Mumbai, Oct 13 (IANS): Notorious gangster D.K. Rao, a former associate of mafia don Chhota Rajan Nikhalje, was nabbed in an extortion case for demanding Rs 50 lakh from a local builder.

Rao, whose real name is Dilip Mallesh Bora, was produced before a magistrate, who sent him to police custody till October 18, an official said here on Thursday.

The arrest of Rao - who was released from jail in May 2016 - follows a complaint lodged against him by a builder engaged in constructing a sprawling Slum Redevelopment Authority project with around 1,000 flats in central Mumbai.

Deputy Commissioner of Police Dilip Sawant said that the builder approached the Criminal Intelligence Operation Unit recently and then a case was registered by the Dharavi police.

The case was taken over by the Crime Branch which nabbed Rao late on Wednesday and produced him before a court which sent him to police custody.

Official sources revealed that the project in Antop Hill area was underway since 2013, but later it was suddenly stopped allegedly by Rao who demanded extortion money of Rs 50 lakh.

After his acquittal in an earlier extortion case and release from jail, Rao had summoned the builder this June and threatened him, telling him to leave the project and pay up the extortion money.

This is the first high-profile arrest in an extortion case after the nabbing of Iqbal Ibrahim Kaskar and four others in a similar extortion racket by Thane police last month.

Rao, against whom over 30 cases were registered but he was acquitted in almost all of them, was once a close confidante of Chhota Rajan and handled his affairs in Mumbai.