied against him. As I write this I'm having problems with non-functional links, but the wikipedia page on Chaudhry has a chronological account of his suspension and the major events since then.
So why did Musharraf decide to take on the judiciary - specifically Chaudhry? The Daily Times carried an article which mentioned a number of "decisions that irked the government," but
The most important recent case was the missing persons case, wherein the chief justice ordered the government, through the Interior Ministry and Defence Ministry, to recover the missing persons and help end the phenomenon of forced disappearances. The case is still continuing, and the court only last Thursday heard a Human Rights Commission of Pakistan petition alleging that the government was responsible for the disappearances of 148 citizens (Daily Times).
More on that in another post.
In the days and weeks that followed Chaudhry's suspension, lawyers all over the country took to the streets in protest, and police equipped with riot gear were there to greet them. From BBC News, a photo from Lahore:

Tens of thousands of supporters lined the roads and showered rose petals on Chief Justice of Pakistan (CJP) Iftikhar Muhammad Chaudhry on Saturday as he travelled from Islamabad to Lahore via GT Road to address a reception of the Lahore High Court Bar Association.
The chief justice, sitting in a vehicle driven by his lawyer Aitzaz Ahsan, set out from Islamabad in a convoy of around 30 cars displaying black flags at around 7:45am, ignoring the government's advice that he travel by road. The convoy had swelled to over 200 cars and was several kilometres long by the time it reached Ravi Bridge at around 5:00am on Sunday morning, a journey that would normally take four hours taking almost 21 hours. Thousands of opposition supporters and lawyers stayed up all night in anticipation and still thronged the Lahore High Court building and areas surrounding it on The Mall as they waited for his address.
The convoy was repeatedly held up along the way by crowds of supporters in Rawalpindi, Mandar, Gujjar Khan, Jehlum, Kharian, Lala Musa, Gujrat, Gujranwala, Kamoke, Muridke and Kala Shah Kaku (Daily Times).

"Nations and states which are based on dictatorship instead of the supremacy of the Constitution, the rule of law and protection of basic rights get destroyed," Chaudhry, 58, said in the compound of the Lahore High Court to thousands of lawyers, 16 of Punjab's 23 judges, and opposition activists outside on the street. The reception was organised by the Lahore High Court Bar Association.
"The idea of dictatorship and collective responsibility are over," he said. "They are chapters from the past and those nations which don't learn lessons from the past and repeat those mistakes, they have to pay a price," he said in his 45-minute speech. He said that the Supreme Court had the right to take up basic human rights which were the backbone of a civilised society. He added that no person was above the law and that was why he had taken up and decided human rights cases on merit. "I received 12,000 complaints when I assumed charge as the CJP and decided 6,000 cases till March," he said (Daily Times).

Anil's post was also good, though I thought (in typical American fashion) he overplayed the 'war on terror' angle. Liberal discontent against Musharraf has been growing for a year or two (as you described in you post on Mohsin Hamid's NYT op-ed). The army-fication of all parts of civil society over the past decade has rankled a lot of liberals, and Musharraf's attack on the justice system was one step too far. It's not really about secret detetnion or disappearances, but military arrogance.
Indeed, much has been made of Musharraf in the international press as the only force preventing Pakistan from slipping into Nuclear Islamist Chaos; wouldn't it be deliciously ironic if Musharraf in the end fell to democracy and the rule of law?
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Thanks for writing this up, Vivek!
Recent reports coming out of Pakistan:
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