Khan played a "pivotal role" in Delhi serial blasts of September, 2008.
A native of Uttar Pradesh's Azamgarh, Khan carried a bounty of '15 lakh on his head by the police. He was injured fatally in the shootout, but his team was able to kill two alleged terrorists - Atif Amin and Mohammad Sajid.
Kushwaha added that Khan was an expert bomb maker, conspirator and executioner.
Khan, who was linked to serial blasts in UP, Gujarat, Delhi and had escaped during the Batla House encounter, was on the run for a decade. Khan was present at Batla House, along with four others, and had managed to give police the slip during the encounter on September 19, 2008 in Delhi's Jamia Nagar, in which two Indian Mujahideen terrorists were killed and as many arrested. "He was also wanted in 2007 UP blasts, 2008 Jaipur serial blasts, 2008 Ahmedabad blasts and had escaped from Batla House encounter", Pramod Singh Kushwaha, DCP, Special Cell Delhi Police, told reporters.
The Delhi Police will release further details of today's arrest at a press conference in the afternoon.
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Some of Khan's accomplices had links with the Islamic State - the radical Islamist group, the police said.
He had got the citizenship of Nepal through fake papers, he said.
A month later they separated and Khan crossed over to Nepal.
Initially, he and his elder brother Shariq Khan stayed with their uncle Dr Fakhre Alam and started studying at the Shibly National Nursery School from where he shifted to another school, the officer said. He had studied B Tech at an institute in Muzaffarnagar but had failed in the second year, said the officer. "For a cover, he worked as a labourer and also met with many sympathizers there", Kushwah said. Through his established contacts, he procured logistics for his visits to India.