Lakdawala, who was associated alternatively with the gangs of rival mafia dons Dawood Ibrahim and Rajendra Nikhalje, alias Chhota Rajan, had an Interpol red corner notice pending against him.
"Lakdawala was a part of the Dawood gang. He might help us get important information about him," Joint Police Commissioner (Crime) Santosh Rastogi told the media after the big catch.
The fugitive gangster has been slapped with over 25 major cases from more than 80 complaints of extortion, attempt to murder, kidnapping, and killings, among others.
"He used to call from international numbers and issue threatening extortion calls to various people. The Crime Branch was tracking him since many days," Rastogi said.
A breakthrough of sorts was achieved recently when the Mumbai Police nabbed Lakdawala's daughter, Shifa Shahid Shaikh, alias Sonia, in a fake passport case on December 28.
She had acquired a passport by submitting fake documents and was planning to flee to Nepal along with her one-year-old daughter, but was arrested from Chhatrapati Shivaji Maharaj International Airport.
Sonia's interrogation revealed the probable whereabouts of Lakdawala in Nepal and north India. After verifying the information, a Mumbai Police team rushed to nab him from the jurisdiction of Jakkanur Police Station in Patna (Bihar) late on Wednesday.
He was brought to Mumbai and produced before a magistrate at Esplanade Court and has been remanded to custody till January 21.
Originally, belonging to the 'D-Company' in the 1980s, around 1992 Lakdawala parted company with Dawood to align with his arch rival Chhota Rajan and worked with him for over 18 years.
Later, however, owing to some disputes over financial matters, Lakdawala broke off with Chhota Rajan and operated independently from 2001 onwards.
Apparently sensing an opportunity for sweet revenge, Dawood's close aide Chhota Shakeel had ordered a gangland hit on Lakdawala in Bangkok in 2002.
In that attack in a Bangkok market, he sustained seven bullet injuries, but survived, and shifted to Canada where he was arrested in 2004 on an Interpol notice.
Incidentally, the attack on Lakdawala came barely two years after his former boss, Chhota Rajan was also attacked in a hotel in Bangkok, but he too managed to escape and survive. After his extradition from Indonesia to India in November 2015, Rajan is presently in jail and facing trial in various cases.
Lakdawala also hatched a plot to kill Dawood in Karachi but the plan failed as Dawood did not turn up.
After the failed attempt on his life in Bangkok, Lakdawala went on the run and virtually became a globetrotter with operations in Canada (where he was arrested once), UK, US, Malaysia, Cambodia, Nepal and other countries.
He is reported to have amassed huge properties in Malaysia, London and Canada which the Mumbai Police will investigate separately.
( With inputs from IANS )