Sheikh was among those against whom the Interpol had issued red corner notices.
The Dubai Police on Saturday detained Anwar Babu Sheikh, the brother of missing mafiosi Chhota Shakeel, reports said.
Sheikh, who is wanted in Mumbai and Thane in connection with several offences including the March 1993 Mumbai serials blasts, was detained and questioned by the Dubai Police at Abu Dhabi International Airport.
Among other things, Sheikh is wanted for allegedly co-ordinating the Mumbai serial blasts from a location abroad.
Incidentally, Chhota Shakeel is considered the trusted right hand of fugitive don Dawood Ibrahim Kaskar.
After search and interrogation, the Dubai Police are understood to have recovered a Pakistani passport from Sheikh, raising questions on his extradition to India.
Both Indian and Pakistani embassies in the UAE are said to be in touch with the Dubai authorities seeking his deportation to their respective countries.
It may be recalled that after the Mumbai serial explosions, Sheikh was among those against whom the Interpol had issued red corner notices.
Mumbai and Thane police sources said that Sheikh is linked to Pakistan's ISI and was involved in several terror acts in India before he fled this country.
Earlier this year, Thane Anti Extortion Cell chief Pradeep Sharma had nabbed couple of persons for illegally keeping AK-56 Army assault rifles in their Mumbai suburban home in Goregaon.
Subsequent investigations by the Anti Terrorist Squad here revealed that the weapons may have been procured and used by Sheikh during the December 1993-January 1994 double-phased Mumbai riots.
Despite repeated attempts to seek an official reaction to the developments in Dubai, Mumbai and Thane police brass remained incommunicado on Saturday.
Also in view of Sheikh's Pakistani passport, there was no clarity whether he would be repatriated to India or not.