Iqbal Kaskar, the brother of fugitive don Dawood Ibrahim, was on Monday detained by the crime branch of the Thane Police in connection with an investigation into an extortion case, the police said.
Iqbal was taken into custody from his house in Nagpada area in Central Mumbai by a team led by encounter specialist and the anti-extortion cell's senior police inspector Pradeep Sharma, they said.
According to sources, some extortion calls were made in Iqbal's name to a Thane-based businessman.
The businessman then approached the Anti-Extortion Cell of Thane Police with a complaint.
Acting on the complaint, Sharma's team went to Nagpada and took Iqbal into custody.
He was being questioned by the police officials.
Iqbal, who was deported from the United Arab Emirates in 2003, is said to be operating his brother's real estate business in the city, the police said.
He was wanted in a murder case and the Sara Sahara illegal construction case. However, he was acquitted in both the cases in 2007.
Sharma, who led the team that detained Kaskar, was suspended in Lakhan Bhaiya encounter case and was recently reinstated in the police force.