Geeta Manek and Sheela Bhatt in New Delhi
Dawood Ibrahim's closest associate Chhota Shakeel, alias Shakeel Mohammad, is believed to have been killed in Karachi, Pakistan.
Chhota Shakeel was wanted in several criminal cases in Bombay.
According to rediff.com sources in Pakistan, Shakeel was reportedly attacked on Friday by an armed gang.
Shakeel's aide Saeem Mohammad, alias Machmach, is also believed to have been killed in the shootout.
Izaz Pathan, a former member of Dawood gang, is suspected to be behind the murders.
Senior police officers in Bombay said they had no confirmation of Shakeel's murder.
Members of Dawood gang, it is understood, have been unable to contact Shakeel since Friday evening.
Dawood, sources said, is completely shaken by the news and is under medical supervision.
"If Shakeel is even touched by someone, he will not be forgiven. Woh mere liye bhai se bhi badhkar hai (he means more to me than a brother)," Dawood had said a few months back.
Chhota Shakeel met Dawood in his early twenties in Timkar Street area in south Bombay. A shrewd planner, Shakeel, quickly rose to become Dawood's close confidante.
His growing clout was believed to be the reason for the break-up between Dawood and Chhota Rajan.
Chhota Rajan survives murderous attack
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