Special judge A L Pansare passed the order.
According to the police, Mohammed Ali (48) paid Rs 6 lakh to Rashid Batla (who died during the trial) to kill Chand Madar alias Chandbhai. Ali wanted to take over Chandbhai's business of oil theft and smuggling on the high seas, police said.
Batla engaged Shahid Zeenat and Mohammed Shagir, who, on September 15, 2010, shot Chandbhai in south Mumbai. He died the next day.
The crime branch of Mumbai police had said that Ali hatched the conspiracy with the help of fugitive gangster Chhota Shakeel.
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The prosecution relied on the confessions of two of the accused but the defence argued that there was no evidence linking all the circumstances or linking Ali to Shakeel.
Advocate Taraq Sayyed, Ali's lawyer, argued that the prosecution failed to prove the motive or the rivalry angle.
Ali told reporters outside the court that he had been framed up and it was "a political conspiracy".