Nikhalje was arrested under Maharashtra Control of Organised Crime Act in 2005 and spent two years behind bars
The police booked him under the stringent Maharashtra Control of Crime Act for allegedly demanding money from a builder.
Crime Branch arrested Chhota Rajan aide Vinod Chembur, a accused in an extortion case, along with the underworld don's wife Sujata.
The process for deportation of underworld don Chhota Rajan has begun even as India and Indonesia are to expedite the work on implementation of an extradition treaty.
Underworld don Chhota Rajan, who was arrested on arrival from Australia, on Sunday received consular access with an Indian diplomat.
Security agencies have decided to bring arrested gangster Chhota Rajan to New Delhi with the Central Bureau of Investigation keeping him in custody for initial period before any other police force is allowed to take him for their respective investigations.
In an explosive claim, arrested underworld don Chhota Rajan on Tuesday alleged that some officials in the Mumbai police are working with India's most wanted terrorist Dawood Ibrahim.
An Indian police team on Monday for the first time questioned underworld don Chhota Rajan and officials believe that he could be deported to India in the next two-three days.
An officer within the Indonesian police was quoted by NDTV saying that Rajan is very scared, constantly smoking and doesn't talk to people.
The 'Chhota don' may be down but certainly not out. And the same can be said of the Ganesh pandal once patronised by him, reports Anil Singh.
'Even if the BJP wins Maharashtra because of a division of votes, I want to be counted as one of those who voted against Modi.'